Philippines President Rodrigo Duterte Says Online Gambling Will Continue, Leader Won’t Cave to China

Posted on: September 5, 2019, 11:22h. 

Last updated on: September 5, 2019, 11:56h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Rodrigo Duterte, the controversial president of the Philippines, isn’t buckling to China’s demand that online gambling operations in the Southeast Asia country targeting foreign markets be shuttered.

Philippines Rodrigo Duterte POGO
No deal: Philippines President Rodrigo Duterte (left) isn’t abiding by Chinese President Xi Jinping’s request to end online gambling. (Image: Malacañang Palace)

Philippine offshore gaming operators – commonly known as POGOs – have been scorned by China President Xi Jinping on claims that the internet gambling networks are unlawfully targeting his people. The Chinese Embassy in the Philippines issued a sternly worded decree to the Filipino government in August advising that unlawful online gambling be punished.

Duterte and Xi met last week and discussed the issue, but the Philippines leader isn’t backing down.

I decided we need it to benefit the interest of my country. Many will lose livelihood (sic),” Duterte said of his decision.

However, he warned POGO operators that if they fail to pay the appropriate fees and taxes, “you will be shuttered.” The president added, “Even if you’re a gambling lord, I don’t care who you are.”

POGO Scandal

According to the Philippines government, the 60 licensed online gaming companies employ some 350,000 people, which includes an estimated 130,000 Chinese nationals. The majority of POGO operations take place in freeport zones such as the Clark Freeport Zone – a leisure and entertainment hub.

Chinese leaders say they are concerned that its citizens are being lured to work in the POGO companies only to be forced into near slave-like conditions. The People’s Republic also claims the Philippine interactive gaming networks target its people.

Aside from Macau — the autonomous Special Administrative Region enclave where casinos are widespread — gambling in China is largely prohibited, with the exception of state-run lotteries.

Xi told Duterte he appreciated the Philippines’ decision to halt new POGO licenses through at least the end of the year, but would like all internet betting sites targeting offshore markets to be shut down.

“They [China] cannot dictate us,” Philippines Ambassador to China Jose Santiago Sta. Romana declared. “Those are sovereign decisions. That is where we stand.”

It’s worth noting that while POGO licenses are said to have been suspended, the list of approved operators expanded by two companies over the last two weeks.

Online Gaming Revenue

The Philippines gaming industry is governed by the Philippine Amusement and Gaming Corporation (PAGCOR). According to the agency’s latest financial data, POGO operations reported gross gaming revenue (GGR) of $301 million in the first six months of 2019.

PAGCOR has received $141 million in associated licensing fees and taxes from the POGO companies. Additionally, the Philippines Bureau of Internal Revenue says the online gaming industry has delivered $3.8 million in individual taxes from foreigners working in internet casino operations.

However, the Department of Finance believes around 100,000 of the foreign workers employed by POGOs aren’t paying the appropriate taxes.

One concern on the Filipino side of the POGO struggle with China is that the Chinese government mandates its companies working in foreign countries to assist in intel collection. “It is not far-fetched that individuals, likewise, could be compelled to do so,” Philippines Defense Secretary Delfin Lorenzana said recently.