In brief: The Philippines is dismantling its controversial offshore gaming industry catering to overseas gamblers. President Ferdinand “Bongbong” Marcos Jr. directed regulators this week to shut down all “POGO” websites and operations by year’s end. The crackdown follows mounting concerns that these online casinos have become fronts for criminal rackets such as human trafficking, fraud, and potential Chinese espionage.
POGOs, short for Philippine Offshore Gaming Operators, are companies licensed by the government to run online gambling sites for overseas players, especially in mainland China where such activities are illegal. While the POGO business has generated billions in tax revenue, it’s also been a hotbed of illicit activity.
“Disguising as legitimate entities, their operations have ventured into illicit areas furthest from gaming such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder,” Marcos said during his annual State of the Nation address this week. He wasn’t exaggerating either.
An ongoing Senate investigation has uncovered some very questionable activities. It centers on a mayor named Alice Guo who allegedly faked being a Filipino citizen to run an illegal POGO empire, complete with human detention cells and over 800 victims rescued from her scam compounds. Investigators claim Guo’s real name is Guo Huaping, and she’s a Chinese national.
I hereby instruct PAGCOR to wind down and cease the operations of POGOs by the end of the year.
– Bongbong Marcos (@bongbongmarcos) July 22, 2024
The POGOs have been a political hot potato for years, creating all sorts of economic and regulatory headaches alongside the sleaze factor. While only about 42 are currently officially licensed, it’s believed that over 400 are operating illegally.
At their peak a few years ago, POGOs directly employed well over 300,000 Chinese nationals in the Philippines alone. The clampdown in recent years has seen hundreds of POGO licenses revoked and arrests of many operators for tax evasion and hiring illegal foreign workers. Now, reports suggest that legal ones directly and indirectly employ around 23,000 foreigners along with 40,000 Filipinos.
China has been pressuring the Philippines to shut down the industry, which it views as illegal cross-border gambling targeting its citizens. Some analysts think Marcos’ move could ease tensions with Beijing over the South China Sea territorial disputes.
Eliminating the entire semi-legit, multi-billion dollar industry is a significant move that’ll have major economic impacts, including an estimated $400 million annual tax revenue hole. But officials say the social costs simply became too high. Planning Secretary Arsenio Balisacan shrugged off any losses, telling reporters that POGOs only contributed around 0.5% to GDP anyway.
The big question is what happens to all those POGO workers. President Marcos vowed that his Labor Department will assist those displaced in finding new jobs.
The move has been cheered by many as a victory against transnational online vice. The announcement itself drew a standing ovation in Congress. But others worry the shadier POGO elements will simply go fully underground, creating new illegal operators that are even harder to track and regulate.