IMGL Magazine April 2022

Philippines licensing policies

and plug the hole in tax revenues, PAGCOR launched a new scheme, the Philippines Inland Gaming Operator (PIGO) scheme and started issuing licenses in late 2020. PIGO permits are different from the now widely defunct POGO (Philippine Offshore Gaming Operator) licenses which authorize their holders to provide gambling services to players overseas. When the scheme launched, PIGO services were aimed exclusively at VIP players already on PAGCOR’s player database. Whilst this was subsequently amended, Philippine casino operators are still only allowed to offer online gambling services to residents of the country. In a further set of restrictions under the PIGO scheme, VIP players wishing to engage in digital gambling are required to deposit funds at the physical casino where they usually play. They also need to visit the casino in order to withdraw funds. These visits are deemed necessary for “regulatory purposes”, namely KYC. Despite the limitations of the scheme, 21 PIGO licenses have been issued and it has been hailed a success. As pandemic restrictions have been lifted, operators have seen their venue-based business start to return to pre-2020 levels without any downturn in remote activity. This suggests that PIGO operations have been a marketing boost and adds further weight to the claim that there is unmet demand for a digital offering. PIGOs in operation The PIGO scheme was set up to do three things: provide a source of revenue for Philippines’ land-based operators, generate much-needed tax revenue for the government and tackle illegal offshore gambling which had proliferated in the face of lockdowns of onshore venues. The scheme allows operators to offer games online whether table games, slots, sports book or the ever-popular e-sabong. While the user experience may be similar, it should be said that PIGO

operations are not true online gaming: they are remote versions of the product offer available at the venue-based operation. Those operators who were able to move quickly to a remote gaming platform were those, like DFNN and Philweb, whose brick and mortar infrastructure was built on internet casino software. Since launch, operators have moved rapidly to expand their offer with many adding sports betting through joint ventures with specialists in the market such as Jade Entertainment. The scheme was initially limited to local, pre- existing VIP players, a restriction which left many operators frustrated. This was quickly changed, however, to allow mass market players to register and the response was much more encouraging. Operators remain subject to restrictions limiting the marketing options they can engage in. Marketing via text message and email are restricted although social media marketing is permited. From a standing start in late 2020, the program has evolved from one which allowed operators the chance to make some revenue when retail was shuttered, to an extension of the gambling offer in the country. Remote gambling has become a way to extend the playing time of casino customers, but it has also allowed operators to reach beyond the immediate vicinity of their premises. As a country consisting of over 7000 islands, vast areas were unserved by the retail market and operators are still exploring the extent of this previously untapped market. When taken together with an estimate for the grey and black markets, the total size of the Philippines market is considerably larger than previously thought, and this has generated a lot of interest among foreign investors attracted by the opportunity the country may represent. Of the three stated objectives of the PIGO scheme, the first two, a lifeline for operators and a replacement for lost tax revenues, seem to have been achieved to a greater or lesser extent. It remains to be seen whether the third objective,

IMGL Magazine • April 2022 • 39

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