Philippines targets illegal offshore gambling operators

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Philippines targets illegal offshore gambling operators

Philippine authorities have initiated a crackdown on illegal offshore gambling operators, many of which are run by Chinese firms, amid increasing calls for a ban due to alleged connections to criminal syndicates.

The country’s gaming regulator chief announced on Thursday that approximately 250 to 300 offshore gambling firms are operating without a license in the Philippines, a figure about six times higher than the 46 legitimate gaming operators in the country.

Alejandro Tengco, chairman of the state regulator Philippine Amusement and Gaming Corp (Pagcor), in a telephone interview with Reuters, said:

Together with the police, we search for these illegal operators, conduct raids, and shut them down.

The online gaming industry took off in the Philippines in 2016, expanding rapidly as operators leveraged the country’s liberal gaming laws to attract customers from China, where gambling is banned. At their peak, Philippine offshore gambling operators (Pogos) numbered 300 and employed over 300,000 Chinese workers. However, the pandemic and stricter tax regulations have forced many to relocate or go underground, according to Tengco.

The crackdown was prompted by reports of Pogo-related crimes, including human trafficking, torture, kidnapping, and fraudulent activities such as credit card scams, crypto investment fraud, and “love scams,” where criminals use fake online identities to extract money from victims.

In March, law enforcement raided a Pogo facility in Pampanga province, rescuing more than 800 workers, including both Filipino and Chinese nationals, as reported by local media.

Security officials have voiced concerns over illegal Pogos, with the defense minister highlighting that criminal syndicates disguised as Pogos pose a national security threat. The national security council has declared that these illegal activities cannot be tolerated.

Defense Secretary Gilberto Teodoro stated on Wednesday:

The concern is that we must stop these syndicated criminal activities operating from our base, which undermine our financial standing, country ratings, and corrupt our society.

Pagcor’s Tengco mentioned that the gaming regulator would follow the government’s final decision on Pogos, which might involve a complete ban on the industry.

Despite the controversy, the government anticipates generating 24.5 billion pesos ($417 million) in Pogo fees and taxes from the 46 licensed Pogos, half of which are Chinese firms, Tengco added.