Op-ed by Bob Shead
In this second part of a two-part article on the Philippine Gaming Industry, I will focus on the country’s online gaming industry. Together with the casino sector, which was the focus of the first part of this article, the online gaming industry is of enormous importance to the country’s economy. In this article, I will also identify possible investment opportunities in this rather complicated and sensitive industry.
Background
These are casinos and highly exclusive slot machine VIP clubs located in major cities across the country. Philippine Amusement and Gaming Corporation (PAGCOR) operates most of casinos and slot machine clubs in the Philippines Luzon Central Luzon. Golden Nile Bar & Casino in Angeles City; Wild Orchid Resort & Poker Room in Angeles City. Basically, all locals are allowed to play at any approved PAGCOR casinos, as well as online, but only for some limited types of gambling. All Filipinos are free to visit any of the many PAGCOR betting locations in the country and can also freely gamble online at most offshore platforms.
The Philippines is an interesting and relatively new market for online gambling. There are two distinct regions in the country, for gambling purposes. The Philippine Amusement and Gaming Corporation (PAGCOR) control the majority of the Philippines where gambling is controlled by the Government owned PAGCOR. As previously mentioned in the casinos sector, PAGCOR operates their land-based casinos, and betting outlets across the country.
The second region is the Cagayan Economic Zone Authority (CEZA) and Freeport which most people just call “Cagayan Freeport.” This is based mainly at the Manila Entertainment Complex, mentioned earlier and located next to Manila Bay. This is the only area in the Philippines not under complete control of PAGCOR. In the Freeport area, there are numerous independent casinos that focus mainly on foreign tourists.
Cagayan Freeport also acts as an online gambling licensing jurisdiction, and is the only such jurisdiction in Asia. A Filipino gambling license is difficult to obtain, and does not allow operators to accept wagers from Philippine citizens. However a license from CSEZ there allows access to the greater Asian market, a rapidly expanding market, with a focus on China.
PAGCOR have said that they are currently reviewing the applications for Philippine Offshore Gaming Operator (POGO) of 44 companies that have applied for new licenses in the Philippines. This is in addition to the 45 applications already approved by PAGCOR.
In March PAGCOR announced that the issuance of additional POGO licenses, if approved, will encourage PAGCOR to reach its Peso 60 billion (US$1.17 billion) – Peso 65 billion (US$1.27 billion) revenue target for 2017. PAGCOR has also acknowledged that before fully opening the market for online gaming, the PAGCOR audit system that helps track and monitor the operations of gaming operators needs to be rapidly and extensively updated with the procurement and installation of the correct audit equipment and technology. PAGCOR has acknowledged that there is some confusion with its audit facilities, mainly between the differences in operations between CEZA and PAGCOR as to who handles the monitoring. This is currently being resolved, according to PAGCOR.
It has been reported previously that PAGCOR have already collected over Peso 1 billion (US$19.63 million) from its licensing and processing fees, as revenue from 35 offshore gaming licenses issued in 2016. These charges for each license application amount to US$50,000 for application and processing of e-casino operators, and US$40,000 for separate sports betting, charged by PAGCOR. When a license is approved, an additional fee of US$200,000 for e-casino and US$150,000 for sports betting is charged. It is estimated that by 2018 revenues will increase to Peso 3 billion (US$58.9 million) with the issuance of the additional licenses.
According to gaming analysts, there is an optimism in the growth of the Philippine gaming sector in the future, on the back of its improving domestic economy, which contributes to the growth of the Gross Gaming Revenues (GGR) of the sector. The Philippines is a primary market for on line gaming due to the increasing inflow of investment and gaming funds into the economy. Observers have also said that the growth in inbound Chinese funds is rapidly increasing, though the online gaming industry, and that it will lead to the increase of the volume of the GGR. PAGCOR’s financial data states that revenues increased by 18% from the third quarter of 2015 figure of Peso 98.6 billion (US$1.93 billion) to the third quarter of 2016 when revenues were Peso 118 billion (US$2.31 billion).
Legal Aspects of the Philippines Online Gaming Industry
The laws for online gaming in the Philippines do need to be examined. In both gaming regions of the Philippines (PAGCOR and CEZA), it is illegal for an independent gaming operator to offer online betting to Philippine nationals. However, offshore gaming providers, with no connection to the Philippines may offer online gaming services to Philippine nationals.
