The head of Philippine gaming regulator PAGCOR’s online gaming department says the country is edging closer to implementing a regulatory framework that covers the entire industry ecosystem, describing recent “market correction” as an opportunity to build a more sustainable long-term industry.
However, in a Keynote Address delivered at the inaugural CiG iDEA Summit – part of the IAG EXPO – at Manila’s Newport World Resorts on Monday, Jessa Mariz R. Fernandez also warned that challenges remain, specifically around the rapid advancement of technology and the ever-present threat of the black market.
The Philippines and other jurisdictions would, she added, be watching New Zealand closely as it establishes a regulated online casino industry to see how they address many of the issues being experienced elsewhere.
“A successful gaming market is not defined simply by how fast it grows. It is defined by how well it is governed,” Fernandez said.
“For several years, the electronic and online gaming sector in the Philippines experienced exceptional growth. More recently, however, the market has undergone a significant adjustment. From PAGCOR’s perspective, this should not be viewed simply through the lens of market performance. Markets mature, markets correct and markets evolve. Periods of adjustment test the resilience of businesses. They challenge regulators to examine whether existing frameworks remain fit for purpose and they create an opportunity to make meaningful reforms.
“For us, therefore, the current environment is not simply a signal of decline. It is an opportunity to make a more deliberate and forward-looking view of how the industry should evolve. Our responsibility as regulators is to ensure that whatever the direction of the market would be, the regulatory framework remains credible, sustainable and capable of protecting the public interest.
“That principle has guided many of PAGCOR’s reforms. As the industry becomes more complex, with gaming administrators, B2B providers, technology companies, payment providers and other support businesses such as Special Class BPOs becoming increasingly integral to the ecosystem, we recognize that regulation could no longer focus on the operator at the end of the chain. Responsibility has to follow the entire ecosystem.
“That is why PAGCOR has strengthened its framework for B2B providers, including that of Special Class BPOs, introduced transition guidelines for existing providers working with accredited gaming system administrators, instituted guidelines for cash rebates and cash back programs, expanded the coverage of offenses and penalties framework, and adopted more consistent standards for violations across the regulated ecosystem. We have also continued to consolidate regulatory requirements to make them clearer, more consistent and more transparent.”
The Philippines holds a unique place within the Asia-Pacific online gaming space as the only jurisdiction to currently offer a regulated market for all major verticals, although this will soon change as New Zealand looks to introduce a regulated online casino market and issue up to 15 licenses by year’s end.
Fernandez noted that “many across the industry are watching [New Zealand] closely – not because every jurisdiction will follow the same path, but because policy questions being considered there are questions that regulators everywhere will recognize.”
In the Philippines, she said, “we are confronting many of these same issues. But we are doing so from a perspective of a market that has already experienced rapid digital growth, significant structural change and now a period of adjustment.”
What will shape the future of both New Zealand and the Philippines – and likely determine the success of their regulatory regimes – is how they address the challenge of technology, particularly AI, Fernandez explained.
This is because online gaming as an industry will inevitably continue to evolve and it is up to regulators to evolve alongside.
“Technology is transforming how gaming products are developed, delivered and experienced. Payment ecosystems are changing rapidly,” she said.
“Artificial intelligence is beginning to influence everything from customer engagement and fraud detection to compliance and operational efficiency. And at the same time, regulators are confronting risks that are increasingly complex, interconnected and often borderless. As a result, online gaming has become one of the most closely scrutinized sectors of the digital economy.
“And as we look ahead, there is another force that will increasingly test our regulatory frameworks, artificial intelligence. AI presents regulators with the paradox. The same technology that can help us detect fraud, identify unusual activity, improve compliance and make regulatory processes more efficient can also be used to make fraud more sophisticated and harder to detect.
“The challenge, therefore, is not to resist technology. It is to ensure that our regulatory frameworks evolve alongside it. For PAGCOR, this means continuously reviewing our policies, engaging with legitimate industry stakeholders, strengthening our coordination with government agencies and remaining open to new approaches that can make regulation more effective.
“The future of online gaming will undoubtedly be shaped by technology, but whether that future is sustainable will ultimately depend on something more fundamental. The quality of the regulatory framework will build beyond it. Regulation cannot be static in an industry that is constantly evolving.”
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