The non-economic consequences of POGO

First, POGO stands for Philippine Offshore Gaming Operators. Regardless of any acronym or euphemism, it is into making money from a vice. The economic effects are easily seen in the higher rental rates, higher salaries, and higher fees for support service providers. These are to be expected from a business with high margins.

POGOs are praised for their contributions to dollar flows and to the GDP, to the hiring of workers, and in generating economic activities. Well and good, but that is only one side of the story. In the words of dealers and players, the odds are stacked against us.

With one vice come all the other vices. We read the news on prostitution and trafficking of women, both local and foreign. Alcoholism accompanies gamblers. There are no smoking bans that are effective. Even casino workers have to inhale the smoke and smell the alcohol.

Criminality takes place; organized crime moves in. Money-lending at usurious rates, harassment of borrowers, and kidnapping for ransom, beatings, knifings, killings, ambushes, and grenade throwing and all forms of illegal activities are happening.

It is specially grave under an administration that shouts a very loud anti-crime program.

It is expected that taxes will not be paid; labor and immigration laws are breached. It is expected that business permits and sanitation practices are not followed. When legal codes and moral codes do not bind, social norms and local practices are ignored.

What is problematic is that Filipinos who are attracted to the pay are working dead-end jobs, work that does not produce or add value but rather erodes the values of workers who are caught up with the bling-bling of easy money. The energy of the youth is spent on graveyard shifts shuffling cards and counting chips. The vitality of fresh minds is lost in the endless cycle of betting and dealing.

Gamblers in China, players in the Philippines, Chinese, Filipino, and Russian workers are all victims in different ways.

China is an ancient civilization with a rich culture and deep traditions. To reduce the partnership of the two nations to allowing or not allowing online gambling is a disservice. Surely, there is more to cooperate on than the interdiction of criminals.

Building a bridge a year is building relationships; constructing a speedy train in six years is a construct of what allies do for each other.

These activities local businessmen will no longer undertake. One consequence of POGOs is that it saps the entrepreneurial spirit. If renting out an office or residence is lucrative, why bother with expanding factory production or increasing spending on technology, and investing on research and development with the attendant risks and long payoffs?

Capital is not channelled to where it is most needed. It is poured into no-brainer renovations. Supply lines are disrupted; business decisions are skewed. Investments do not go to key industries.

We ignore the fact that if China decides to get serious about the illegality of gambling as a social evil, it can instruct its great Internet wall to stop any data flow from the Philippines. The IP addresses are certain and the type of traffic unique to gambling is detectable.

The other way is to stop mainland Chinese from traveling to the Philippines, specially those who travel frequently for short stays, or those with several extensions of visa. It is so easy.

Then overnight, the whole POGO industry disappears — cars, buildings, and houses are abandoned. Obligations and responsibilities turn into vapor. Workers are out of jobs and suppliers are out of their minds.

In these years, there is no human development of our people. There is no capital formation. We only have the monies from the gambling and the social problems that are left behind.

The solution may indeed be in keeping online gaming economic zones away from CBDs. It will be similar to how industrial plants with harmful pollutants are treated. Better regulation and protection of workers can be done that will benefit the business owners. The purely economic aspects can be milked while the local communities are shielded from the normalization of a vice as a business.

If any of the chief executives of Manila, Makati, Taguig, Pasig, or Pasay, or Cebu, Iloilo, or Davao truly care for their citizens, business permits can be readily revoked. Inspections for violations of any ordinance can quickly send a strong message. It is so easy. Then they can work on what is important.

Then the country can truly focus on what is essential to our people. And it is not gambling, not working for a gambling operation, and not for money at any cost.