PAGCOR Monthly Fees Cut in Half Because of POGO Struggles

  • Monthly regulatory fees from POGOs have fallen by about 80% since May
  • Only 32 of 60 POGOs have been able to resume operations and only at 30% capacity
  • Revenue would have been lower if it wasn’t for minimum guaranteed fees
  • Some politicians are concerned that departing POGOs will have a bad economic effect
Drawing of a man trying to hold up dominoes knocked over by the coronavirus
PAGCOR’s monthly fees have about halved as POGOs struggle to recover from the COVID-19 pandemic in the Philippines. [Image: Shutterstock.com]

Difficult times

The Philippine Amusement and Gaming Corp (PAGCOR) has seen its monthly revenues from online gaming operators based in the country plummet by about 80%, with regulatory fees nearly halved since May as a result. 

111 of the 218 accredited POGO service providers have been able to reopen

This comes as just 32 of the 60 operators with licenses pre-pandemic have been able to get back to business. Those that are back up and running are only doing so at 30% capacity. To date, 111 of the 218 accredited POGO service providers have been able to reopen.

PAGCOR’s monthly collection of regulatory fees has fallen from about ₱600m ($12.37m) down to about ₱300m ($6.2m). Due to the pandemic, the state gambling regulator experienced a net loss of ₱1.596bn ($33m) for the first six months of 2020, compared to a net profit of ₱3.079bn ($6.4m) for the same period in 2019.

Getting back in action

Certain Philippine Offshore Gaming Operators (POGOs) were given the green light in late May for “partial resumption” of catering to overseas customers. There were “stringent conditions” put in place in order for the POGOs to resume operations, with the hope that these companies could help generate funds for the national government to help deal with the pandemic battle.

42 service provider operators have put in requests for accreditation cancelation

PAGCOR offshore gaming licensing department assistant vice president Jose Tria gave an update to local media on Thursday about the POGO situation. He outlined how five POGO licenses have been revoked, with a further five being suspended. A total of 42 service provider operators have put in requests for accreditation cancelation. 

Tria noted that the monthly collections would have been lower “if not for the Minimum Guaranteed Fees which allows PAGCOR to impose higher regulatory fees than the 2% of POGOs’ GGR (gross gaming revenue) following the ‘whichever is higher’ formula.”

Some of the reasons for the POGO closures include the significant operational restrictions in place because of the pandemic, a stricter tax regime, and difficulties with Chinese workers being able to get back into the Philippines.

Downplaying concerns

On Thursday, Philippine presidential spokesperson Harry Roque tried to downplay comments that Finance Secretary Carlos Dominguez made on Wednesday. Dominguez said that POGOs leaving the country would have a significant negative effect on the economy.

According to a recent report from property consultancy firm Colliers, about 10% of all of the leasable office space in Manila has been occupied by online gaming companies. Roque said there has not been a “mass exodus” of POGOs. He explained that only a single operator has left, and that was because of an investigation by the Chinese government. 

Roque noted that there seems to be some confusion because only a certain number of operators have gotten approval from the Bureau of Internal Revenue (BIR) to resume. The BIR previously stated that only those POGOs that had fully paid up their outstanding tax bills would be able to get back to business.

At the start of September, the development of two POGO hubs was announced. The aim of these hubs is to centralize operations, making it easier to ensure regulatory compliance.