Uncertainty hounds online gaming in the Philippines

UP IN THE AIR. 'There will be no renewal of e-gaming licenses. We found out that over 100 outlets were in violation of distance requirements,' PAGCOR's Domingo tells senators. Photo by Chrisee Dela Paz/Rappler

UP IN THE AIR. 'There will be no renewal of e-gaming licenses. We found out that over 100 outlets were in violation of distance requirements,' PAGCOR's Domingo tells senators.

Photo by Chrisee Dela Paz/Rappler

MANILA, Philippines – PhilWeb Corporation and Leisure & Resorts World Corporation saw their share price balloon on Thursday, August 25, 2016 – a day after President Rodrigo Duterte had a change of heart, announcing that the country's booming online gaming industry may return if certain conditions are met.

On Thursday, shares of PhilWeb surged by 50% to P8.10 apiece, while those of Leisure & Resorts also went up by 50% to P5.15 each, a day after Duterte told a media briefing that he will allow online gaming companies to operate again should they pay taxes correctly and avoid locations near schools and churches.

Both companies told the local bourse that they are unaware of any material development or information that may have caused the unusual price movement

Trading performance of these firms were on a downward spiral after Duterte had announced a crackdown on online gaming.

Following Duterte's order, the Philippine Amusement and Gaming Corporation (Pagcor) had put the brakes on renewing online gaming licenses.

First on its list was PhilWeb. Despite PhilWeb's several proposals, PAGCOR had refused to renew its license to operate over 300 e-bingo and e-gaming outlets across the Philippines.

Drastic major policy change

"There will be no renewal of e-gaming licenses. We found out that over 100 outlets were in violation of distance requirements," Pagcor chairperson Andrea Domingo said in a Senate hearing in Pasay City on Wednesday, August 24.

Philippine Senator Gringo Honasan even questioned the perils of the drastic major policy change on online gaming.

"When did it start? What will be achieved by putting e-gaming on hold?" Honasan asked Domingo during the hearing. (READ: PhilWeb to close e-Games outlets despite Ongpin resignation)

According to the chief of Pagcor, the non-renewal of online gaming licenses started "when the President said he doesn't like online gaming."

Aside from the foregone annual revenue of P10 billion, Domingo said the non-renewal of online gaming licenses will also impact "over 15,000 employees."

'Only for the foreigners, rich Pinoys'

"Before we were indiscriminate. We allow stations where the masses are – who actually cannot afford to wage. Now, we don't want that," Domingo added.

To offset the foregone annual revenue of about P10 billion due to the non-renewal of licenses of online gaming, Domingo said Pagcor is eyeing profits "from bigger casinos where they target only the foreign market."

"There are many Filipinos who are becoming addictive to gambling even if they cannot afford it in the first place. The rich ones, gaming is amusement for them. But for the low-wage earners like tricyle drivers, they should be stopped from participating in this," Domingo said on the sidelines of the hearing.

Domingo added that Pagcor is "looking at other ways to regain the foregone revenue like an offshore gaming that will only cater to foreigners, not even overseas Filipinos."

"We will be restricting dress code. For example, in Entertainment City, those who have no cars will have a difficult time to access their casinos. Our thrust is going to integrated casino resort development. We are limiting gaming to 15%-20%," Domingo said.

Domingo said requirements for offshore gaming catered to foreigners are expected to be out next month.

"[We expect to release requirement] at the start of September. I want 100% verfication on all requirements. This venture will cover what we loss from e-gaming and e-bingos," the Pagcor chairperson said.

For 2016, Pagcor expects a total income of P46.38 billion and plans to contribute P28.87 million to their nation-building projects on health. 

"The 2016 estimated actual revenue and contributions to nation building are lower than the 2015 actual due to the exclusion of the August to December e-games and e-bingo budget of P3.65 billion," PAGCOR told House of Representatives on Tuesday, August 23. – Rappler.com