Philippines Issues Order On POGO Ban, Confusion Remains

The Philippine President has issued a long-promised order prohibiting foreign-facing online gambling operators (POGOs) and services, but confusion remains over the status of Cagayan Economic Zone Authority (CEZA) licensees and B2B operations.

Executive Order No. 74, which orders “offshore gaming, internet gaming, and other offshore gaming operations in the Philippines” to cease by December 31, was signed on Tuesday (November 5) and announced on Friday afternoon.

President Ferdinand Marcos Jr.'s seven-page order covers existing POGO licensees (formally known as Internet Gaming Licensees) under the jurisdiction of gambling regulator PAGCOR, as well as new licence applicants and licence renewals under PAGCOR and, for good measure, all unregulated gambling operations.

But the key question since Marcos announced the ban in July has been whether he would allow B2B service providers a window to continue operating, perhaps targeting B2B and B2C operators in foreign jurisdictions, and whether POGO-like operations under CEZA’s authority can continue.

Reflecting years of POGO-linked scandals that generated violent crime, high-level corruption and tensions with China, the order’s strong wording invokes “national security, public safety, and the maintenance of public order, as well as to uphold the rule of law”.

But there is no explicit reference to CEZA operations, with the ban on online gambling companies in special economic zones limited to those “subject to the supervision and/or jurisdiction of PAGCOR”, which does not include the Cagayan authority.

Anti-gambling senator Risa Hontiveros on Saturday pointed out this and other possible loopholes in Executive Order No. 74, telling reporters that “there are still things in the [order] that are unclear”.

Another example is an exemption from the definition of “offshore gaming operations/services” for land-based casinos or “integrated resorts with junket agreements”, leading Hontiveros to ask if POGO licensees could relocate to these facilities.

This exemption seems to have been worded to avoid implicating domestic-facing online gambling products, which are yoked to land-based licensees, but the implications remain unclear.

Further, the status of “special class business process outsourcing [BPO]” companies that service POGOs appears to fall under a banned category of “gaming agents and accredited service providers providing ancillary services” to POGOs.

But media reports over the weekend continued to point to this category as a potential third loophole allowing companies to stay in the market.

Hontiveros said the confusion surrounding the order reinforces the need for Congress to pass current draft legislation against foreign-facing online gambling operations in all its forms.

“What this only underscores is that we need a clear law to move forward with a meaningful, clear, unequivocal, and comprehensive ban,” she said.

As if anticipating doubt or resistance to the executive order, the Office of the President issued a memorandum personally to CEZA chief executive Katrina Ponce Enrile on Tuesday.

The memo instructed her to “adhere to the directive” that Marcos issued in July at his state of the nation address to Congress.

But the terse memo does not address potential loopholes in the executive order or confirm that the ban applies to CEZA’s POGO-like online gambling licensees.

Marcos’ executive order includes the CEZA boss in a technical working group on anti-illegal offshore gaming operations chaired by the Presidential Anti-Organised Crime Commission.

Unlike PAGCOR, however, the CEZA authorities have not made a show of closing down online operations, possibly anticipating that its presidential connections could carve out an exemption for the northern Luzon economic zone.

Helming the largely autonomous CEZA since mid-2023, Katrina Ponce Enrile is the daughter of 100-year-old Juan Ponce Enrile, a former Senate president and founder of the Cagayan Special Economic Zone, who currently serves as chief legal counsel to President Marcos.

In August, Juan Ponce Enrile told reporters that POGOs should be “kicked out” of the Philippines because they are a “money-laundering operation”.

But he did not say the same should apply to identical online gambling operations in the Cagayan zone, which are not formally defined as POGOs.

Both of the Enriles have defended CEZA’s autonomy, including its separate jurisdiction over foreign-facing online gambling, a legacy from the years when the Cagayan Special Economic Zone was the regulatory centre of the predominantly Manila-based online gambling industry, boasting well over 100 licensees at its peak.

Katrina Ponce Enrile, meanwhile, savaged PAGCOR in 2023 for allegedly mishandling POGO policy and monitoring work since seizing regulation of most of the nation’s online gambling licensees from CEZA in 2016 and 2017.

The remainder of Executive Order No. 74 creates a second technical working group charged with re-employment of retrenched Filipino POGO workers and other economic recovery, calls for additional investigative work into illegal online gambling operations and recovery of delinquent taxes, and enjoins local government to impede illegal operations and the private sector to waive entitlements in terminated contracts relating to POGO activity.