PAGCOR Says Online Licensees Crime-Free, Warns Suppliers

February 6, 2024
Philippine gambling regulator PAGCOR has announced that “all the criminal activities” among foreign-facing online gambling licensees (POGOs) have been “weeded out”, while admitting industry service providers continue to supply illegal operators.

Philippine gambling regulator PAGCOR has announced that “all the criminal activities” among foreign-facing online gambling licensees (POGOs) have been “weeded out” while admitting industry service providers continue to supply illegal operators.

PAGCOR chairman and CEO Alejandro Tengco on Monday (February 5) told a panel at the World Regulatory Briefing (WRB), among two events that launched the ICE gambling conference, that some 70 percent of the regulator’s former stable of licensed online operators and service providers were engaged in illegal activity.

“Towards the middle of last year, we discovered that of close to 250 licensees and sub-licensees, most of them had already shifted to illegal activities,” Tengco said.

“And that made me realise that the industry had to be overhauled completely and that is when, together with the board of directors of PAGCOR, we did make a decision to put all licensees on a provisionary status.”

Tengco said the process of provisional licensing, which PAGCOR first announced in July, allowed the culling of non-compliant operators and service providers while vetting compliant and financially viable licensees.

“I would like to gladly report to all that we were able to [get] rid [of] about 70 percent from an initial 250 [licensees] … we’re going to about 70 licensees at the start of 2024,” he said. “We have weeded out all the criminal activities that happened.”

“The even better news is that we generated 5.2bn pesos [$93m] in revenue at the end of 2023, considering that we only had about 30 percent of the old number” of licensees.

“I am of the belief that by doing so we are able to make everyone aware that PAGCOR means business, and that by cleaning up the entire overseas gaming business we have shown to the world that we will not tolerate any criminal activities and that by re-issuing those close to 70 licensees, including [business process outsourcing, BPO] licences, we mean business.”

Tengco also called on service providers to desist from supplying online games to underground operators and warned of a regulatory response.

“One of the things that really has to be done is that the service providers, the gaming companies, should make sure that they do not supply or provide games to unlicensed companies,” he said.

“That for me is the way to go in order to kill the grey market in the Philippines.

“I’d like to encourage an appeal to the service providers not to support the illegal providers. We’re planning on now regulating the service providers for the online gaming” industry, he said.

The most recent licensee data from PAGCOR indicates that the re-application phase for POGOs is incomplete, with only seven regular POGO licences awarded and 44 licences bearing provisional status as of January 15.

Service provider, gaming agent and special BPO licences are also split between regular and provisional lists.

Tengco told the IAG Academy Summit in Manila in September that PAGCOR will also break with tradition and publish the URLs of gaming websites that its licensees are authorised to operate.

The regulator is yet to do so.

Another of PAGCOR’s key initiatives — the long-promised privatisation of its commercial gaming operations — remains on track, Tengco said on Monday.

Tengco said PAGCOR’s charter will need to be amended, and that the privatisation process will begin in late 2025.

However, the latest signs of resistance to the status quo in the PAGCOR empire emerged last Thursday when the government’s public corporation oversight committee blocked a plan by the regulator to retrench more than 700 employees at the Casino Filipino New Coast in Manila’s Malate district.

The Governance Commission for Government-Owned or Controlled Corporations (GCG) blocked the firings until redundancy plans are submitted and approved, the Philippine Inquirer Daily quoted Senator Raffy Tulfo as saying.

Tengco’s promotion and defence of PAGCOR’s licence rebooting initiative and other programs are in part a response to intense pressure on the regulator and the online gambling industry from anti-gambling senators and sceptical rival government departments, including audit, anti-money laundering and internal revenue organs.

In addition to regular reports of violent crime, corruption of public officials, and other unsavoury incidents related to the Philippine online gambling industry, the regulator has been embarrassed by a series of raids on scam centres that resulted in the freeing of thousands of Filipino and foreign workers. Some of the operations were affiliated with PAGCOR licensees.

Additional reporting by Joe Ewens in London.

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