Philippines Moves to Tax and Regulate ‘E-Sabong,’ Online Cockfighting Betting

A legislative committee in the Philippines on Tuesday approved a bill to regulate and tax online betting on cockfighting.

While banned in the US and many jurisdictions around the world, the blood sport is popular in the Philippines, where it is known as “sabong.” There, both illegal and legal cockfights occur.

Sabong bouts involve spectators placing wagers while the birds fight to the death with hooked razors, known in English as “gaffs” or “slashers,” attached to their talons. The birds are often injected with steroids to increase their fighting potential.

But Philippine lawmakers want to drag sabong clucking and slashing into the digital age. Since the streaming of bouts over the web for betting purposes (e-sabong) already widely exists, a new measure seeks to tax it and create transparency around it.

“While the government seeks new revenue streams to fund its COVID-19 priorities, this bill responds to this government need by imposing new national government taxes on activities that already exist and will undoubtedly continue to exist as digital technologies grow more sophisticated, but are not being imposed such taxes,” said Joey Salceda, chairman of the House Ways and Means Committee and a sponsor of the bill.

Billion-Dollar Industry

The Philippine cockfighting industry is believed to be worth just over US$1 billion per year, according to the country’s Games and Amusement Board. Meanwhile, e-sabong is around a decade old, but has exploded in popularity because of the coronavirus pandemic.

Cockfighting as a live spectator sport is currently banned as part of government measures to combat the spread of the virus.

Cockfighting: ‘Painless’ Revenue Stream

Salceda acknowledged that e-sabong betting has existed in a gray area of the law, which his bill seeks to rectify. It seeks to impose a 5 percent tax on the gross revenues of off-site betting activities on locally licensed matches.

The measure would also allow the Bureau of Internal Revenue (BIR) to oversee and inspect totalizators and other gambling devices used to verify tax assessment. Meanwhile, local government units will maintain full authority to license and tax the bouts separately.

“The principle is simple. The industry used to be in a gray area. Now, we can shed light on it. The industry used to be untaxed. Now, we will tax it. And, as a non-essential economic activity, this proposal will be one of the few rare opportunities to create a painless revenue stream for our economic recovery,” Salceda said.