BREAKING

Wednesday, January 8, 2020

Philippine Online Gaming Boom To End In 2020



Wazzup Pilipinas!

If you've been involved in the online gaming world in the Philippines for the past two or three years, chances are you've made a lot of money and had a great time. The online casino industry has been expanding faster within our home region than almost anywhere else in the world, but when an industry grows rapidly, regulation is never far behind. As we start 2020, the message from the Government and President couldn't be any more explicit - the casino industry is welcome, but it has to pay its fair share.

Online casinos have been springing up everywhere in the world that casino gambling is allowed ever since the dawn of the internet. The prolific number of online slots websites currently operating in and around the Philippines is comparable to the range of similar sites available in gambling hotspots like Europe, Las Vegas, and India. With hundreds of online slots available at the best websites such as Dove Casino, gamers have a better range of games available at home than they would encounter if they visited their local town or city center casino. That's excellent news for players, and should be good news for the Government too - with so much money being spent on playing online slots, there should be a significant tax windfall. The problem with the whole scenario - from the Government's point of view at least - is that the windfall has failed to appear. President Rodrigo Duterte has now drawn a line in the sand and warned that the state is prepared to tolerate the situation no longer.

As of the end of December 2019, if the President’s words are to be taken literally, companies that operate online slots or other online gambling websites within the Philippines had only three options to take before the end of the month - they could either pay what they’ve been deemed to owe, get ‘slapped’ with regulatory action, or ‘get shot like birds.’ Duterte has always been known for his colorful phrasing and dramatic choice of language, and so there generally isn’t a fear that the opening weeks of 2020 will see online slots website operators lined up and shot in the streets, but there can be little doubt that he is serious about recouping Philippine money that he believes is unlawfully being funneled abroad.

No figures have been released that might indicate precisely how much money Duterte believes is being illegally withheld from the public purse, but a raid on the Great Empire Gaming and Amusement Corporation may provide a clue. The raid, which happened in September, resulted in $25m in backdated taxes being paid after the company's license to operate within the Philippines was withdrawn pending payment of the sum. If the situation with that company proves to be typical of the sector at large - a sector which has grown quickly and mostly free of scrutiny up until this point - there could be hundreds of millions of dollars on the table. Sums of that size would make enormous differences to potential public service provisions, and so targeting the sector is likely to prove to be a popular policy among the President's supporters.

Unfortunately for the online slots and online gambling industry, the bad news for 2020 doesn’t stop there. Makati City, which has been the epicenter of the emergent industry, has announced that it is to temporarily stop issuing licenses to online slots and online gambling websites, without exception. The suspension is indefinite, and could even prove to be permanent. While on the surface the move may seem illogical because of the amount of money the industry has brought into Makati City, there's a local fear that the rise of businesses of this kind has contributed to an unsustainable real estate bubble which is already approaching the point of collapse. The mayor of Makati, Abby Binay, also feels that the presence of so many gambling companies within the city is contributing to a number of social problems including prostitution.

Until December 2019, Makati City's local Government had met every planning or licensing application for online gaming companies within the region with letters of 'no objection.' As of the start of 2020, that will no longer be the case, and any new online gaming company wanting to gain a license to operate within the region will have to make their case in court. As going to court on the issue is likely to be an expensive exercise with little prospect of success, it's more likely that companies will now back away from Makati City and seek somewhere else to establish their operations. Companies that already have licensed to operate within Makati are not believed to be under threat, although they may encounter difficulties when their existing licenses fall due for renewal.

At the time of writing, the effective ban within Makati City isn't likely to have much impact on a national level. Quezon City, Mandaluyong, Pasay, Las Pinas, Paranaque, and Muntinlupa all currently issue letters of no objection as standard policy at present and aren't believed to be considering a change of procedure in that respect. If any of them were to follow the example of Makati, though, it would put pressure on the remaining cities to consider their stance on the issue.

Given the multi-billion-dollar value of the global online casino industry, the Philippines should be careful not to throw the baby out with the bathwater. If regulated and taxed correctly, the presence of online gambling companies within the region could be of great benefit both in terms of revenue and jobs, with no upper limit on both. At the same time, it's vital that companies coming to conduct business within the region play by the rules and contribute their fair share toward the society they operate within. The lawless days of the Philippine online casino industry may have ended in 2019, but there's still plenty of money on offer for those who want to conduct business fairly and play by the rules. 2020 is likely to be a harder time for online casino operators than 2019 was, but those who are fair and ethical appear to have nothing to fear.

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