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Philippines’s CEZA commits to recover billions loss of revenue due to PAGCOR’s ‘failure’ to regulate

August 23, 2023 Philippines Casino & Hotel

The Cagayan Economic Zone Authority (CEZA) is the government-owned corporation tasked with developing the Cagayan Special Economic Zone, in the northernmost province of the Philippines; CEZA’s CEO, Katrina Ponce Enrile cites abuse and extortion of licensees by ‘misguided’ law enforcement; CEZA plans to have a dedicated ‘security force’ to ‘protect licensees from undue harassment.’

Original story by Kelsey Wilhelm for Asia Gaming Brief

The CEO of the Cagayan Economic Zone Authority, Katrina Ponce Enrile, told AGBrief that the Philippine Amusement and Gaming Corporation (PAGCOR)’s attempt at regulating offshore gaming operators (POGOs) “has failed.”

The Cagayan head further proposes the operator /regulator PAGCOR “leave the offshore component of gaming in the Philippines to the freeports, like CEZA.”

“CEZA is committed to maximizing and recovering billions in lost revenues. Through effective monitoring of gaming activities, enhanced enforcement, and robust monitoring systems, we strive to eliminate revenue leakages and ensure that our licensees enjoy a fair and equitable ecosystem,” Katrina Ponce Enrile, told AGBrief.

PAGCOR, the Aurora Pacific Economic Zone (APECO), and CEZA, are the only licensed government agencies (AGAs) which the local anti-money laundering watchdog has called “appropriate” to “undertake the prudential regulation of Internet-based casino operations.” The nation’s Anti-Money Laundering Council (AMLC) and the AGAs “jointly supervise Internet-based casinos.”

CEZA, by Charter the first authorized zone to explore online gaming in the Philippines, has been operating in the space for over two decades.

Business magnate turned CEZA CEO, Katrina Ponce Enrile – whose father Juan Ponce Enrile “also wrote the PAGCOR charter” – told AGBrief that the offshore gaming issue “is territorial, therefore they (PAGCOR) should only be dealing with local bets.”

Katrina Ponce Enrile underlined that the POGOs issue “just grew without people really understanding the magnitude, the potential, the ramifications, or the consequences that it could create.”

“Consequences” include waves of arrests, allegations of human trafficking, crypto scam rings, and other illegal activity reports in PAGCOR-licensed POGOs.

PAGCOR has made headlines this year for its crackdown on illegal gambling operations.

Recently, authorities raided an alleged POGO and ‘cybercrime hub’ in Pasay City, Metro Manila; a total of 650 workers, 464 of whom are Filipinos and 186 foreigners of various nationalities, were taken into custody.

Police early this year also rescued around  3,000 Filipino and foreign workers while serving a search warrant on a Las Piñas City POGO firm allegedly involved in human trafficking and other illegal activities.

PAGCOR has mandated review of all POGOs gaming licenses under its purview in an attempt to claw back unpaid tax revenue, and an increase in rates – all expected to drive away smaller operations and preempt illegalities.
Recently, PAGCOR announced that it will go after 33 POGOs in the country for unpaid dues.

Filipino pols have likewise pushed the Marcos government to issue an absolute ban, with one senator saying that online gambling operators get away with ‘billions of unpaid taxes Other senators have cited POGOs as avenues for human trafficking and other crime.

National government figures have also made pronouncements in support of these recent developments against POGOs, with the country’s Finance Secretary saying that the revenue is not worth retaining the industry.

On the local government side, since last year, other component cities of Metro Manila have made regulations for POGOs with the latest being Valenzuela issuing an outright ban in the city early this year.

Through it all, the regulatory agency was successful this year in raking in growth. Recently, PAGCOR also announced that it will start privatization by the year 2025, with about 50B to 60B pesos in revenue predicted.

During his State of the Nation Address, PH President Marcos lauded the performance of the PAGCOR, citing its contributions to state revenue, on top of its recent milestone of achieving an uptick of revenue growth at 35.6%.

The government agency, which celebrated its 40th year this year, cited that its contributions could reach PHP 70B by the end of this year

Learn more about this latest development in CEZA as it commits and vows to protect licensed POGOs, as well as the benefits of PAGCOR’s new framework to the economic zone in the northernmost province in the Philippines.

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