Filipino Legislators have revived a two-year-old bill in parliament aimed at introducing a slew of reforms in the nation’s gambling sector. For the most part, the measure seeks to change how the gambling regulator serves the gambling scene and also does away with internet gambling.
Drums of reforms are echoing across the gaming industry of Asian powerhouse Philippines. Filipino lawmakers are proposing an overhaul of the country’s gaming industry, which may lead to fundamental shifts in how the activity is regulated. The lawmakers are calling for the government to cease its interests in operating slot machines, table games, and iGaming platforms. Jonathan Keith Flores, the 2nd District Representative of Bukidnon, is spearheading these new proposals.
The proposal seeks to create the Philippine Amusement and Gaming Commission (PAGCOM), which will be tasked with regulating the country’s online gambling industry. Mr. Flores is a senior member of the country’s House of Representatives and chairs the chamber’s Committee on Government Reorganization.
Should the Flores-backed proposal sail through, House Bill 3559 will be enacted, following its original introduction in August 2022 by then-Rep. Ralph Recto, who is now the country’s Secretary of Finance. This bill has been gathering dust in the Manila institution for two years and could see PAGCOM replace the Philippine Amusement and Gaming Corporation (PAGCOR). PAGCOR currently regulates and operates commercial casinos in the country.?
In a news release following the announcement to revive HB 3559, Flores said:
“I have chosen to adopt House Bill 3559 because, among others, it will abolish the Philippine Amusement and Gaming Corporation, transfer its regulatory powers to the Philippine Amusement and Gaming Commission, and privatize all existing PAGCOR operations and casinos, including all kinds of PAGCOR online gaming.”
The main motive of the Flores initiative is to eliminate the apparent conflict of interest that exists for PAGCOR. Under the current regulation, it seems that the body exists both as a regulator and a gaming operator, which pertinent voices in the industry have continuously questioned. PAGCOR currently has regulatory authority over all the commercial casino resorts in Manila and the capital’s Entertainment City. It also regulates casino venues located in the country’s Freeport zones. PAGCOR also runs nine casino branches nationwide and 33 Filipino casino satellite locations.
The calls to sell off PAGCOR assets have been going on for quite some time now. In fact, these calls became so intense during the reign of former president Rodrigo Duterte, whose government had once decided to sell off PAGCOR assets. That said, the president eventually vetoed that decision, seeing that the assets were simply too valuable to dispose of.
However, since President Ferdinand Marcos Jr assumed office in 2022, the government initiated the sale of some of the PAGCOR satellites and divested some of its casinos. Nonetheless, the most valuable and profitable PAGCOR casino branches around Manila, Davao, Cebu City, and other major cities remain solely under PAGCOR ownership.
As we speak, the Philippine government has already drafted a timetable for the sale of PAGCOR assets and committed to the disposal of all its holdings before the end of the first quarter of 2026.
In preparation for the impending sale, the institution’s Chief Executive Officer Alejandro Tengco said last year that the PAGCOR would be upgrading the information technology systems of all the casinos in which it still operates. The move is being implemented so that the government may receive a premium price for these properties.
Tengco, speaking at last year’s G2E Asia Expo, said:
“Privatization is at the forefront of our master plan with PAGCOR shifting its energy towards a purely regulatory role. Once these upgrades and renovations are complete, we expect our casinos to attract more players and guests, thus making our casinos more attractive to potential investors once we start offering them for sale…These projects and development are geared towards our ultimate goal of decoupling PAGCOR’s role. Once we have a pure regulatory entity, you can expect a more dynamic and more lucrative Philippine gaming industry with a more level playing field that promotes fair competition and growth.”
Flores’ plan also entails the introduction of a substitute bill that will effectively eliminate all the pending Philippine Offshore Gaming Operations (POGOs). These are entities that have never been granted licenses by the PAGCOR. But first, the Government Reorganization and Games and Amusement Committees will have to deliberate and come up with the said substitute bill. The bill provides for a 5% gross revenue tax, which will be levied on all casino operators in the country.
Additionally, PAGCOM will be permitted to collect an extra 25% of the aggregate gross earnings. The collection from the tax mentioned above will be channeled towards the priority projects of the local government unit hosting the gaming facility. The revenue will also be used for the establishment and running of rehabilitation centers that will deal with any addictions related to gambling, as well as other social service programs prioritized by the national government.
Flores is also looking to eliminate online and mobile gambling within state lines. According to the legislator, gambling over the internet in the Philippines has significantly contributed to the rise of cybercrime, scams, identity theft, and online theft.
Meanwhile, as mainland China authorities continue to institute stricter gambling laws on Macau, a gambling haven that borders the Philippines, the dynamics are changing fast. So, as the mainland China government continues to impose increased scrutiny on junket operators in Macau, the Philippines, on the other hand, is thriving.
?For example, in March this year, French hotelier Accor Group committed to build a state-of-the-art $300 million resort in the Philippines. The casino resort is set to be located at the Subic Bay, a resident hotspot for Metro Manilla residents. Overall, the privatization of PAGCOR is expected to generate significant government revenue and attract new casino industry investors.
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