Briefly, there are two different sets of legislation operating in the Philippines. Philippine Nationals are not subject to any laws that ban online gambling. However, there has been much Congressional and Senatorial debate on the legality of placing bets through the internet. A Philippine Supreme Court ruling in 2012 found that there was no part of Philippine law that made it an offense to place gaming bets. Therefore Philippine nationals can theoretically use the online gaming facilities.
However, online gaming operators must comply by different legislation. All online gaming sites with a license to operate in the Philippines cannot offer its services to Philippine nationals. PAGCOR issues the licenses and monitors all existing licensees for compliance. Any registered company can obtain a license, providing it pays the due fees mentioned above. License holders can therefore offer their services to anyone outside the Philippines. The advantage to the Philippines, is the close proximity of the rest of Asia and its improving level of development, that make it an attractive base of operations for potential investors with an interest in accessing the Asian online gaming market.
All gaming systems must be examined and approved by PAGCOR, and the gaming company must hold an adequate amount of funds in cash, to cover all player balances. The PAGCOR Licensing Commission has a strong reputation for strictness in enforcing these regulations.
The gaming industry introduced by the Philippine Government does have currently conflicting legislation, and obviously professional legal advice is essential to enter a very promising investment sector. However, maneuvering around the legal challenges is proving to be complicated for both investors and Philippine Government regulators. The terms online gaming or offshore gaming are interchangeable, and refer to internet based gaming activity, that involves clients who register and establish accounts with the gaming operator.
Under PAGCOR regulations, only foreign nationals based in a different country, and over 21 years of age are permitted to take part in online gaming, that is based in the Philippines. PAGCOR also states that Philippine Nationals here or abroad, or foreign nationals legally based in the Philippines are legally not permitted to access Philippine based online gaming operators. Gaming operators may be either Philippine based companies, or foreign companies based outside of the Philippines. It is presumed that the latter means gaming companies who can offer gaming services in the Philippines, or foreign operators who set up part of their operations here. It is acknowledged that this legislation can be considered ambiguous, which currently adds to the confusion, although work is ongoing to resolve this legal confusion.
Real Estate Observations of the Philippine Online Gaming Industry
The online gaming business currently can easily fit into the existing office real estate landscape in the Philippines, since it essentially only requires the same space and infrastructure requirements as the Business Processing Outsourcing (BPO) industry, which attracts investors, who do not have to fund capital for large construction projects. It also gives the Philippines an alternative avenue to employ its growing English speaking BPO workforce in the face of competition from other countries, i.e. India and China, and is a reliable source of tax revenue.
The Philippine real estate community has recognised that the Philippine online gaming industry is now a “new kid on the block” in terms of office occupation, and is expected to challenge the current leading office user, the BPO operations, in the near future. Currently both of these sectors drive the demand for office space nationwide, which in 2017 is anticipated to be between 1.2m sqm and 1.5m sqm. Of this, it is estimated that the online gaming industry could occupy about 400,000 sqm to 500,000 sqm of office space. The rapid increase of office space required by the online gaming industry has increased from zero in recent years to currently nearly 50% of the BPO office sector. The real estate industry in the Philippines now anticipate that by 2018, the on line gaming sector could equal that of the BPO sector in terms of required office space. For example, and in the last six months, this sector occupied 84,000 sqm of the available office space in Metro Manila. The figure will rise following the current license applications under consideration by PAGCOR.
Additionally, it has been accepted by the real estate industry that these gaming companies can sub-franchise to as much as eight other sub-franchisees, and therefore it is estimated that, as a result, each gaming company has the potential to lease between 10,000 and 20,000 sqm of extra office space in the near future.
Additionally, there is a trickle-down effect. The online gaming industry is contributing to the increased rental of up market residential units in key areas of Metro Manila. This is due to the increasing foreign management of the gaming companies, who require extra accommodation. This has led to an increase in the number of restaurants, bars and social meeting places. This is also affecting the regional office space available in regional BPO focused areas such as Cebu, Dumaguette, and other parts of Luzon and the Visayas.
Currently, there are 1.1 million people employed in the BPO outsourcing sector, and this is anticipated to grow to 1.8 million people by 2020. It is also anticipated that 70% of this growth will be in Metro Manila, with the remaining 30% growth in other parts of the Philippines. This amount of growth in office space translates into a requirement of an additional 3 million sqm of office space throughout the Philippines. This is the estimated demand of the BPO sector, and does not include the relatively new gaming industry sector.
