For the past few months, lawmakers in the Philippines have been taking a closer look at the country’s gambling industry. With pressure from China, the Philippines has now announced a new crackdown on POGOs. It’s an interesting development and one that may have a major impact on the remote gambling operators currently licensed here.
A lot is happening in the Philippines right now. Today, we’re going to look at why this new crackdown has been announced. We’ll also look at what may happen here over the next few months.
The Philippines has an unusual set of gambling laws. Here, it’s illegal for online gambling operators based within the country to offer their services to Filipino players. Interestingly, the country does offer licenses to companies in the Philippines wishing to offer online gambling services overseas.
These internet gambling companies, called POGOs, help to bring the government millions of dollars every year. Recently, there’s been a huge increase in POGOs that offer their services specifically to Chinese nationals.
Mainland China bans almost all forms of gambling. That isn’t stopping POGOs from targeting Chinese players, though. Many of these online gambling companies employ Chinese nationals. There are even cases of these companies kidnapping individuals from China and forcing them to work. The Philippines police force has started to fight against these kidnappings.
Politicians in China are fed up with the rise in online gambling. Not long ago, President Xi Jinping met with Rodrigo Duterte and asked him to shut down the Philippines internet gambling industry. To the surprise of many, Duterte refused this request, claiming the industry employs too many individuals for him to shut it down.
It was great news for the offshore gambling operators here. This week, however, officials in the Philippines announced a new crackdown on POGOs.
As we’ve already mentioned, the online gambling industry in the Philippines helps to bring the government massive revenue earnings each year. It’s unlikely that the country will outright ban this industry. This week, Carlos Dominguez III set new laws on the offshore gaming companies operating in the country.
Dominguez, Philippines Finance Secretary, has officially ordered the country’s Bureau of Internal Revenue to shut down all POGOs that are failing to pay taxes. It comes after the discovery that many POGOs are not able or refuse to pay workers’ income taxes. Dominguez is also refusing to accept a lump sum from these companies to settle the matter. The exact amount that is owed must immediately be paid to the government.
This new crackdown on POGOs is not entirely surprising. The Philippines isn’t able to entirely kill its online gambling industry. Shutting down companies that fail to pay taxes, however, is perfectly legal.
China’s request almost certainly plays a part in this decision.
The government is also working to generate more revenue from this industry. So far this year, the Philippines has brought in USD 26 million in taxes from POGOs. Many feel this is considerably less than what the government should be earning.
PAGCOR, the Philippines gambling regulatory body, recently announced that it’s stopped issuing any new internet gaming licenses. This group is concerned with the growing number of Chinese workers entering the Philippines internet gambling industry. Lawmakers in China praised that decision.
Not everyone supports the recent crackdown on POGOs. The Trade Union Congress of the Philippines has offered a different solution. This group believes a new coordinating body should be created to manage and better control the country’s online gambling market.
Raymond Mendoza, president of the TUCP, recently stated that he’s:
“assessing the POGOs overall social implications and weighing the comprehensive benefits of this online gambling industry in our economy by putting on hold issuance of new operating licenses.”
The Asian gambling industry is in a strange place. Cambodia recently took steps to limit its gambling industry by shutting down all online gambling operators. Japan is in the process of expanding its gambling industry, with three casino-resorts scheduled to open here over the next few years.
For now, the Philippines is launching a crackdown on POGOs that aren’t paying taxes. We’ll need to wait and see whether or not this country chooses to set new restrictions on these companies in the future.
Make sure to let us know what steps you think the Philippines should take in the comments section below!
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