Philippines senator raises concerns over loopholes in POGO shutdown order

Philippines

Viviana Chan

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November 11, 2024

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Philippines senator raises concerns over loopholes in POGO shutdown order

Philippines Senator Risa Hontiveros warned on Saturday that the recent order from President Ferdinand Marcos Jr. to shut down Philippine Offshore Gaming Operators (POGOs) may have significant loopholes.

Senator Risa Hontiveros, Philippines — _{Senator Risa Hontiveros}

According to local media Inquirer, Hontiveros pointed out that the Executive Order (EO) did not explicitly include all establishments, particularly those outside the oversight of the Philippine Amusement and Gaming Corporation (PAGCOR), such as those operating within the Cagayan and Aurora Freeports.

While Malacañang Palace has clarified that it directed the Cagayan Economic Zone Authority (CEZA) to comply with the shutdown order, Hontiveros remains concerned.

Executive Order No. 74 follows President Marcos’ announcement during his State of the Nation Address (SONA) in July, where he pledged to phase out POGOs and end their operations by December 31st.

Hontiveros expressed support for the goals of the EO and welcomed the reintegration program for displaced workers.

CEZA, Cagayan Economic Zone Authority, Philippines

Lack of clarity over CEZA

Senator Risa Hontiveros identified problems with the lack of clarity in Executive Order No. 74, specifically regarding the operation of POGOs in economic zones. She pointed out that Section 1b of the order states that the ban does not apply to online games of chance conducted in PAGCOR-operated casinos, licensed casinos, or integrated resorts with junket agreements. This suggests that PAGCOR-operated and -licensed casinos may be exempt from the ban on offshore online games.

Hontiveros questioned whether this exemption means that POGOs could continue operating in casinos such as City of Dreams Manila or Fontana Leisure Park, or in resorts with casinos on their premises.

As someone who has led two separate Senate inquiries into crimes related to POGOs, Hontiveros also highlighted the absence of any mention of the authority of special economic zones like the Cagayan Special Economic Zone and Freeport to issue permits to offshore gambling operators.

Cagayan Economic Zone Authority (CEZA) Administrator Katrina Ponce Enrile, daughter of Chief Presidential Legal Counsel Juan Ponce Enrile, had previously denied reports that CEZA allowed POGOs to operate at the freeport in Sta. Ana, Cagayan. Hontiveros clarified that “other offshore gaming licensees” refer to those authorized under their respective charters and subject to the supervision or jurisdiction of PAGCOR. However, CEZA and the Aurora Pacific Economic Zone and Freeport Authority (APEC) fall outside PAGCOR’s jurisdiction.

Malacañang, in response, issued a memorandum from Executive Secretary Lucas Bersamin instructing CEZA to comply with the President’s order. Bersamin emphasized that CEZA should immediately adhere to the directive issued during the President’s State of the Nation Address in July regarding the ban on POGOs, following applicable laws.

In late July, a week after the SONA, Enrile and her father testified at a House hearing on crimes linked to POGOs. They argued that the POGO ban should not undermine CEZA’s operations, particularly its offshore gaming licensees. Enrile defended CEZA’s authority, stating that foreign iGaming operators operating under its jurisdiction are legally compliant and prohibited from accepting bets from the Philippines or other countries where gambling is illegal. She explained that CEZA’s charter, which was principally authored by her father, grants it the authority to register offshore iGaming operators.

Only 12 of 96 registered firms in iGaming or BPO sectors

The Cagayan Freeport Zone is the only regulated interactive gaming jurisdiction in Asia, where foreign iGaming operators are licensed to offer activities such as sports betting, e-casino, and random number games. CEZA Administrator Katrina Ponce Enrile assured lawmakers that these operations do not contribute to the spread of gambling. She argued that the President’s POGO ban should not negatively affect CEZA’s business. However, she did not clarify why shutting down POGO companies would harm CEZA, particularly when its June report showed only 12 of 96 registered businesses were involved in iGaming or business process outsourcing.

Senator Risa Hontiveros warned that the ambiguities in the President’s executive order highlight the need for clearer legislation to implement a comprehensive ban on POGOs. She supported Senate bills aimed at outlawing all forms of internet-based gambling and vowed to address gaps in the executive order during legislative discussions.

EO welcomed

Senators Joel Villanueva and Sherwin Gatchalian welcomed the Executive Order (EO) as a clear sign of the government’s determination to eliminate POGOs.

