The Philippine Amusement and Gaming Corporation (PAGCOR) is set to reduce gross gaming revenue (GGR) rates and license fees for both online and on-site betting platforms by 2025. This move, as announced by PAGCOR Chair and CEO Alejandro Tengco, is part of a broader strategy to align the Philippines’ gaming industry with global standards, attract more investors, and combat illegal gambling operations.
Key Fee Reductions for On-Site and Online Venues
According to Tengco, the new regulations will see license fees for traditional land-based gaming venues lowered to 30%, while integrated resorts that also offer online gaming services will experience a reduction in fees by 25%. These changes reflect PAGCOR’s desire to remain competitive on the international stage, by bringing fees in line with those in other key gaming markets around the world.
“By lowering our license fees, to be at par with the global industry standards, we hope to attract and keep more investors in place,” Tengco explained during his speech at the Inside Asian Gaming Academy Summit, held at the Hilton Manila in Pasay City.
Tengco emphasized that the policy shift aims to provide relief to licensed operators, enabling them to sustain operations and thrive despite increasing competition from unregulated markets. The fee adjustments, he believes, will incentivize current and potential gaming operators to expand their investments within the Philippines.
Tackling the Grey Market and Illegal Operations
The move to cut fees isn’t purely economic. Tengco pointed out that the rise of the grey market, or unregulated gambling operations, is a major concern. Illegal gaming platforms have been able to offer more attractive odds and lower costs, pushing licensed operators to the brink.
“The observation I made upon my assumption in the office was that the grey market or the underground market was doing so well, way, way better than PAGCOR. And licensees were closing shops, primarily because they could not compete anymore with the grey market,” Tengco noted.
The reduced fees are expected to curb the influence of illegal gambling operators, providing licensed businesses with the opportunity to compete more effectively by lowering their operational costs. Tengco is hopeful that these efforts will not only help PAGCOR maintain its market share but also reduce illegal activity in the local gaming sector.
PAGCOR’s Ambitious GGR Targets for 2025
In addition to the fee reductions, PAGCOR is also targeting an industry GGR of PHP 335 billion (approximately $5.96 billion) by the end of 2025. This ambitious goal comes on the back of sustained growth in the country’s gaming industry, which has shown strong performance in recent years, particularly in the e-gaming sector.
The latest quarterly financial results from PAGCOR support Tengco’s optimism. For the second quarter of 2024, gross gaming revenue reached PHP 89.23 billion (US$1.56 billion), marking a significant 32.3% increase compared to the same period in 2023. Furthermore, the figure represents a 9.21% rise from the first-quarter revenue of PHP 81.70 billion in 2024.
The surge in revenue has been largely attributed to the e-gaming sector, which experienced a staggering 525% growth from PHP 4.93 billion year-on-year. This upward trend is indicative of the increasing popularity of digital gaming platforms in the Philippines, a trend that PAGCOR aims to support with its new regulations.
The Growth of E-Gaming in the Philippines
The e-gaming sector has been a driving force behind the country’s gaming revenue growth. E-gaming, which includes various forms of online gambling such as virtual casinos, sports betting, and other electronic games, has gained substantial traction as technology continues to advance and more players transition from traditional land-based gaming to online platforms.
PAGCOR’s support for the e-gaming sector through the reduction of fees for integrated resorts offering online services is a calculated move to foster further growth. As the sector continues to expand, the regulator hopes to attract more international players and investments in this space, helping to secure the Philippines’ position as a major hub for online gaming in Asia.
PAGCOR’s Regulatory Adjustments and Long-Term Impact
The planned reductions in GGR rates and licensing fees are part of a larger effort to adjust the regulatory framework that governs the Philippine gaming industry. By aligning more closely with international standards, PAGCOR is positioning itself to foster sustainable growth, not only for traditional casinos but also for online platforms, which have seen exponential growth in recent years.
These changes come at a critical time for the gaming industry, which, like many sectors, faced significant challenges during the COVID-19 pandemic. Despite these obstacles, the industry has shown remarkable resilience, with operators adapting to the changing landscape by expanding their online offerings.
Challenges in the Industry: Competition and Regulation
While the reduction in fees is expected to yield positive outcomes, the gaming industry in the Philippines continues to face challenges. The ongoing presence of illegal gambling operations remains a significant threat, as unlicensed platforms often offer more attractive options for consumers due to their lower operational costs.
PAGCOR’s efforts to tackle these issues through fee reductions and more aggressive regulatory oversight will play a key role in shaping the future of the industry. However, success will ultimately depend on the cooperation of licensed operators, the effectiveness of law enforcement against illegal operators, and the ability of legal venues to offer competitive services and experiences.
In addition, the global gaming industry is highly competitive, with several jurisdictions across Asia competing for the same pool of players and investors. Macau, Singapore, and Vietnam are just a few examples of countries with well-established gaming industries, and PAGCOR’s new policies are aimed at making the Philippines a more attractive destination for both operators and tourists.
Future Outlook: Maintaining Growth and Industry Competitiveness
Looking ahead, PAGCOR’s strategy to lower fees and promote the legal gaming market appears poised for success. By addressing the needs of licensed operators and tackling the grey market, PAGCOR hopes to create a more robust, regulated gaming industry that can compete both locally and internationally.
The gaming industry’s resilience and adaptability, especially in the face of global challenges, suggests that PAGCOR’s goals are within reach. The combination of lowering operating costs, encouraging investment, and tightening regulations on illegal gambling creates an environment that is conducive to sustainable growth.
Tengco’s vision of a PHP 335 billion GGR target by 2025 reflects both confidence in the country’s gaming sector and a clear understanding of the challenges ahead. Should these targets be met, the Philippines would further solidify its position as a key player in the global gaming industry, providing significant contributions to the national economy.
The reduction of GGR rates and license fees by PAGCOR marks a pivotal moment for the Philippine gaming industry. With an ambitious goal of reaching PHP 335 billion in GGR by 2025, the new regulations are designed to foster growth, attract investment, and curb illegal operations. As the gaming landscape continues to evolve, both in the Philippines and globally, PAGCOR’s strategic moves will likely play a crucial role in determining the future success and competitiveness of the country’s gaming industry.
The e-gaming sector, in particular, stands out as a growth area, with its significant contribution to recent revenue increases. As PAGCOR positions itself to capitalize on this momentum, the reduction in fees for integrated resorts with online gaming services will be key to maintaining this upward trajectory.
Ultimately, the success of these initiatives will depend on PAGCOR’s ability to balance the need for regulation with the desire to create a competitive, investor-friendly market. In doing so, PAGCOR aims to ensure that the Philippine gaming industry not only meets its financial targets but also remains a leader in the Asian and global markets.