Any operator offering prediction markets in the Philippines would require licensing by gaming regulator PAGCOR and there currently exists no license category under which they could be issued, a legal expert has warned.
The issue of prediction markets – whereby individuals trade contracts on future events based on forecast probabilities – has made global headlines in recent months with companies like Kalshi and Polymarket testing the determination of regulators. This has seen some platforms gain federal regulation in the US under futures contracts and in the UK under gambling legislation, although other locations like Singapore, Thailand and Taiwan have banned prediction markets because they are deemed to be gambling.
In a new research paper published by Arden Consulting, lawyer Marie Antonette “Tonet” Quiogue said prediction markets would by necessity be deemed gambling under Philippines law but added there is no current mechanism under which PAGCOR can issue licenses.
“Philippine law defines gambling very broadly,” Tonet explained. “Under the Revised Penal Code and related laws, gambling is ‘[any] game or scheme the result of which depends wholly or chiefly upon chance or hazard; or wherein wagers consisting of money, articles of value or representative of value are made’. In other words, if you bet money (or anything of value) on an outcome that involves any degree of chance, it’s gambling by definition.
“Even if someone argued that predicting events involves skill or analysis, that won’t avoid the gambling classification – the presence of a wager on an uncertain outcome is enough to trigger the law. And since PAGCOR is the agency empowered to license and regulate gambling in the Philippines, any entity that wants to offer a real-money prediction market here would need PAGCOR’s blessing.”
Tonet noted that, at present, PAGCOR has not authorized any prediction market platforms and would likely view them as a form of betting or specialty game requiring a license. But issuing such a license would be problematic.
“In fact, PAGCOR has been expanding the categories of e-games and betting it regulates – from e-casino games to sports betting – but these still require the outcomes to be among those it has approved,” she said. “Unless and until PAGCOR creates a specific license category for prediction markets (or designates them under an existing category), any operation of this sort targeting Philippine users would be unlicensed and illegal. Simply put, if you run a real-money prediction market in the Philippines without PAGCOR (or other legal) authorization, you are running an illegal gambling operation, with all the attendant criminal penalties.”
Tonet also observed that, unlike the US, the Philippines lacks any alternative regulatory path whereby it could treat event contracts as financial derivatives and has no active commodities or futures exchange market to speak of.
As such, a prediction market cannot try to register with the Philippine SEC as a trading exchange for event contracts and there is not yet any law that clearly permits this.
In the US, industry lobby group the American Gaming Association has been vocal in its opposition to prediction markets with President and CEO Bill Miller last week criticizing the National Hockey League (NHL) for announcing a new partnership with Kalshi and Polymarket.
“Kalshi and Polymarket are offering sports wagers without any of the consumer protections or integrity standards required of licensed operators,” Miller said. “They lack fundamental safeguards such as responsible gaming tools and anti-money laundering controls. They’re offering sports betting to anyone 18+, where the vast majority of legal US states require individuals to be 21 to wager. And lastly, they’re not accountable to any state regulator or tribal authority – and that should alarm every stakeholder in the sports ecosystem.”
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