The Philippines’ gaming industry continues to demonstrate resilience and growth, driven primarily by the surging E-Games sector, despite a notable decline in the performance of traditional casinos. According to recent data released by the Philippine Amusement and Gaming Corporation (PAGCOR), the overall Gross Gaming Revenue (GGR) for the industry reached Php89.23 billion (US$1.56 billion) in the second quarter of 2024, marking a significant 32.3% year-on-year increase. This figure also reflects a 9.2% quarter-on-quarter growth, underscoring the dynamic nature of the industry as it navigates both opportunities and challenges.
Steady Growth in the Face of Challenges
While the industry as a whole has seen robust growth, the performance of licensed casinos paints a more subdued picture. The combined gross gaming revenues of the Philippines’ licensed casinos fell by 4.3% year-on-year to Php49.48 billion (US$864 million) during the second quarter of 2024. This decline was not just a year-on-year phenomenon but also reflected a slight dip from the Php49.68 billion (US$867 million) recorded in the first quarter of the year.
The figures reveal that while casinos remain a significant part of the gaming industry, they are facing challenges that have led to a decrease in their contribution to overall revenues. This downturn can be attributed to various factors, including market saturation, changing consumer preferences, and increased competition from other gaming formats, particularly the booming E-Games sector.
The E-Games Sector: A Rising Star
The E-Games sector has emerged as the standout performer in the Philippine gaming industry, delivering unprecedented growth figures. In Q2 2024, the E-Games sector generated Php30.85 billion (US$539 million) in revenue, representing a staggering 525% increase from the Php4.93 billion (US$86.1 million) recorded in the same period the previous year. This extraordinary growth rate has positioned E-Games as the fastest-growing segment within the industry, outpacing traditional gaming formats by a wide margin.
PAGCOR Chairman and CEO Alejandro H. Tengco emphasized the significance of this growth, stating that the E-Games sector has consistently surpassed targets and has become the local gaming industry’s best performer in terms of growth. Tengco noted that this sector’s impressive performance is not only filling the gap left by declining casino revenues but also helping to offset any potential shortfall that might arise from the anticipated ban on offshore gaming operations, also known as POGOs, by the end of the year.
PAGCOR-Operated Casinos and Bingo Operations
In contrast to the E-Games sector, PAGCOR-operated casinos under the Casino Filipino brand experienced a notable decline in performance during the second quarter of 2024. These casinos brought in Php4.20 billion (US$73.3 million), which is 14.8% lower than the Php4.93 billion (US$86.1 million) recorded in Q2 2023 and 10.41% lower compared to the previous quarter’s Php4.69 billion (US$81.9 million).
Similarly, Bingo operations also saw a decline in GGR, contributing Php4.69 billion (US$81.9 million) in the second quarter. This figure is lower than both the Php5.85 billion (US$102 million) recorded in Q2 2023 and the Php4.81 billion (US$84.0 million) generated in Q1 2024. These declines highlight the challenges faced by traditional gaming formats in maintaining their market share amid the rapid expansion of digital and electronic gaming options.
The Impact of the President’s Order on Offshore Gaming Operations
The Philippine gaming industry is currently navigating a significant regulatory change with the impending ban on offshore gaming operations, commonly referred to as POGOs. This policy shift, set to take effect by the end of the year, is expected to have a considerable impact on the industry, particularly on revenue streams that have historically relied on offshore gaming.
However, the remarkable growth of the E-Games sector is poised to mitigate some of the potential revenue losses resulting from the POGO ban. Chairman Tengco expressed confidence that the continued expansion of the E-Games sector will help cover any shortfall, ensuring that the overall industry remains on a growth trajectory.
The Philippines’ gaming industry is currently at a crossroads, with traditional gaming formats facing challenges while digital and electronic gaming sectors are experiencing unprecedented growth. The industry’s overall performance in the second quarter of 2024, with a 32.3% year-on-year increase in GGR, underscores its resilience and adaptability in the face of changing market dynamics and regulatory landscapes.