Philippines regulator to cut gaming licence fees

The Philippine Amusement and Gaming Corporation (Pagcor) is set to implement a significant reduction in gaming license fees beginning January 2025. Pagcor Chairman and CEO Alejandro Tengco has emphasized that these lower fees aim to attract increased investment into the burgeoning Philippine gambling sector.

During the Gaming Summit held on September 10 in Manila, Tengco announced this pivotal decision, which is part of a broader strategy to enhance the competitiveness of the Philippine gaming industry, which, in 2023, achieved an unprecedented revenue milestone of ₱285.27 billion (£3.823 billion/€4.529 billion/$5 billion).

Stimulating Growth in the Philippine Gaming Market

Upon assuming office in 2023, Tengco observed a troubling trend: the grey or underground gambling market was outperforming Pagcor, leading several licensed operators to close due to their inability to compete effectively with unregulated entities. “Lowering fees will align the Philippines with global industry standards and help attract and retain more investors,” Tengco remarked, underscoring the urgency of adapting to this evolving landscape.

This strategic move aims to lower entry barriers in the legitimate market, thereby potentially reducing illegal igaming operations within the Philippines. Tengco reiterated Pagcor’s commitment to enforcing rational and efficient regulatory practices while intensifying efforts to eradicate illegal gambling activities.

Reducing Tax on Gross Gaming Revenue

Starting on January 1, 2025, the gaming license fees for land-based operators will decrease from 35% to 30%, while resort operators involved in igaming will benefit from a reduced rate of 25%. This adjustment marks a vital change in policy designed to invigorate the sector.

Earlier this year, the tax rate on gross gaming revenue (GGR) was also significantly slashed, dropping from 55% to 35%. This dual reduction in fees and taxes is expected to create a more favorable operating environment for licensed operators, with Tengco projecting that the industry will meet its goal of ₱335 billion in GGR this year, representing a robust increase of 17.91% from 2023.

Mitigating Losses from POGO Closures

The overall growth strategy comes as a response to the recent ban on Philippine Offshore Gaming Operations (POGOs), implemented by President Ferdinand Marcos following concerns about associated criminal activities. The cessation of these operations is projected to result in an annual revenue loss of at least ₱20 billion, emphasizing the need for a diversified and sustainable gaming environment.

By fostering a more robust and compliant market, Pagcor not only aims to offset these anticipated losses but also to create a thriving ecosystem for both local and international investors. The trend towards regulatory alignment and modernization reflects a commitment to ensuring a safe, competitive, and transparent gambling industry in the Philippines.