Gaming | Philippines: Thousands lose jobs after online casinos catering to Chinese close

Two online casino operators that cater mostly to Chinese clients are exiting the Philippines, and more shutdowns of offshore gaming firms in the Philippines are forthcoming, according to casino operator and regulator, the Philippine Amusement and Gaming Corp. (PAGCOR).
More than 5,000 employees, mostly foreign nationals, will lose their jobs after Don Tences Asian Services Solutions and SC World Development Group Ltd asked that their licenses be canceled, according to PAGCOR.
Jose Tria, PAGCOR’s Assistant Vice President for the Philippine Offshore Gaming Licensing (POGO), told the Manila Bulletin that other companies in the sector were considering an exit because of tax measures being imposed against the industry by the Bureau of Internal Revenue.
The Congress of the Philippines is looking at proposals to enforce a 5% franchise tax on gross revenue or receipts derived from online casino operations, and to impose a 25% income tax on foreigners working in the industry.
“There are other jurisdictions that have opened up, offering better tax rates and friendlier environment,” Tria said. “Some [POGOs] also can no longer take the criticisms they get each day as it makes them feel unwelcome in our country. […] They will most likely go to countries with lesser regulatory fees and taxes to be economically viable.”
Tria said steps taken to stem the virus outbreak have also affected the operations and economic viability of online casinos. These are choking what could have been a pickup in transactions amid the pandemic, he said.
“We’re working on ways to allow the resumption of their operations, but you know, we can only do so much,” the PAGCOR official explained. “We are regulators, we have to do everything in accordance with the law.”
“I’ve heard there are other companies that also plan to cancel their licenses, but I haven’t received their official letters so I can’t name them yet,” Tria said. “We are doing our best to convince them to stay.”
“Continued withdrawal by online gaming operators will hurt prospects of casino companies and also developers because this is a key market for residences and offices,” says Astro del Castillo, managing director at First Grade Finance.

Suncity says exit rumor is mix-up
Citing Andrea Domingo, PAGCOR’s chair and chief executive, the Manila Bulletin reported that Suncity Group was among the junket operators to cease its POGO business. However, the gaming promoter told Inside Asian Gaming that they were committed to the junket business in Manila and “we can’t find any reason to leave Manila at this particular moment.”
“In regards to the comment provided by Mdm Andrea Domingo, we think she is referring to tele-betting services, which has nothing to do with the junket business that Suncity Group operates in Manila,” the junket operator said. “We will continue to develop our VIP entertainment business in licensed gaming operators in Manila, and provide seamless VIP services to our guests,” Suncity Group added.
Last year, the junket operator denied allegations made in the Chinese media that it was running online gambling operations in Southeast Asia that targeted mainland gamblers. At the time, owner Alvin Chau pledged that the entire group’s operations would in future abide by Macau law, even those operations in foreign jurisdictions. Online casinos are not legal in Macau. DB/Agencies

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