According to the real estate industry, the current office space supply is 10.3 million sqm, of which Metro Manila accounts for 8.8 million sqm or 85%, and the existing office space outside of Metro Manila amounts to 1.5 million sqm or 15%. The current estimated plans for increased office space expected to become available by 2023, is a total of 5.4 million sqm, of which 4 million sqm or 74% will be in Metro Manila, and the balance will be in other cities in the Philippines.
The other related aspect is the increasing growth of the younger population (now in their 20s) and English speaking in the Philippines. Gaming companies have taken notice of this, when looking for a location and access to potential employees.
As a result, the increasingly robust online gambling industry, despite the legal issues, are now impacting on the Philippine real estate sector. It has been recently reported that the online gaming sector is now the second largest demand driver for office space in the Philippines, closely following the BPO sector.
Some Problematic Issues with the Philippine Online Gaming Industry
Apart from the confusing and duplicate legislation that is currently under review, and was mentioned earlier, another issue to contend with is that there are a number of different types of business within the online gaming sector that fall under different jurisdictions, depending on what they do. This has led to some differences between PAGCOR and other government agencies, in particular the Philippine Economic Zone Authority (PEZA). Also important is that the Philippines has a demonstrated vulnerability to cybercrime. Online gaming is a tempting target, and the Philippines’ digital security framework is being encouraged to improve IT security and access in both physical and regulatory terms.
It has been acknowledged that PEZA has some objections to the online gaming sector, and has said that it may consider to withdraw the accreditation of any PEZA licensed building that houses an online gaming related businesses. This is due to PEZA’s observation that it may be difficult to enforce the regulations that apply to gaming companies, due to the fact that the industry has many related business interests such as software providers, BPO providers, data and content streaming providers, system support providers, and providers of marketing and customer relations services, all of whom may provide services to clients outside the gaming industry. The concerned government agencies are attempting to fix the problem for monitoring and management of a business sector, for which they have no reliable current data. This reflects the current issues surrounding the PAGCOR audit system mentioned earlier. When PAGCOR has acquired and deployed its updated audit system, then this problem is expected to be resolved.
Pagcor List of Approved Philippine Offshore Gaming Operators (POGO) as of August 16, 2017
- Oriental Game Ltd.
- Far Eastern Capital Ltd.
- Marco Polo Enterprises Ltd.
- Imperial Choice Ltd.
- Libo Consolidated Ltd.
- Fortuneport Enterprises Ltd.
- SC World Development Group Ltd.
- Golden Dragon Empire Ltd.
- VIP Global Solutions Ltd.
- MG Universal Link Ltd.
- AG Interpacific Resources Ltd.
- BBIN International Ltd.
- Eastern Hawaii Leisure Company Ltd.
- PT Transpacific Company Ltd.
- OG Global Access Ltd.
- Dynamic System Ltd.
- Leading Reward Ltd.
- Kingwell International Group Ltd.
- Defun Global Investment Ltd.
- Inner Strong Ltd.
- Four Leaf Technology Inc.
- Smarc Group International Ltd.
- Ximax Holding Ltd.
- Puerto Galera Holdings Ltd.
- New Wave Infotech Ltd.
- Xionwei Technology Co. Ltd. Inc.
- NewLink Pacific Ltd.
- Pride Fortune Ltd.
- OLE Group International Ltd.
- Prestige IOM Ltd.
- Wilshire Worldwide Company Ltd.
- Wanfang Technology Management Ltd.
- Giant Gains Solutions Inc.
- Full Strength Trasing Ltd.
- Swanston Asia Inc.
- Don Tencess Asian Services Solution Inc.
- Vertex Digital Entertainment Technologies Inc.
- Hyper Sports Media Ltd.
- Winherld Entertainment World Ltd.
- Blue Frog Contents & Support Inc.
- Jolie Investments Ltd.
- Sohu Expert Int’l Management Solutions Inc.
- Micro Info Systems Ltd.
- King Rich International Group Ltd.
- Most Success International Group Ltd.
Conclusion
In brief and in conclusion, the online gaming industry in the Philippines is the ‘new kid on the block’ at the risk of repeating myself! However, the speed and investment is remarkable. The Philippines remains an ideal venue for this hugely profit making sector, and its location in both ASEAN and Asia, is very important when the gaming population in this region is immense. The real estate forecasts are important and very valid, as to their estimates of the potential expansion of this highly profitable sector. There are of course, and as I have mentioned many issues to contend with, as is always the case with a new industry that arises. However, many existing investors have accepted this and the existing industry appears to be content and awaiting the improvements and clarifications.
