Philippine POGOs continue Chinese betting, Enticing Beijing’s Fury

China and the Philippines continue to disagree on Philippine offshore gaming operators (POGOs).

In 2019, Chinese President Xi Jinping made a direct request to President Rodrigo Duterte to shut down POGOs. Continued offshore gambling now poses a threat to the return of Chinese visitors, who made about 21% of arrivals to the Philippines prior to the outbreak.

President Ferdinand “Bongbong” Marcos, who entered office at the end of June, hasn’t made up his mind about POGOs despite repeated Senate hearings that expose the industry’s negative effects, including prostitution, human trafficking, and money laundering.

Hearings this month reveal that POGOs fall significantly short of government income estimates, bringing in around $6.25 million per month last year compared to more than $50 million expected.

The sector generated an estimated $1.8 billion in GGR last year, which is less than half of its peak size.

In his 2021 paper, Key Issues in the Philippine Gaming Industry, professor Leonardo “Don” Dioko notes two trends that POGOs continue to exacerbate: “[l]ocally organized and highly visible violent crime affecting the gaming industry” and “[v]ulnerability of the Philippines’ gaming industry from external dark actors.”

Marcos should take into account two key facts concerning Philippine offshore gambling in the face of a potential ban on POGOs that is being backed by a burgeoning public outcry and ongoing pressure from Beijing.

Even with the best intentions and available technology, it can be challenging for operators to block betting from China. It’s considerably difficult to accept bets from China, though.

China opposes
One of the main focuses of President Xi Jinping’s fight against gambling and illicit cash flight continues to be the prevention of offshore betting. Industry watchers speculate that the Philippines would demand POGOs to ban access to their websites from China in order to comply.

“We will never do business with Chinese people. According to Footballbet.com CEO David Leppo, we won’t do it in the Philippines. From the United States, where offshore gambling is likewise prohibited, or from China, you are unable to access any of our websites.

A representative for Kindred Group, a Malta-licensed company that runs several online gambling sites, states that “our stance is that we do not undertake any business in China.”

A spokeswoman for the Malta Gaming Authority (MGA) informs iGB that the MGA expects its licensees to adhere to the conditions of their applicable licenses, including exercising due diligence when choosing the respective jurisdictions in which they choose to operate.