Philippine gaming regulatory body, PAGCOR, announces substantial cuts in rates and fees for local operators.
Updated Version
By: ** Buddy Smith 09/11/2024 11:06 World Photo by Wikimedia Commons, CC by-SA 4.0
The Lowdown
- Fees Decrease: PAGCOR slashes fees for IR operators offering online gambling activities from 35% to 25%
- Investment Attraction: The move aims to lure investments and hold onto them
- Legal Transition: The move could induce black market operators to dip their toes in legal waters
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The move by PAGCOR to cut fees for integrated resort (IR) operators engaged in online gambling activities brings noteworthy consequences for the Philippine gaming industry and its regulatory scenario.
Encouraging Online Gaming Boom
PAGCOR decreases the fee rates for online gambling operators from 35% to 30% of gross gaming revenue (GGR) starting early next year. Part of a broader approach to combat illicit gambling and persuade unregistered operators to step into the regulated market.
By making legal online gaming ventures more financially appealing, PAGCOR seeks to promote compliance and transparency in a sector currently accounting for 56% of total gaming revenue in Q1 2025.
Driving Up Revenue and Stability
Despite the fee reduction, PAGCOR reported a 11.2% year-on-year revenue boost in Q1 2025, primarily due to online gaming's growth. The fee cut encourages more operators to join and pool revenues under regulated systems rather than illegal channels.
Helping Post-POGO Ban Transition
The fee cut happens in the wake of the 2024 ban on Philippine Offshore Gaming Operators (POGOs) due to their involvement in illicit activities. The ban created a gap, but it also provided an opportunity for legit operators to widen their digital presence without unfair competition from unregulated entities.
Lower fees help licensed operators seize this chance by lessening their costs and spurring investment in regulated digital gaming endeavors. This mirrors the government and PAGCOR's goal of fostering a more streamlined, transparent, and socially responsible gaming environment.
Advancing Social and Regulatory Aims
Pushing operators to the legal, licensed environment via more affordable fee structures further fosters PAGCOR's main objectives: reducing illegal gambling, implementing player protection measures, and generating government revenue for social development.
Sports betting and slot machines could see a surge in the Philippine gaming industry with the recent fee reductions by PAGCOR, making legal online gambling ventures more financially appealing to operators. This move could lead black market sports bettors and slot machine users to enter the regulated market, helping transition the industry towards transparency and compliance.
The reduced fees also create a competitive edge for licensed operators, allowing them to invest more in free spins, jackpot prizes, and other enticing financial benefits to attract and retain customers in an increasingly saturated market.
