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What is the future for the POGO licensing regime in the Philippines?

The Philippine Offshore Gaming Operators (POGO) licensing regime has been under scrutiny in recent times, prompting the Philippine Amusement and Gaming Corporation (PAGCOR) to take decisive measures to address issues plaguing the industry. In a bid to restore its credibility and reputation, PAGCOR has embarked on a path towards a more stringent and accountable regulatory framework. This article delves into the current state of the POGO licensing regime, recent actions taken by PAGCOR, and the potential implications for the future growth of the industry.

The Current State of POGO Licensing Regime:

The POGO industry in the Philippines experienced significant growth over the past years, attracting numerous offshore gaming operators and service providers. However, this rapid expansion also brought to light concerns regarding illegal activities and regulatory oversight. The lack of transparency and accountability in some operations led to calls for reforms to safeguard the industry's integrity.

Recent Actions Taken by PAGCOR:

Recognising the pressing need to address the industry's challenges, PAGCOR has adopted a proactive approach. At G2E Asia, PAGCOR Chairman and CEO Alejandro Tengco announced the regulator's decision to place all existing POGO licencees and service providers on probationary status. This move requires them to reapply for licences under a revised regulatory framework that is soon to be unveiled.

Stricter Evaluation of Beneficial Owners:

One significant aspect of the forthcoming regulatory framework is the emphasis on evaluating the beneficial owners of offshore service providers. PAGCOR intends to hold them accountable for any illegal activities conducted by their companies. This measure aims to enhance transparency and ensure that responsible individuals are liable for the actions of the entities they own.

Potential Consequences for Non-Compliant Entities:

PAGCOR's commitment to upholding the integrity of the industry is reflected in the strict penalties for non-compliant entities. Under the new framework, any licencee or service provider found to be engaging in activities beyond their granted license or accreditation will be denied licences. Additionally, companies failing to reapply within the specified period may face endorsement for license cancellation.

Collaborative Efforts with Government and Law Enforcement Agencies:

To bolster regulatory oversight, PAGCOR has strengthened its cooperation with other government agencies and law enforcement bodies. Offices within accredited POGO hubs have been established to facilitate closer supervision and investigation of potential violations. This increased coordination aims to curb illicit activities and maintain the industry's integrity.

Emphasising Compliance and Reporting:

The new regulatory framework requires intensified inspections and verification of compliance from offshore gaming licencees and service providers. Furthermore, PAGCOR mandates timely submission of reports to enforcement agencies for investigation and verification of findings. Stricter implementation of regulations and the imposition of heavier penalties for violators are integral components of the revamped approach.

The Future of POGO Licensing Regime:

Despite the challenges faced by the POGO industry, the outlook for its future remains promising. PAGCOR's commitment to cleaning up the sector and reviving its reputation could pave the way for sustainable growth. While the current framework may have facilitated certain illegal activities, the forthcoming measures are expected to instill greater confidence in the industry and the Philippines as a whole.

Potential Growth and Economic Impact:

Online gaming continues to exhibit resilience in the Philippines, with Gross Gaming Revenue (GGR) from the sector projected to reach Php24 billion (US$441 million) in 2023.

PAGCOR aims to triple the GGR from the online gaming segment compared to 2020, signalling a potential surge in economic contributions and job opportunities.

In summation, the POGO licensing regime in the Philippines is at a pivotal juncture, with PAGCOR demonstrating its commitment to creating a more accountable and transparent regulatory framework. Stricter evaluations of beneficial owners, enhanced collaboration with government agencies, and imposition of tougher penalties for non-compliance are key pillars of the forthcoming regulatory approach.

As these reforms take effect, the industry can anticipate a more sustainable and prosperous future, provided all stakeholders wholeheartedly embrace the new framework. By striking a balance between stringent regulations and fostering growth, the Philippines has the potential to establish itself as a prominent hub for responsible and legitimate online gaming operations.

At SAXE Global we will strive to monitor the situation closely and provide up-to-date information regarding the implementation of the new regulatory framework and its impact on the POGO licensing regime in the Philippines.

Book a free consultation with our experts here.

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