Philippines puts the crack down on hundreds of POGOs

The Philippines is intensifying its efforts to crack down on illegal gambling but in doing so, it may suspend one of its main economic stays – POGOs. Announcing the news on Monday, Reuters reported that the country has decided to halt operations at the 175 or so offshore gambling firms in the jurisdiction and deport 40,000 Chinese workers back home. This could be seen as an attempt to clamp down on illegal gambling, but it could also be tied to increasing pressure from mainland China.

China has been long asking partners in the region, including the Philippines and Cambodia, to act firmly against POGOs and other gambling operations which may be exploiting Chinese nationals. Another reason is that these operations are often believed to target Chinese citizens as their main customers. POGOs’ operations have been gradually petering out over the past years.

Once upon a time, the POGO industry would offer jobs to as many as 300,000 Chinese workers, but higher taxes and the pandemic threw a spanner in the works and saw much of the organic demand die down on its own. Commenting on this development, Filipino justice ministry spokesperson Jose Dominic Clevano said:

"The crackdown was triggered by reports of murder, kidnapping and other crimes committed by Chinese nationals against fellow Chinese nationals."

However, the Philippines is not acting pell-mell and is rather focusing on companies that have been operating without the necessary paperwork or have been suspected of various crimes. Often, taxes were late or not coming from some operations even though they had been paying fees. In 2020, POGOs generated $122.21m in fees they paid to the government, making them one of the most reliable sources of income.

However, the Philippines has had some tough choices to make. Previously, the country allowed e-sabong, a sort of virtual betting on cockfights. Mounting crime, kidnappings, and corruption linked to the sector, though, forced the hand of former Filipino president Rodrigo Duterte who deemed the activity to be too dangerous to society and ordered it shut.

Now, more POGOs are coming under similar fire. The Philippines acknowledges that it needs to keep the money from POGOs and other gambling businesses coming in, but it has also acknowledged that letting crime thrive in these segments is overall going to suppress its ability to generate reliable and sustainable revenue. POGO-related crimes remain a hot topic for the government which is determined to clean up its act.

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