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An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.
In this issue of ASEAN Briefing magazine, we provide an introduction to the Philippines as well as analyze the various market entry options available for investors interested in expanding to the island nation. We also discuss the step-by-step process for setting up a business entity in the Philippines, highlighting the various statutory requirements for overseas investors. Finally, we explore the potential for Singapore to serve as a viable base to administer investors’ Philippine operations.
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Residents of the Philippines can enjoy legal online casinos if they are licensed and regulated by a legitimate offshore jurisdiction. Licensed offshore online casinos can provide Filipinos with numerous legal gaming options not otherwise permitted to them domestically such as poker, sports betting, bingo, keno, scratch cards, slots, and much more.
This guide will detail everything residential Philippine players should know about gambling online at licensed and credible casino destinations from banking methods to region laws and more.
Visitors to the Philippines are not restricted from access to domestic casinos as these have built the country as a successful and thriving gambling destination for international players to experience. Casino resorts populate the islands; however, land-based casinos in certain regions have the authority to restrict various forms of gaming from their selection. Therefore, to experience the full variety of games available we recommend using licensed Philippines legal online casinos.
Online casinos recommended here are thoroughly evaluated and each have casino reviews available on this site.
Are Online Casinos Legal In The Philippines?
Filipino players can legally participate in online casino entertainment as long as the destination at which they are playing is located and regulated outside of the Philippines. The Filipino gambling laws do not prohibit players from participating in legally licensed and regulated offshore Internet gambling.
This fact was further supported by a 2012 court ruling that found that there are no provisions in the Presidential Decree or any other gambling law in the Philippines that makes it illegal for residents to place bets online. The locally run, government licensed online casinos in the Philippines are prohibited from offering their services to Filipino citizens, requiring players to turn to offshore sites.
The gambling laws in the Philippines are directed towards the business operators and not the players. You can gain more understanding about the difference between domestic and offshore online gambling in our guide to Philippines legal casino gambling by region.
Betonline Sportsbook And Casino
If you are looking for a trusted site to gamble at, look no further than Betonline. They are one of the biggest and most reputable gambling establishments on the internet and gladly welcome all players from the Philippines. Betonline offers casino games, poker, sports betting and even a live dealer casino. Plus they are mobile friendly which is always nice.
Betonline has been around for over a decade and has earned a superb reputation for being fair and honest with players and always paying winners in a timely manner. They are a great option for all Asian players. New Philippine players can claim a 100% bonus up to $3,000 over your first 3 deposits.
Best Legal Online Casinos For Philippine Players
| Site Name | Bonus Offer | Accepts Filipinos? | Visit Site |
|---|---|---|---|
| 100% Max $3,000 | Review | ||
| 100% Max $100 | Review | ||
| 150% Max $750 | Review | ||
| 100% Max $1,000 | Review |
What Determines Whether Or Not An Online Casino Is Legal For Players In The Philippines?
The formal credentials and the destination of an online casino determine whether or not it is legal for Filipino residents to gamble there. Gambling laws in the Philippines have deemed it illegal for state licensed online casinos to offer their services to citizens of the islands. However, there are no laws dictating where players can bet, hence it is perfectly legal for Filipino gamblers to enjoy offshore gambling online as long as the destination is legally licensed and regulated through a legitimate governing jurisdiction.
What is ironic is that the Philippines is home to the only online gambling licensing jurisdiction in Asia, yet Filipino players cannot engage in betting services offered from the businesses which are regulated by the First Cagayan Leisure and Resort Corp (FCLRC) in the Cagayan Valley.
All other online gambling businesses located in the Philippines are licensed and regulated by the Philippine Amusement and Gaming Corporation (PAGCOR). These destinations are also off limits to Filipino players. The only gambling sites that are legally accessible are licensed and regulated offshore casinos that accept players from the Philippines.
How Do I Find A Legal Online Casino Accepting Players In The Philippines?
Your best bet is to rely on the information provided by industry professionals who are involved in the evaluation and ranking of online gambling sites. They are trained to analyze online casino businesses and determine their legitimacy, quality and value to players.
