Philippines gaming regulator PAGCOR has revealed it will reduce the gaming tax it charges domestic online gaming providers, or PIGOs, from its current rate of 42.5% to 35% from March in an effort to curb grey market operations.
The planned tax cut was revealed by PAGCOR Chairman and CEO, Alejandro Tengco, while speaking on a regulators panel at ICE VOX in London on Monday, and in an ensuing interview with Inside Asian Gaming.
Despite the PIGO industry enjoying 90% year-on-year growth in 2023, Tengco noted that licensed operators still only account for around 30% of the Philippines’ domestic online gaming market – in part because of the high taxes licensed operators have traditionally paid on revenues generated.
PAGCOR has previously lowered the rate from around 58% to 42.5% to address this issue but will lower it further from next month.
“One of the things that I had to change upon my ascension to office was that the share we were getting from online licensees was over 50%, and that was the main reason why the grey market in the online gaming industry in the Philippines was getting bigger and bigger,” Tengco explained.
“So, what we have done is brought down the rates to 42.5% and as of March we are bringing it down further to 35%. The main reason we are doing this is to encourage the ones that are operating illegally to surrender and perhaps apply for a license.
“The move we have made [in lowering the rate to 42.5%] has already turned out to be positive because not only have we seen the closure of existing licensees decline, we are seeing growth in the number of applications for new licenses. That’s why we are bringing down license fees for legitimate licensees.”
Tengco also provided an update on the Philippines’ offshore gaming industry – once known as POGO but since renamed to Internet Gaming Licensees or IGL for short – having last year suspended the licenses of all POGOs because “most of them had already shifted to illegal activities.”
“I would like to gladly report that have been able to rid about 70% of the old licensees,” he said on Monday. “From an initial 250 we are down to 75 licensees at the start of 2024, with around 20 more applications pending review. We have weeded out all the criminal activities in the industry.
“I am of the belief that by doing so we were able to make everyone aware that PAGCOR means business and by cleaning up the entire overseas license business we have shown to the world that we will not tolerate any criminal activities.”
Separately, Tengco confirmed that work in the land-based gaming space is continuing as PAGCOR looks revamp and eventually privatize its 41 self-operated casinos.
Privatization of PAGCOR’s casinos has been a key theme of the chairman’s tenure following criticism of the agency’s dual roles as both a regulator and an operator.
“We are in the process of privatizing the 41 facilities that PAGCOR owns and hopefully we will be able to start the privatization process towards the last quarter of 2025,” Tengco said.
“There is much to be done and we have to amend our charter because it doesn’t clearly define what specific role PAGCOR has to have but I, together with the Board, have decided that the only way to go is for PAGCOR to be a pure regulator and get rid of the operations aspect.”
