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Philippine Amusement and Gaming Corporation (PAGCOR) chairman and CEO Alejandro Tengco announced a significant 50% decline in activity on licensed online gambling sites after the recent prohibition of gambling-related links in e-wallets. The country’s central bank, the Bangko Sentral ng Pilipinas (BSP), enforced the decision as part of continuous efforts to control the growing online gaming market.
The removal of e-wallet links, ordered last week by BSP Governor Mamerto Tangonan, was intended to cut short convenient access to gambling services through financial apps. While PAGCOR recognizes a significant drop in activity across licensed platforms, the agency also notes a growing surge in use of illegal online gambling platforms, pointing to the sophisticated nature of challenges regulators are facing.
Increase of Illegal Operators Under Regulation Crackdown
In spite of the seeming effectiveness of the e-wallet cap in curbing authorized online gaming transactions, illicit sites persist. Tengco cautioned that approximately 60% of online gaming activity witnessed comes from operators operating outside the Philippines, in jurisdictions including Russia, Dubai, Abu Dhabi, and Cambodia. These foreign illicit operators have fewer restrictions and employ high-pressure incentives that entice players into heavier gambling behavior.
Tengco indicated illegal sites provide far larger bonuses to attract players, doubling or tripling deposits, for instance, practices not seen on regulated sites. This unregulated setting provides a challenging situation for authorities to battle the proliferation of illegal gambling and attendant social ills such as gambling addiction, particularly among the youth.
Scale of the Challenge: Licensed vs. Illegal Sites
PAGCOR statistics highlight a dramatic difference between licensed and illegal operators in the Philippines. There are about 77 licensed Internet gaming sites placed within PAGCOR’s regulatory control, but the estimated figure for illegal sites outside official control is 12,000. This disparity is behind concerns for consumer protection and the adequacy of current regulatory frameworks.
Tengco highlighted that most of the problems relating to online gambling addiction and attendant harms are likely to originate from these illicit sites. The agency continues to work on imposing measures to crack down on illegal players, but the task is handicapped by their offshore status and failure to comply with Philippine laws.
Industry Response and Calls for Balanced Regulation
The recent regulatory steps, such as the e-wallet link ban, have stirred controversy in the sector and among policymakers. Whereas others voice out for a total ban on all online gambling, the majority of operators and associated businesses prefer a balanced regulatory system. Proponents of prohibition argue that it is unlikely to curb illegal gambling but will instead drive users further underground, with the stakes increasing.
The discussion continues on what’s the best way to protect Filipino consumers and still allow legitimate operators to conduct business profitably under transparent and enforceable rules. The sustained effort of PAGCOR in licensing the industry demonstrates its familiarity with the subtleties of these issues, striking a balance between matters of public interest and the economic benefits created by the online gaming sector.
Looking Ahead
The effect of these actions will emerge over time. The early statistics revealing a halving of transactions on licensed sites represent a marked change in the marketplace. However, the persistence and expansion of illegal platforms emphasize the ongoing challenges of regulation in the digital era.
For PAGCOR, moving forward will involve collaboration with financial regulators, law enforcers, and industry stakeholders to closely monitor and regulate the emerging online gaming sector in the Philippines. The stakes are high, with a desire to guard vulnerable consumers, uphold market integrity, and ensure a healthy online gaming business under good regulation.
Source: Inside Asian Gaming (IAG)
