• Subscribe
  • Magazines
  • About
  • Contact
  • Advertise
Wednesday 4 June 2025
  • zh-hant 中文
  • ja 日本語
  • en English
IAG
Advertisement
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
    • Africa
    • Australia
    • Cambodia
    • China
    • CNMI
    • Europe
    • Hong Kong
    • India
    • Japan
    • Laos
    • Latin America
    • Malaysia
    • Macau
    • Nepal
    • New Zealand
    • North America
    • North Korea
    • Philippines
    • Russia
    • Singapore
    • South Korea
    • Sri Lanka
    • Thailand
    • UAE
    • Vietnam
  • Events
  • Contributors
  • SUBSCRIBE FREE
No Result
View All Result
IAG
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
    • Africa
    • Australia
    • Cambodia
    • China
    • CNMI
    • Europe
    • Hong Kong
    • India
    • Japan
    • Laos
    • Latin America
    • Malaysia
    • Macau
    • Nepal
    • New Zealand
    • North America
    • North Korea
    • Philippines
    • Russia
    • Singapore
    • South Korea
    • Sri Lanka
    • Thailand
    • UAE
    • Vietnam
  • Events
  • Contributors
  • SUBSCRIBE FREE
No Result
View All Result
IAG
No Result
View All Result

All Aboard

Newsdesk by Newsdesk
Sun 1 May 2011 at 08:44
3
SHARES
66
VIEWS
Print Friendly, PDF & Email

Is there scope to rationalise online betting and gaming regulation in the Philippines?

A wide-ranging review of gaming policy announced last year in the Philippines by the country’s incoming president Benigno Aquino included asking whether there were any grounds for dovetailing the development and regulation of online and land-based gaming.

The question came up recently when Inside Asian Gaming spoke to Jose Mari Ponce, Administrator and CEO of Cagayan Economic Zone Authority (CEZA), on the fringes of the iGaming Asia Congress organised by Beacon Events at the Grand Hyatt in Macau.

“When the President instructed PAGCOR to look at the land-based operation, his order also asked for a review of the relationship between online gaming and land-based, and how that could be developed to generate more revenue,” says Secretary Ponce.

The country has been a trailblazer in embracing and licensing new technology for gaming and betting services—aimed both at offshore and onshore markets. It has led to some of the world’s leading offshore online betting brands choosing to operate from the country. But the Philippines market lead has created some overlapping of jurisdictional competencies as the industry and the delivery technology has developed.

An example is that currently in the Philippines there are two licensing authorities covering online gaming (three if you include the country’s National Telecommunications Commission, which oversees the provision of mobile telephony services including 3G services capable of accessing Internet-delivered gambling services). Thankfully operators only need one licence from one regulator at any one time. The question is who gets to issue it. Some observers say the multi-agency approach encourages competing fiefdoms within the industry, with one regulator sometimes seeking to exert control over bits of another’s business.

For the purposes of this discussion the two relevant Philippines bodies covering online gaming services are CEZA—via its master licensor, a commercial company called First Cagayan Leisure and Resort Corporation—and the Philippine Amusement and Gaming Corporation (PAGCOR). PAGCOR wears two hats as a regulator and an operator of land-based casinos and is the ‘senior’ of the two bodies. It was set up 33 years ago to regulate the land-based industry. That was at a time when the Internet was little more than a computer communication network for university academics. First Cagayan was set up under the CEZA framework (itself designed to help an underdeveloped province in the northeast of the main island of Luzon). By the time CEZA’s Interactive Gaming Act (2003), was passed by lawmakers, the Internet was a well-developed medium for delivering goods and services including casino gaming and sports betting. CEZA was the first government-sanctioned body in Asia to offer a legal licensing regime for online, offshore, gaming services aimed at nondomestic players.

An argument from some in the pro-reform lobby is that licensing for online gaming should ideally now come under CEZA/First Cagayan. This, proponents argue, would streamline the process and make the taxation burden more consistent (i.e. low). That in turn could lead to a bigger industry and therefore a bigger cake for all the different groups with stakes in the industry—the players, the service providers, the taxpayers and the state.

