Philippines POGO Market Puts the Country on China’s Tourism Blacklist

Posted on: October 11, 2022, 07:14h. 

Last updated on: October 11, 2022, 04:43h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

For years, the Philippines resisted calls from China to make changes to its gambling industry, especially Philippine Offshore Gaming Operators (POGO). It finally gave in, but the Chinese regime has decided that the Philippines deserves to be on its tourism blacklist over its inaction.

POGO office raid
Philippines police raid a POGO office using illegal Chinese workers in 2019. The POGO segment still causes grief, with China now blacklisting the Philippines for tourism. (Image: CNN Philippines)

China was upset because POGOs were heavily targeting its in-country citizens. It has a strong disdain for all things gambling and has used its position to coerce a number of countries.

It didn’t work with the Philippines. Even though the POGO segment is now undergoing a massive transformation, China blacklisted the Philippines. The good news is that the country might not feel anything more than a small pinch as a result.

POGO Market Continues to Dwindle

The Philippines was earning a lot of revenue from the online gaming operators – too much to ignore. However, when the segment broke down over government changes, including new taxes, everything turned upside down.

A number of operators left, and those that remained weren’t always playing by the rules. In addition, illegal operators have hired a lot of Chinese nationals, adding to China’s ire.

The Philippines is now working diligently to eliminate the unlicensed operators – PAGCOR (the Philippine Amusement and Gaming Corporation) has made it clear that they are not part of the POGO ecosystem. As many as 175 companies have closed up shop, leaving about 34 regulated entities.

The country is also deporting as many as 40,000 Chinese nationals that were working in the segment. After the operators left or shut down, they left many of the employees behind with no recourses. The individuals had to survive, and many found themselves in human trafficking and slave-labor situations with no escape.

The actions come too late to make China happy. Filipino media outlet ABS-CBN reported today that it doesn’t want its people traveling to the Philippines anymore, at least for now.

Philippine Senate President Juan Miguel Zubiri received the news from Huang Xilian, China’s ambassador to the Philippines. It’s just another way for China to try to exert its position on another regional government.

The appearance on the blacklist is only political and may not have much of an impact on the Philippines’ tourism industry. ABS-CBN cited PAGCOR data that showed the Chinese tourism segment delivered about 22,236 arrivals to the country between February and September. That accounts for just 1.37% of the Philippines’ entire tourism industry.

POGO Market Under The Microscope

Because of the scandals involving the POGO market, the Philippines government now wants to take a closer look. It recently announced that it is going to investigate all remaining operators as it explores a possible permanent ban on the segment.

The fallout, building on allegations of torture, abductions, slavery, and more, has been widespread. There is a new attempt to ban all forms of online gambling in the country, not just POGOs.

That debate will continue for some time. Certain lawmakers support a complete prohibition, while others want it to center only on POGOs. There are still more who don’t want anything more than stronger control.

In 2020, the POGO segment was worth around PHP7.2 billion (US$122.11 million). When the government tried to implement a new tax, many left, and the regulated sector then became worth just PHP3.9 billion (US$66.14 million).

That’s a lot of money to give up, and doesn’t include other economic benefits, such as employment, real estate leasing, and more. That could account for around PHP200 billion (US$3.39 billion) a year, according to a local real estate consultant.