iGaming Operators in the Philippines Receive Massive Tax Break
LISTEN TO THIS ARTICLE:The Philippine Amusement and Gaming Corporation (PAGCOR) has announced a significant reduction in the gaming tax levied on domestic online gaming providers, commonly referred to as PIGOs. The move aims to tackle the proliferation of grey market operations within the online gaming sector.
Cleaning Up Philippine Gaming
Chairman and CEO of PAGCOR Alejandro Tengco disclosed this planned tax cut during a regulators panel at ICE VOX in London. Despite experiencing a substantial 90% year-on-year growth in 2023, licensed PIGO operators still represent only around 30% of the Philippines' domestic online gaming market. Tengco attributed this partly to the historically high taxes imposed on licensed operators.
Related: PAGCOR Could Introduce iCasinos in the Philippines This YearIn an effort to address this issue, PAGCOR had previously reduced the tax rate from approximately 58% to 42.5%. However, recognizing the need for further action, the gaming regulator and state-led casino operator is now planning to lower it to 35% starting next month. Tengco emphasized that this reduction aims to incentivize illegal operators to surrender and apply for legitimate licenses.
The strategy seems to be yielding positive outcomes, as evidenced by a decline in the closure of existing licensees and a surge in the number of applications for new licenses. Tengco highlighted the importance of this initiative in fostering growth among legitimate licensees.
Additionally, Tengco provided an update on the Philippines' offshore gaming industry, now referred to as Internet Gaming Licensees (IGL). Last year, all licenses for the previous POGOs were suspended due to rampant illegal activities. Tengco reported significant progress, stating that about 70% of the old licensees have been eliminated, with the number reduced from 250 to 75 by the beginning of 2024.
Moreover, there are approximately 20 pending applications under review. Tengco emphasized PAGCOR's commitment to eradicating criminal activities within the industry, emphasizing the agency's stern stance against illegal operations.
PAGCOR Advances Shift Away from Casino Ops
In a separate development, Tengco confirmed ongoing efforts in the land-based gaming sector. PAGCOR is actively working towards revamping and eventually privatizing its 41 self-operated casinos. The privatization of these casinos has been a focal point of Tengco's leadership, aiming to address concerns regarding PAGCOR's dual roles as both a regulator and an operator.
The chairman outlined plans to initiate the privatization process by the last quarter of 2025, acknowledging the need for amendments to PAGCOR's charter to clearly delineate its regulatory responsibilities. Tengco stressed the importance of transforming PAGCOR into a purely regulatory body, signaling a commitment to enhancing transparency and accountability within the gaming industry.
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