Philippine Gaming Industry Faces Major Overhaul with PAGCOM Regulatory Plan

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In a shift potentially destined to reshape the Southeast Asian gaming landscape, senior Philippines law-makers have set plans in motion to fundamentally transform the country’s gaming industry. Their proposal centers on relinquishing the government’s role in operating casino staples such as slot machines, table games, and online gambling platforms, thereby breathing new life into an industry subject to many a roadblock since its conception.

The proposed overhaul is spearheaded by Jonathan Flores, a respected member of the Philippines’ House of Representatives and chair of its Committee on Government Reorganization. Flores is urging the support of Filipino Congress for House Bill 3559, a piece of legislation that was introduced in August 2022 by Rep. Ralph Recto, now serving as the Secretary of Finance, but has languished in the Manila capital without action for close to two years.

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The groundbreaking HB 3559 aims to establish the Philippine Amusement and Gaming Commission (PAGCOM), a government body tasked solely with regulating the many commercial casinos operating across Southeast Asia along with governing online gaming. The creation of PAGCOM would serve to displace the current regulatory body, PAGCOR, the Philippine Amusement and Gaming Corporation, which is distinctive for having both regulatory and operating capacities over commercial casinos running under the government’s Casino Filipino brand.

PAGCOR’s intertwined roles have long stirred controversy, with many seeking a transition to a regulation-only model. In the era of President Rodrigo Duterte, the corporation had initiated plans to divest from its Casino Filipino establishments. However, the venture was abandoned as Duterte deemed the operations too profitable to let go. Now, under the leadership of President Ferdinand Marcos Jr., who came into power on June 30, 2022, the government has taken progressive steps towards selling select PAGCOR satellites, with a few having been divested already.

However, PAGCOR has held on to its lucrative Casino Filipino branches in Manila, Davao, Cebu City, and other prominent cities and popular tourist spots. A transition in strategy does seem likely, as PAGCOR has assured the selling of its remaining casinos by the end of Q1 2026. Alejandro Tengco, the PAGCOR Chief Executive, last year provided assurance of the upgrade of the casinos’ IT systems and security measures to secure a favorable price.

“We aim to make privatization primary in our master plan while reshaping PAGCOR’s role into a completely regulatory one. Once we complete these upgrades and renovations, we expect an increase in player and guest numbers, thus enhancing the appeal to potential investors when we commence selling,” stated Tengco at last year’s G2E Asia expo.

With China pressuring Macau, the only place in the People’s Republic where casinos are authorized, to scrutinize junket operators more strictly, the Philippines’ industry draws more attention. Most junkets, after seeing a prominent tycoon sentenced to 18 years in a Chinese prison for gambling crimes, are seeking friendlier operating climates, including the Philippines. The future of the Philippine gaming industry seems set for a drastic makeover. Economic action is slowly but assuredly taking the place of political inaction, promising fresh challenges and rewards alike.