The Philippines and China have been at odds over the operation of Philippine offshore gaming operators (POGOs). While China has urged the Philippines to shut down POGOs due to concerns such as money laundering and human trafficking, the decision remains undecided under the presidency of Ferdinand “Bongbong” Marcos.
The Struggle to Prevent Offshore Betting:
1.1 President Xi Jinping’s campaign against gambling: President Xi has been actively targeting gambling and illegal capital flight, making it challenging for the Philippines to comply with China’s demands. Suggestions have been made to require POGOs to block access from China, but such measures are not foolproof.
1.2 Whac-A-Mole game: Blocking access to websites is akin to playing Whac-A-Mole, as new methods to circumvent restrictions emerge whenever one is implemented. Some POGOs intentionally cater to Chinese bettors, making it even more difficult to prevent betting from China.
The Consequences of Enabling Offshore Betting:
2.1 Impact on Chinese tourists: Chinese tourists accounted for a significant portion of pre-pandemic arrivals in the Philippines. Continued offshore betting jeopardizes the return of Chinese tourists, potentially harming the tourism industry.
2.2 Harmful impacts of the POGO industry: Serial Senate hearings have shed light on the negative aspects associated with POGOs, including human trafficking, money laundering, and prostitution. The sector’s revenue has also fallen significantly, casting doubt on the previously projected financial benefits.
Strategies for Evading Restrictions:
3.1 Utilizing farmer accounts: Chinese authorities have removed gaming operator fronts from popular payment channels. In response, offshore operators have turned to “farmer accounts” that involve recruiting individuals to open accounts and accepting payments from customers inside China.
3.2 Marketing efforts and the use of social networks: POGOs employ marketing agents, many of whom come from mainland China, to entice Chinese customers to participate in offshore betting. Agents must navigate China’s unique online environment and utilize platforms such as WeChat and Weibo for effective promotion.
The Licensing and Regulatory Landscape:
4.1 Distinction between licensed and unlicensed POGOs: While Philippine officials attempt to differentiate between legal and illegal POGOs based on licensing, the business practices of licensed and unlicensed operators often remain indistinguishable.
4.2 Attractiveness of the Philippine licensing regime: The Philippines’ geographic proximity to China and other Southeast Asian countries, coupled with its regulatory framework, has made it an attractive location for offshore betting operators. A Philippine license provides validation and ease of operation for these operators.
Balancing Legal Perspectives:
5.1 The relative legality of online wagering: Philippine regulators and operators view online wagering as a relative concept, with different countries approaching it differently. The responsibility to regulate and enforce online betting activities lies with the governments that wish to prohibit or regulate such activities.
5.2 Differentiating authorized entities from unauthorized ones: While online wagers by individuals may not be legally punishable in many countries, promoting and accepting wagers by unauthorized entities is considered illegal.
The Future of POGOs:
6.1 Evading taxes and operating without licenses: Increases in fees and taxes have led some POGOs to evade taxes and operate without proper licenses. This trend contrasts with the initial goal of creating a regulated offshore gaming industry in the Philippines.
6.2 Risking Chinese tourists and blacklisting: China’s reopening and the resumption of mainland Chinese tourism pose opportunities for POGOs to find.