Corporate News

By Keith Richard D. Mariano, Reporter

76 firms seek PAGCOR offshore gaming licenses

Posted on October 11, 2016

THE PHILIPPINE Amusement and Gaming Corporation (PAGCOR) will initially grant 25 licenses for offshore gaming operations, with 76 companies having to compete for the contracts scheduled for awarding starting this month.

PAGCOR has received 76 applications since rolling out offshore gaming, its Chairman and Chief Executive Officer Andrea D. Domingo said on the sidelines of a meeting of the House of Representatives’ Committee on Games and Amusements on Monday.

The state corporation, tasked to regulate the country’s gaming industry concurrently, will initially approve 25 from the first batch of applications and grant licenses valid for a year.

“It will last for a year and they (licensees) know that we might be changing the rules and regulations after that,” Ms. Domingo said, with the first three to six months allowing PAGCOR time to “study” the online gaming activity.

The licensees called “Philippine offshore gaming operators” will offer casino games through the Internet exclusively to foreigners aged over 21 years and are based abroad. Foreigners staying in the Philippines and Filipinos residing abroad are not allowed to participate in such an activity.

Companies seeking an offshore gaming license must pay $50,000 in application and processing fees for e-casino and $40,000 for sports betting. They must pay another $200,000 for an e-casino license and $150,000 for a sports betting license upon receiving approval from PAGCOR.

Asked when the gaming regulator can issue the first 25 licenses, Ms. Domingo said: “I think before the end of October.”

PAGCOR launched offshore gaming licenses in mid-September to offset foregone revenues from electronic gaming operations, which President Rodrigo R. Duterte ordered closed during the first Cabinet meeting on June 30.

The crackdown on electronic gaming started with PhilWeb Corp. whose license to operate the e-Games network as provider of software and associated facilities was just about to expire. PAGCOR had allowed the listed gaming technology provider’s license to expire on Aug. 10 after a one-month extension.

PhilWeb controlling shareholder Roberto V. Ongpin, however, attributed the non-renewal of the contract to Mr. Duterte’s tirades against “oligarchs” particularly the businessman, who had served as Trade minister to the late dictator Ferdinand E. Marcos.

In this light, Mr. Ongpin resigned as chairman and director of PhilWeb and decided to divest his entire shareholding in the company in hopes that PAGCOR will grant the company a new license.

PhilWeb on Oct. 5 announced that Gregorio Araneta, Inc. has agreed to acquire Mr. Ongpin’s entire 53.76% stake for P2.01 billion and that its new management will apply for a new license.

“There’s no prohibition for them not to apply but everything has to go through the procurement process and then the board will decide,” Ms. Domingo said. “This time, they will have to follow all the rules and regulations for procurement.”

Mr. Duterte has already softened his stance against online gambling, saying the government will allow electronic gaming catering to local players as long as operators pay the proper taxes and observe site restrictions.

Ang desisyon noon ay alisin na ang e-Games, e-Bingo dahil ang kanilang target talaga ay ang mga mahihirap (The decision before was to remove e-Games, e-Bingo because their target market is the poor),” Ms. Domingo told lawmakers during the committee hearing.

Without disclosing details, Ms. Domingo said PAGCOR will have a new manual for the regulation of gaming operations to tackle the proliferation of online gambling operations without eroding its revenues.

In the first eight months, PAGCOR has generated P35.22 billion in revenues, a 9.81% increase from the P32.07 billion posted for the same period in 2015. Its contribution to government coffers accordingly rose to P22.70 billion from P19.74 billion.

The state firm has set aside P2.2 billion for the President’s social fund alone as of end-July. The amount is expected to double by year end, Ms. Domingo said.