Leading industry law firm Arden Consult believes the recent revelation by Philippine gaming regulator PAGCOR that it will require licensed online operators to pay a monthly Minimum Guaranteed Fee (MGF) will not only solve issues of under declaration or misdeclaration of revenues but also result in significant market consolidation with many smaller operators closing down.
Under the terms of the new MGF policy, which was quietly unveiled in mid-December, licensed operators serving the Philippines’ domestic market and who offer electronic casino games will from 1 April 2026 be pegged to a benchmark of Php30 million (US$510,000) in monthly GGR and must pay a monthly MGF of Php9 million (US$153,000). Those who do not offer e-casino games, such as sportsbooks, will be pegged to a benchmark of Php15 million (US$255,000) in monthly GGR and must pay Php3 million (US$51,000).
Those benchmarks will from 1 October 2026 rise to Php35 million (US$595,100) in GGR and Php10.5 million (US$178,500) in fees for those offering electronic casino games, or Php20 million (US$340,070) in GGR and Php4 million (US$68,000) in fees for those that don’t.
The rates represent an effective tax rate of 30% on e-casino operators and 20% for others at the minimum rate.
Importantly, operators must pay at least the minimum fee regardless of whether or not they reach the monthly benchmark.
In a new research paper detailing recent regulatory changes within the Philippines gaming sector and how they are likely to reshape the industry in 2026, Arden’s CEO and Head of Regulatory and Compliance, Marie Antonette “Tonet” B. Quiogue, described the MGF policy as a “deliberate market correction” that makes underreporting “economically irrational”.
“The Minimum Guaranteed Fee does not appear to be a sudden revenue grab. It seems to be a deliberate and, in many ways, overdue market correction – approved by the PAGCOR Board with a clear logic,” Tonet wrote.
“By setting a minimum floor and assessing [operators] on the higher of the MGF or the percentage-based PAGCOR share, PAGCOR closes the space for operators to remain licensed while consistently reporting negligible revenue. Put simply: the MGF makes chronic underreporting economically irrational.”
The new mechanism also forces disclosure, explains Tonet, by compelling any operators who genuinely cannot reach the minimum benchmarks to confront PAGCOR with the reality of their business. By facing Board-level scrutiny from PAGCOR and drawing low-performing licensees out of invisibility, the regulator is inserting a safeguard given that licensees producing no meaningful revenue can pose a regulatory risk by eying illegal channels to make up the shortfall.
“The MGF, therefore, does not just protect government revenues. It steers the industry away from the very dynamics that ultimately doomed the POGO regime: fragmentation, opacity and licenses used as convenience rather than as a commitment to regulated operations,” Tonet wrote.
The overarching impact of PAGCOR’s MGF will be consolidation, according to Arden Consult’s own research, which found that of the 65 licensees or Gaming System Administrators (GSAs) currently operating in the Philippines, only around 25 meet or exceed the Php30 million threshold. Another handful hover just below this threshold while around 40 fall well short.
“The implications are unavoidable,” said Tonet, noting that other regulatory changes such as enhanced KYC requirements and the removal of direct links from e-wallets have also squeezed revenues for many.
“Some will surrender their licenses. Others will seek investors or partners. A license – even an underperforming one – has value, particularly to well-capitalized players looking to enter the Philippine market without starting from scratch, and especially during a time where a moratorium has been imposed on new applicants. We are already seeing inquiries along these lines.”
Coupled with PAGCOR’s B2B accreditation framework – which limits who can provide games, platforms, payment rails and marketing services to the regulated market – Tonet stated that the MGF policy aims to strengthen the Philippines’ licensed domestic online gaming market while also discouraging black market operations that are estimated to comprise as much as 70% of the market presently
“As that illegal activity is disrupted – through payment restrictions, marketing limits, supplier discipline, and enforcement pressure – it does not simply disappear. A meaningful portion is likely to migrate to the regulated platforms that remain accessible, trusted and operational,” Tonet said.
“In that sense, stricter enforcement does not only burden licensed operators; it can also feed them. Channelization becomes the bridge between these two rules: as more players move into the legal market, licensed operators are better positioned to meet the minimum guarantees and the system begins to reinforce itself.”
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