POGOs Don’t Offer Gambling to China: PAGCOR Responds to Beijing Threat

Posted on: August 26, 2019, 10:02h. 

Last updated on: August 27, 2019, 07:01h.

None of the Philippines’ licensed online gaming operators (POGOs) are Chinese-owned companies, nor do they target gamblers within China. At least, that’s the official line from Victor Padilla, head of offshore gaming for Philippine gambling regulator PAGCOR.

The Chinese government has said that, in some cases, its citizens are forced to work in the POGOs in conditions “akin to modern slavery,” allegations dismissed by PAGCOR official Victor Padilla this week. (Image: South China Morning Post)

Padilla was addressing concerns in Philippine Congress that Beijing — increasingly troubled by the threat of capital flight and money laundering — has finally lost its cool with the country’s POGO industry.

Earlier this month, the Chinese Embassy in Manila issued a strongly worded denunciation of the POGOs, urging Philippine authorities to “take concrete and effective measures to prevent and punish” operators that accept customers located in China.

It was the first time that Beijing had directly addressed the Philippine online gambling industry, which has thrived since it became licensed and regulated by PAGCOR in 2016.

Then, last week, Beijing demanded the Philippines “end all online gambling.”

Gambling is illegal in China with the exception of state-run lotteries. It is also illegal for the POGOs to target Filipinos, and at least nominally illegal for them to offer gambling to citizens of other countries where gambling is prohibited, which, according Padilla, doesn’t happen.

Targeting Ex-Pats?

Explaining the estimated 100,000 Chinese nationals who have come to work within the POGO industry over the past three years to serve its need for Mandarin speakers, Padilla suggested perhaps the industry was targeting Chinese ex-pats.

“We are sure that a lot of players are Chinese, because we all know that there are a lot of Chinese people all over the world,” he said.

I think, in their culture, they like gambling. But it’s not automatic that if the players are Chinese, they are all from China. The players are mostly Chinese. But we are not sure if, in fact, they are all from China,” he explained.

Padilla also dismissed complaints by the Chinese Embassy that, in some cases, its citizens have been lured to the Philippines to work illegally on tourist visas and subjected to extortion, confinement, and physical abuse in conditions “akin to modern slavery.”

“They claim that they are working like slaves. They were promised five meals a day, but they are provided with only three meals,” he said. “Despite their grievances, they are not returning to their homeland, apparently, because there are apparently no jobs for them there.”

Duterte to Meet Xi

But PAGCOR was sufficiently concerned about the noises coming from Beijing to announce last week that no new licenses would be awarded until the spat had been resolved.

Finance Secretary Carlos Dominguez III said in a statement last week that President Rodrigo Duterte is set to meet his Chinese counterpart, President Xi Jinping, later this month, and cross-border gambling will be at the top of the agenda.

The strong-arm President Duterte came to power throwing punches at the Philippines’ homegrown online gaming industry. But now that it only targets foreigners, his administration is happy to let the money roll in.

And it’s big business for the Philippines. The government collected $140 million in annual licensing fees alone last year, and has said it expects to reap a further $117 million in taxes.

Padilla said there are currently 60 licensed POGOs, of which 48 are active.