“Some casinos in the Philippines have online sports books licensed by PAGCOR. The PAGCOR tax rates are a bit expensive compared to us,” says Jose Mari Ponce of CEZA.

“That is what we are trying to rationalise, so that all online gaming can be taxed at the same rate. We charge 2% of the gross. The 2% of the gross charged in CEZA is a little bit less than the industry standard [offshore tax rates]. We have been using that since 2004.”

Industry sources say the ‘online sports books’ referred to by Mr Ponce are essentially ‘hybrid’ betting services based on phone betting but with prices posted online. Such operations usually pay 60% tax on the gross to PAGCOR. In return PAGCOR usually provides the staff for the operation. Alternatively operators can supply their own staff and negotiate a lower tax rate on the gross.

If some kind of rationalisation of online taxation policy were to take place, could it be done retrospectively? In other words, could those services paying the higher rate to PAGCOR at the moment end up paying the lower rate to CEZA?

“It may be applied even to the old deals, so we can give these investors clear incentives,” suggests Secretary Ponce.

“We wouldn’t want to disadvantage existing market participants by saddling them with the old, higher, tax rates. In practical terms what sometimes happens is that operators close their outlet and then reapply [for a First Cagayan licence]. “

In practice, industry sources say it might be very hard to rationalise online tax rates and/or consolidate regulating authorities. There are some sound administrative reasons why a multi-track approach to licensing online gaming came into being. They include the need to categorise services by target market (foreign or domestic players); the physical location of the betting process (cyberspace or casino/parlour) and the medium used to deliver the service (home computer, Internet café, public betting terminal or cellular phone). In this regard the Philippines is following a model familiar to other jurisdictions.

As one service provider explained: “There are PAGCOR-licensed casinos that only allow foreign players in, so in that case CEZA might be able to license the casino’s sports book. But in casinos where local players are allowed in, CEZA wouldn’t necessarily be the appropriate body. CEZA licensees are specifically precluded from taking bets from domestic players in the Philippines.”

In the online age, onshore/offshore distinctions cannot easily be ring-fenced. Technology has created overlaps in jurisdictional and regulatory competences. PAGCOR’s role is proof of that. Back in the late 1970s when PAGCOR was set up, the nearest thing to Internet communication was the fax machine and telephone. Historically therefore telephone betting was licensed by PAGCOR. Fast forward to the second decade of the 21st century and those telephone betting services have metamorphosed into hybrid products. An example of a hybrid sports betting product in the Philippines is where a player visits an outlet (either in a casino or in a specialist shop) to open an account but thereafter can place a bet over the phone or in person. Although the betting process itself is not conducted online, bet prices can be posted online by the service provider and reviewed online by the player and then bets called in by phone.

In other words, as the Internet has developed as a pipe for delivering interactive betting services and taken over from purely voice telephony betting, PAGCOR has got to keep oversight of an historic telephone betting product—but now with pricing delivered by online methods.

Not only has this multi-track approach to licensing had a long time to mature but also there appear to be many special arrangements and exceptions to general rules embodied retrospectively within its regulatory and taxation frameworks.

The option for operators of ‘hybrid’ online services (telephone betting with prices updated online) to pay a lower tax rate on the gross than officially advertised provided they bring in their own staff team, is a good example.

RelatedPosts

Philippines casino GGR up 630% quarter-on-quarter in 3Q20

PAGCOR: Manila’s Entertainment City casinos suffered combined 5.7% GGR decline in FY24

Tue 8 Apr 2025 at 13:55
Philippine tourist arrivals down 0.5% in 1Q25 on fewer visitors from South Korea, China

Philippine tourist arrivals down 0.5% in 1Q25 on fewer visitors from South Korea, China

Mon 7 Apr 2025 at 05:11
PhilWeb falls to US$10.5 million loss in FY24 on asset impairments

PhilWeb falls to US$10.5 million loss in FY24 on asset impairments

Fri 4 Apr 2025 at 03:51
Chris Newsome and 1xBet creating more opportunities for basketball players in Asia

Chris Newsome and 1xBet creating more opportunities for basketball players in Asia

Wed 2 Apr 2025 at 04:55
Load More

Unpicking such arrangements could be extraordinarily difficult in practical terms and also in political terms, as the different regulatory agencies involved are likely to want to protect their fiefdoms. In addition, any service provider that has been able to negotiate for itself tax rates or other conditions that are an improvement on the industry norm or average in its market segment, clearly has no interest in changing the status quo. Given those forces acting on the Philippines online gaming and betting industry, don’t expect the multi-track, multiagency approach to be abolished soon.

