Online Gambling in The Philippines

The South-East Asian cluster of islands known as the Philippines are now one of the region’s most popular destinations for gambling. Foreign investment is currently flooding in to the capital's lucrative hotel and casino industry, and Manila is starting to look like a formidable rival to the nearby gambling tourist trap of Macau. Despite its growing acceptance of land-based casinos, the Filipino government has taken a much tougher stance towards online gambling.

The Legal Landscape

Gambling within the Philippines mostly takes place under the auspicious gaze of the Philippine Amusement and Gaming Corporation (PAGCOR), which was formed in 1976 at the behest of President Ferdinand Marcos. The 100% state owned body was given a new lease of life in 2007, ensuring its control over the industry until at least 2032. PAGCOR is responsible for licencing the nation's gambling operations, and actually runs 13 casinos across the country, with 50% of the revenues going straight to the national treasury. The only area that avoids the control of PAGCOR is the tourist-friendly Cagayan Special Economic Zone and Freeport.

Whilst there are only minor differences in the law relating to physical gambling between the Philippines and the Cagayan area, their approaches to online gambling are poles apart. In Cagayan, online gambling sites are only open to foreign players, whilst Filipinos in the main part of the country are banned from placing bets online in their own homes - in order to play “online”, they must use one of over 200 e-Games Stations (PEGS) that are scattered around the country, which act as hubs for online gambling and legal sports betting. The vast majority of PEGS-based games are run and developed by PhilWeb, one of the largest companies in the country.

The waters were muddied in 2012, however, when the Filipino Court of Appeals issued a landmark ruling stating that the Presidential Act that governs online gambling does not expressly ban the use of foreign-based online casinos, creating the possibility of much wider competition outside of PAGCOR control.

Popular Markets

Historically, Sabong (cock fighting) has been a popular past-time in the Philippines, with both legal and illegal matches taking place on a regular basis - fans can gamble on the legal events using a number of specialist websites licenced by the Cagayan Special Economic Zone. A number of other more internationally mainstream sports are also growing in popularity, and PAGCOR is starting to show a greater willingness to extend the option of sports betting through its various PEGS. Asian League basketball, boxing and the unusual Sepak Takraw (a form of kick volleyball) are all popular sports in the Philippines, and they are steadily becoming available following a push by PhilWeb and collaboration with PAGCOR.

The Future of Gambling in the Philippines

PAGCOR's current domination of the domestic market may be an unusual approach, but it is clearly working in the government's favour. The body has posted record revenues over the past three years, bringing in a total of £1.5billion (107billion PHP) since 2010 and vastly boosting the government's coffers. However, the ruling of January 2012 is likely to have an effect on the market, with the country's population now technically free to use the services of foreign online casinos such as Mr Green. This has the potential to loosen PAGCOR's control, although both they and the government are unlikely to surrender to a free market approach without a fight.

Leading analysts such as Merrill Lynch and Bank of America are also predicting a boom in the country's physical gambling industry over the coming years, suggesting that the handful of large hotels and casinos set to open over the coming months have the potential to double gambling profits within 18 months to around £3.5billion. In order to capitalise on the extra tourists coming their way, PAGCOR is likely to continue its pattern of slowly opening up the domestic market, making more sports options available and potentially easing restrictions on online access.

Until Filipinos start to see these reforms, though, they can take comfort in the 2012 ruling and start to use foreign-hosted sites without fear of prosecution. Leading sites such as Mr Green are currently accepting players with IP addresses from the Philippines through their international site, and it's only a matter of time before other operators follow suit.

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