Philippines iGaming leads to record revenues

The Philippine gaming industry is on track to achieve a remarkable PHP350 billion (£4.67 billion/€5.645 billion/$6 billion) in gross gaming revenue (GGR) this year, driven primarily by a surge in online gaming. This significant milestone not only breaks last year’s revenue record but reaffirms the dynamic evolution of the sector, particularly in the realm of electronic games.

Projected revenues for 2024 will surpass initial government estimates of PHP334 billion, marking a substantial increase from PHP285 billion generated in 2023. This growth underscores the rising prominence of online gaming, which continues to reshape the landscape of the Philippine gaming market.

Temporary Growth Spike?

Recent research from Morgan Stanley indicates that online gaming generated a staggering 70% of the GGR in the third quarter of 2023. This conclusion is based on comprehensive data released by the Philippine Amusement and Gaming Corporation (Pagcor) on November 14. The report highlighted that GGR for this quarter soared by 37.52% to reach PHP94.61 billion, compared to PHP68.79 billion in the same period of the prior year.

Pagcor Chairman and CEO Alejandro Tengco credited this remarkable increase to electronic gaming, which displayed an explosive growth rate of 464.38% year-over-year. Revenue from this sector has now surged to PHP35.71 billion, up from just PHP6.32 billion in Q3 2023.

“This impressive performance highlights the substantial impact of modern technology and mobile devices on the gaming and entertainment landscape, suggesting that these innovations will be crucial in defining the future of gaming,” stated Tengco.

Nevertheless, Morgan Stanley highlights that this growth may not be sustainable in the long term. The implementation of new licensing and operational fees for gaming operators may restrict future expansion. In 2023, Pagcor licensed over 1,000 iGaming sites, with further applications pending approval.

“The policy adjustments initiated by the current administration have resulted in a significant rise in licensed gaming establishments,” Tengco remarked. “We also enacted reductions in licensing fees, which have further facilitated this spike in approved sites.”

Adapting Without POGOs

The Philippine gaming sector has faced considerable challenges this year, particularly with the removal of Philippine Offshore Gaming Operations (POGOs). Established in 2016 alongside domestic online gaming, POGOs primarily catered to international gamblers, particularly from China. However, allegations of criminal activities—including online scams, human trafficking, money laundering, and torture—prompted serious regulatory scrutiny.

In July, President Ferdinand Marcos Jr. announced a ban on the POGO industry, mandating that these operations exit the country by December 31. According to Pagcor, only a few POGOs remain operational as 2024 approaches.

In a related development, Pagcor is set to move to a new, expansive 40,000sqm headquarters in Pasay City, strategically located near Manila’s Ninoy Aquino International Airport and the vibrant Entertainment City casino zone. The organization has signed a 25-year lease with San Miguel Infrastructure (SMC) for this property.

“This new headquarters is not merely a building; it symbolizes Pagcor’s dedication to fostering a world-class working environment for its employees while embodying our identity, core values, and future aspirations,” Tengco commented.