Philippines Will Not Comply With China’s Request to Ban Online Gambling

  • PAGCOR says none of their licensed operators are Chinese-owned or target Chinese residents
  • China concerned about criminals embezzling funds through the Philippines gambling sector
  • Philippine gambling regulator has temporarily suspended the issuance of new licenses
  • Huge influx of Chinese workers in the Philippines since issuing online gambling licenses in 2016
China and Philippines flags waving in the sky against dark clouds.
The Philippines has strongly rejected China’s demand to ban all forms of online gambling. [Image: Shutterstock]

Online gambling to continue

The Philippines Amusement and Gaming Corporation (PAGCOR) has stated that the country will not be complying with China’s demand to ban all offshore online gambling operations in the country.

The head of offshore gambling in PAGCOR is Victor Padilla. Speaking about the statement recently issued by the Chinese Embassy, he said that “none of the companies holding PAGCOR licenses are Chinese-owned.” Padilla also refuted claims that these operators are targeting Chinese gamblers.

none of the companies holding PAGCOR licenses are Chinese-owned

There is a gambling ban in place in mainland China, except for state-run lotteries. The Chinese territory of Macau does allow gambling. It has surpassed Las Vegas in the United States to become the world’s biggest gambling destination in recent years.

Chinese authorities were hoping that the Philippines would consider banning online gambling in an attempt to help cut down on cross-border gambling. According to Chinese authorities, criminals are using this as a way to recruit workers illegally and to embezzle funds. 

Initially, they called upon PAGCOR to “take concrete and effective measures to prevent and punish” any operators targeting customers in China.

This was the first time Chinese authorities officially and directly spoke about the online gambling industry in the Philippines. Approximately one week later, Beijing called upon the Philippines to “end all online gambling.”

Big business

PAGCOR has imposed a temporary suspension on new online gambling operators receiving a license. Other countries in the region have also been cracking down on online gambling. For example, Cambodia recently banned online gambling.

Philippines President Rodrigo Duterte will be meeting Chinese President Xi Jinping in the coming weeks. Cross-border gambling will be one of the main topics on the agenda. 

Duterte was previously strongly against his country’s gambling industry. However, he has eased his stance as of late, particularly as the industry now only targets foreigners and not Filipinos. 

The gambling industry is a big revenue driver for the Philippines. In 2018, the annual license fees were $140m, with taxes in the region of $117m. At the moment, there are 60 online gambling operators with licenses, 48 of which are currently active.

Chinese influence in the Philippines

Around the time when the Philippines began issuing online gaming licenses in 2016, the country experienced a significant influx of Chinese people.

The number of Chinese casino workers in the Philippines quadrupled in a few short years following this move. It is believed that this figure now stands at around 100,000. According to the Chinese embassy in Manila, a lot of money was coming into the Philippines from China through underground banking and money laundering. 

There have been allegations that a substantial amount of illegal Chinese workers in the Philippines gambling industry have not been paying their taxes. This led to a crackdown by the Bureau of Internal Revenue. As of July 2019, this body withholds taxes from foreign workers.

There are concerns that attempts by authorities in the Philippines to move Chinese casino workers to self-contained communities may

infringe on the basic legal rights of the Chinese citizens concerned.”

The reason for the attempts to move Chinese nationals is to lower the conflict between Filipinos and the Chinese workers according to Jose Tria, the vice president for offshore gaming at PAGCOR. 

The Chinese embassy believes these issues result from the gambling industry in the Philippines. This is because: “in many cases, the employers of Philippine casinos, POGOs (Philippine offshore gaming operators) and other forms of gambling entities do not apply necessary legal work permits for their Chinese employees.”