.svg)
The Philippines’ primary gambling regulator has attributed a surge in interest in online gambling licensing and foreign-facing B2B service provision to exiting the Financial Action Task Force (FATF) money laundering grey list.
PAGCOR chairman and CEO Alejandro Tengco told Vixio GamblingCompliance on Tuesday (March 18) that within a week of the FATF’s February decision, eight companies — four Philippine interests and four established foreign operators — sought application information despite an ongoing moratorium on domestic market licensing.
Speaking on the sidelines of the ASEAN Gaming Summit in Manila, Tengco said this spike in interest reflects new industry confidence in the market now that the Philippines is off the FATF list of jurisdictions under enhanced monitoring for money laundering and terrorism financing risk.
The domestic online licensing moratorium remains in place, Tengco said, to keep a rapidly growing, 155bn peso ($2.7bn) market in balance. But he hinted that the moratorium could be lifted before long.
“All of a sudden, this could go out of control if we do not properly regulate. That’s the reason why we wanted to implement the moratorium.
“I did mention to them [the prospective licensees] that we’re in a moratorium, we’re currently studying the situation, and we’ll take it from there.”
Tengco told the summit in his keynote speech that the FATF list withdrawal also prompted interest in the “Special Class of Business Process Outsourcing” (SCBPO) programme, whose licensees currently retain some 7,000 staff.
The SCBPO licence is the only surviving category of foreign-facing online gambling commerce following Philippine President Ferdinand Marcos Jr.’s banning last year of foreign-facing online interests (POGOs).
Tengco said the near halving of regulator fees for domestic online gambling operations will continue to serve as a carrot for “many unregistered” companies to join the regulated market, and that it is a “matter of time” before regulated interests dominate the market.
The unregulated companies “realise now that [in the Philippines] they are at par with other legitimate and known jurisdictions, so what’s the point playing cat and mouse with PAGCOR?”, Tengco said.
“I honestly believe the number of unregistered online [operations] will dwindle, because the environment is not conducive to them anymore.”
However, Philippine online gambling market data generated by the AI-boosted data crunching service Blask suggests that a little over half of the domestic online market is claimed by illegal operators, raising the question of whether lower regulator fees will be enough to sway leading disruptors such as PHDream and ph365.
Tengco said PAGCOR remains limited in its enforcement powers and must work with other agencies if punitive action toward domestic online gambling companies is necessary.
“PAGCOR does not have any police power. That being the case, we cannot directly go after them. The best thing we can do is report them to the authorities,” he said.
The prospects of a crackdown on unregulated online gambling companies and payment company collaborators therefore seem limited in the short term given the deploying of police and investigative resources to the wider fight against residue illegal POGO operations.
The latter have splintered and spread across the Philippines with thousands of mostly Chinese staff in tow, and continue to dominate headlines and congressional committee hearings.
However, anti-gambling forces in Congress have begun to call for a review of the domestic online industry, with Senate President Francis Escudero last week calling for a “financial and social audit” of domestic operators every bit as thorough as the scrutiny placed on POGOs.