Our team of online gambling analysts has placed each brand through an intense review process to reveal the premium casino destinations and expose the questionable and undesirable options. Each of our recommendations has been tested and approved by our pros, and is guaranteed to be legally licensed and regulated as well as extremely high quality.
What Types of Legal Online Casino Games Can Filipino Residents Play?
Slots
Legal Online Slots in the Philippines - This page will provide you with insight into what types of legal online slots games are available to Filipino players, as well as where to find premium online slot machines from licensed, premium online slots casinos.
Blackjack
Legal Online Blackjack in the Philippines - Legal Online Blackjack for Filipino Players – One of the most popular online and offline casino games, legal blackjack games are readily available online for Filipino players. Get the who, why and where from our this informational guide.
Roulette
Legal Online Roulette in the Philippines - Another very popular gaming venue in the Philippines and around the world, legal online roulette games provide convenient online access to a variety of roulette games, including American roulette, European roulette, and even French roulette. This guide will provide you with information about playing roulette online in the Philippines.
Baccarat
Legal Online Baccarat in the Philippines - This guide will reveal the best destinations for Filipino residents to enjoy legal online baccarat, as well as some helpful tips on learning to play for free.
Pagcor List Of Online Casino Games
Pai Gow
Legal Online Pai Gow in the Philippines - Pai Gow is one of the most popular casino games among Filipino residents. It is not wonder since it is an Asian inspired game. There are versions of this game available at some of the online casinos that legally accept players from the Philippines. You can learn the ins and outs of playing Pai Gow online legally from this guide.
Mahjong
Legal Online Mahjong In The Philippines - Mahjong is one of the oldest traditional table games available to play at online casinos. In recent years, the tile-based game has grown in popularity around the world and is now a go-to game for many players looking to wager on their strategy and skill.
Keno
Legal Online Keno in the Phillippines - Keno is a beloved numbers game that derived in China and has become popular around the world. The popular game is often described as a casino's lottery. Our guide to playing keno in the Phillippines will give you useful information involving the game and have you ready to try your luck.
Live Dealer Casino Games
Live Dealer Casinos in the Philippines - Live Dealer gambling online has become the latest craze in the Internet gambling industry, and the Philippines are no exception to this trend. Learn what live dealer games are and how to access them in this guide.
Pagcor List Of Online Casinos
Mobile Casino Games
You will find that there are numerous Philippines mobile casinos available, all of which are compatible across most mobile devices and networks. These mobile casino applications are web based, mobile optimized apps that allow players to access their favorite casino games, fund their account and manage their preferences all from a smartphone or tablet.
Other Forms Of Legal Online Gambling For Filipino Gamblers
There are several other options for Filipino residents seeking licensed and regulated online gambling entertainment. Players can legitimately gamble at without violating any of the nation's gambling laws.
Sports Betting
Legal Online Sports Betting In The Philippines - A complete guide for betting on sports like Basketball, Baseball, Boxing, Football and Soccer legally for Filipino players. This section of our site also includes information specifically for those Filipino residents interested in learning more about legally sanctioned online sportsbooks offering Super Bowl 52 betting lines for Philippines residents.
Poker
Legal Online Poker in the Philippines - For anyone looking to play poker, we review the leading legally licensed sites here.
e-Sports
Electronic sports (e-Sports) is one of the newest things to produce betting odds. While e-sport betting has been around for a while it is just now starting to gain mass popularity on the betting circuit. Our guide to e-Sports betting will fill you in on all the details you need to know before placing a bet on video gamers.
Horse Race Betting
Horse race betting has been a long-standing tradition for many Filipinos. Our legal horse betting guide will cover all aspects of the sport and offer key pointers on how to benefit from online sportsbooks.
In the Philippines, players can gamble as long as they are 18 years of age.
The online gambling deposit methods available to Filipino gamblers include a variety of virtual banking options to accommodate multiple player preferences. You will find the following types of funding methods available: credit cards, debit cards, prepaid options, cryptocurrencies (such as Bitcoin, Ethereum, Dash, Litecoin), eWallets, and more. Visit our page deposit guide for Philippines players for more information.
You might find a few sites that offer gambling in Philippines Pesos. But most of them offer either USD, British Pounds or Euros. You can view current USD to Philippines Pesos conversion rates here.
Yea, I know a lot of them look too good to be true. I can assure you that these are in fact legitimate bonus offers and are simply a way for online casinos to attract new customers. We are gamblers too, so we only recommend the most reputable websites that we know can be trusted and will always pay on time.