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The Philippine gambling regulator has warned that a new congressional bill that would ban foreign-facing online gambling operations would compel affected companies to “go underground” and “cause bigger problems” for the nation.
PAGCOR chairman and CEO Alejandro Tengco said in a statement on Wednesday (June 12) that if lawmakers succeed in shutting down the regulated online gambling industry, then consolidated tax revenue will fall and illegal supply will proliferate.
Tengco’s warning followed the filing on Tuesday of a House of Representatives bill that would ban and criminalise foreign-facing online gambling operations and revoke existing online gambling licenses.
The bill reflects expanding disquiet in the lower house after months of Senate hostility toward the industry, including numerous committee hearings probing the sector and Senate bills that would shut down Internet Gaming Licensees (IGLs), formerly known as POGOs.
Tengco said the solution to industry instability will arrive “only through intensified law enforcement and the cooperation of all sectors”, given that “the real problem are the syndicates masquerading as POGOs”.
But if a ban proceeds, “it would become harder for us to monitor [gambling companies], and the number of illegal operators would grow and pose a bigger headache to our law enforcement authorities”, Tengco said.
In addition, “the government will lose potential revenues of more than 20bn pesos [$340m] annually, without any guarantee that illegal activities will stop”.
“Worse, they could join those who are engaged in illegal activities like scamming, hacking and other cybercrimes, which would cause bigger problems to us.”
House Bill 10525 is not the first opposition lower house bill to seek a ban on IGLs, but its timing is more impactful on the back of last week’s raid on another online gambling compound linked to cyber-scamming and the fatal torture and other mistreatment of foreign and local workers.
Bill co-author France Castro on Tuesday decried “unimaginable corruption” flowing from the industry and its “social menace”, after years of scandals and reports of violence and kidnapping, including the rescue of thousands of workers from premises linked to current and former PAGCOR licensees.
Backing the bill, Representative Robert Ace Barbers called on Philippine President Ferdinand Marcos Jr, who has authority over PAGCOR, to shut down the industry.
“POGOs are banned in China, yet we continue to give them safe haven and sanctuary in our country,” Barbers said in a statement.
“Worse, criminal syndicates only use these POGOs as fronts for their gruesome and illegal activities.
“There is no redeeming value in POGOs. We should not waste a minute more in closing them, totally and completely. Like a gangrenous toe, we should cut it from our body before it kills us,” he said.
“Let us not allow our gains as a free republic to be destroyed by an alien culture of crime and gambling. If we love our country, we should break free from the bondage that is POGO.”
Many government lawmakers remain committed to PAGCOR’s supportive position for the industry, with House Ways and Means Committee chair and POGO tax champion Joey Salceda preferring law enforcement to creating a new law.
“You phase out the bad and mediocre licensees. You don’t phase the whole industry out. You enforce the law,” he said.
Although opponents of online gambling have yet to reach a critical mass that would impact the Congress status quo, fears of national security fallout from online gambling operations continue to fill the pages of Philippine newspapers.
A military spokeswoman announced on Wednesday that the Armed Forces of the Philippines are cooperating with a Presidential Anti-Organised Crime Commission (PAOCC) probe into purported Chinese People’s Liberation Army uniforms recovered during last week’s raid on the property in Porac, Pampanga Province, near Clark Freeport.
Colonel Francel Padilla added, however, that the uniforms were likely “props” used to deceive and intimidate people on site.
Even so, fears of Chinese government weaponisation of online gambling operations continue to be stoked by influential voices, including anti-gambling Senator Risa Hontiveros, who has alleged that an online gambling and cyber-scamming property raided in March was engaged in espionage against the Philippines.
On Tuesday, Philippine media revisited fears of POGO hubs being used by the Chinese military to compromise national security, particularly those that are located near military infrastructure or redeveloping US military bases.
Chester Cabalza, a defence studies academic and founder of the International Development and Security Cooperation think tank, warned of military perceptions that POGOs could serve as a Trojan horse for “unrestricted warfare” in the event of multilateral hostilities.
“The key strategic locations of POGOs are also sensitive to our national security since it becomes a perimeter for espionage,” he told the Philippine Inquirer.
Meanwhile, the Philippines’ apex court has announced it will investigate if online gambling hubs are exerting improper influence on the court system.
Supreme Court spokesperson Camille Ting said on Friday that the court will probe speculative comments by Senator Sherwin Gatchalian that court staff are leaking warrant information on properties set to be raided.
Gatchalian’s accusation followed a complaint by PAOCC undersecretary Gilbert Cruz on Thursday that the raid in Porac was undermined by a “leak”, resulting in fewer arrests and the escape of suspected managers of the operation.