Tags: PAGCORPhilippines
Share1Share
Newsdesk

Newsdesk

The IAG Newsdesk team comprises some of the most experienced journalists in the Asian gaming industry. Offering a broad range of expertise, their decades of combined know-how spans multiple countries across a variety of topics.

Current Issue

Editorial – The real reason Philippines casino revenues are down

Editorial – The real reason Philippines casino revenues are down

by Ben Blaschke
Sun 30 Mar 2025 at 23:04

After enjoying a post-COVID surge in gaming revenues at its licensed casinos, the Philippines has hit a rocky patch. In...

Inside Thai IRs

Inside Thai IRs

by Andrew W Scott and Ben Blaschke
Sun 30 Mar 2025 at 22:59

No time to read this whole article? Here are the bullet points! With passage of Thailand’s Entertainment Complex Bill through...

Resorts World Las Vegas – Lighting up the north

Resorts World Las Vegas – Lighting up the north

by Andrew W Scott and Ben Blaschke
Sun 30 Mar 2025 at 22:52

Inside Asian Gaming recently visited Genting’s American icon Resorts World Las Vegas to take a closer look at a property...

A baccarat perspective

A baccarat perspective

by Ryan Hong-Wai Ho
Sun 30 Mar 2025 at 22:37

In the first of a two-part series, Ryan Ho explores how gaming innovations and market changes have shaped the prominence...

Evolution Asia
Aristocrat
GLI
Mindslot
Solaire
Hann
Tecnet
Nustar
Jumbo

Related Posts

Inside Thai IRs

Inside Thai IRs

by Andrew W Scott and Ben Blaschke
Sun 30 Mar 2025 at 22:59

No time to read this whole article? Here are the bullet points! With passage of Thailand’s Entertainment Complex Bill through parliament gathering pace as the nation looks to further boost its international tourism appeal, the prospect of a legalized casino...

Resorts World Las Vegas – Lighting up the north

Resorts World Las Vegas – Lighting up the north

by Andrew W Scott and Ben Blaschke
Sun 30 Mar 2025 at 22:52

Inside Asian Gaming recently visited Genting’s American icon Resorts World Las Vegas to take a closer look at a property that hasn’t yet lived up to the hype but which offers undoubted potential as a star of the North Las...

Baby steps

Baby steps

by Pierce Chan
Sat 29 Mar 2025 at 10:20

Despite receiving policy support from China’s central government, Hengqin is still struggling to fulfil its potential as a business hub and to fully integrate with neighboring Macau. IAG examines the key challenges and what must be done to ensure Hengqin...

Grand designs

Grand designs

by Ben Blaschke
Sat 29 Mar 2025 at 10:11

Clark’s Hann Casino Resort has unveiled to Inside Asian Gaming a new Canyon Casino concept that will become the main attraction when a major expansion of the existing casino space is completed in the next 12 months. Philippine integrated resort...



IAG

© 2005-2024
Inside Asian Gaming.
All rights reserved.

  • SUBSCRIBE FREE
  • NEWSFEED
  • MAG ARTICLES
  • VIDEO
  • OPINION
  • TAGS
  • REGIONAL
  • EVENTS
  • CONSULTING
  • CONTRIBUTORS
  • MAGAZINES
  • ABOUT
  • CONTACT
  • ADVERTISE

No Result
View All Result
  • Subscribe
  • Newsfeed
  • Mag Articles
  • Video
  • Opinion
  • Tags
  • Regional
  • Events
  • Contributors
  • Magazines
  • Advertise
  • Contact
  • About
  • Home for G2E Asia

© 2005-2024
Inside Asian Gaming.
All rights reserved.

  • English