Villanueva emphasized that the order supports ongoing legislative efforts in Congress. Meanwhile, both senators reiterated their commitment to advocating for the passage of Senate Bill No. 2752, the Anti-POGO Act, and Senate Bill No. 1281, the Anti-Online Gambling Act. Both bills aim to eliminate and penalize all forms of e-gambling in the country.

In addition, the Philippine National Police (PNP) announced plans to ramp up enforcement through its Task Force Skimmer, which will focus on dismantling illegal POGO operations. The PNP also called on the public to report any suspected POGO activities to help ensure the ban’s success.

Statistics show that mainland Chinese visitors make up the largest share, at 70 percent, with a 33 percent year-on-year increase. Visitors from Hong Kong account for 21 percent, with a slight increase of 0.5 percent year-on-year. Visitors from Taiwan account for 2 percent, with a significant increase of 73 percent year-on-year. Other international visitors make up 7 percent, with an 83 percent year-on-year growth.

_{Macau visitor arrivals YOY 2024: DSEC}

In terms of entry point distribution, 39 percent of visitors entered through the Gongbei checkpoint, 25 percent via the Hong Kong-Zhuhai-Macao Bridge, 12 percent through Hengqin, and 9 percent through the airport.

The Public Security Police noted that the number of inbound visitors has been steadily increasing, with good order maintained at all checkpoints. With the implementation of various policies benefiting Macau and several large-scale events taking place in November, it is expected that the flow of people at the checkpoints will remain high throughout the month.

In addition, according to earlier forecasts from the Macao Government Tourism Office (MGTO), the total number of visitors for the entire year is expected to reach 33 million, with the international visitor target set at 2 million. As of the first three quarters of this year, international visitors have already reached 1.67 million.

More than a quarter of the world’s population have gambled at some point in their lives. Recognizing responsible gambling not only as an impactful iGaming trend but also as one of its core values, SOFTSWISS implements the ‘players come first’ principle into all its products and solutions. In line with the license requirements and best safer gambling practices, the company ensures operators have all the necessary tools to provide the best player experience.

AI-Driven Tools

Alongside the traditional must-have elements, SOFTSWISS is developing innovative AI-driven options. An innovative risk-scoring system will accompany deposit limits, self-exclusion opportunities, reality checks, and other standard features.

The risk-scoring system is set to distinguish early signs of problem gambling issues, signaling suspicious conduct like increased spending or efforts to recoup losses. Early detection helps responsible gambling officers intervene before the problem becomes more serious.

Professional Development

The SOFTSWISS team is committed to staying current with industry standards by participating in regular training and refresher courses. These ongoing sessions ensure that staff are up-to-date on the latest developments, best practices, and advancements in responsible gaming policies, reinforcing the company’s dedication to a safer gaming environment.

Most Antifraud team members hold certifications in responsible gaming from respected institutions such as GamCare, Gaming Operations Academy, Sustainable Interaction, and iGaming Academy, among others. This commitment to continuous learning reflects SOFTSWISS’ belief that companies supporting responsible gambling must constantly elevate their team’s expertise to meet evolving challenges.

Players Awareness

It is crucial to highlight the true spirit of gambling as a source of entertainment but not a quick path to financial gain. Shaping this perspective and unveiling the possible pitfalls of unchecked gambling habits can act as a safeguard, steering players away from potential crises. Fostering this awareness from the outset nurtures a balanced, thoughtful approach to gaming.

SOFTSWISS actively supports players who may require additional assistance by guiding them toward trusted organizations that offer free, confidential help. The company continually expands its network of these support resources to provide players with tailored assistance that addresses specific challenges they may encounter. This commitment ensures that each player can access the most relevant and effective support available.

Emilia Kurzynska, Deputy Team Lead of the Antifraud Team at SOFTSWISS, shares: “Our responsibility goes beyond simply offering a gaming platform. It’s about supporting our clients and players in fostering a balanced relationship with gambling. We collaborate closely with operators to identify early indicators of problematic behaviour and respond proactively. For us, the goal is to keep gaming as a source of entertainment, not harm”.

During European Safer Gambling Week, Eleni Panagiotopoulou, Head of the Anti-Money Laundering Team at SOFTSWISS, will speak at the webinar ‘The Role of KYC in Safer Gambling: Tackling Fraud with Technology’. The European Gaming and Betting Association (EGBA) and Sumsub will hold the webinar on 21 November.

Concurrent with public voting, the first phase of private voting also starts during which all participants who have submitted entries can vote for one favorite in each category. An international auditing company oversees this phase to eliminate duplicate votes and self-votes. This phase ends on November 19, 23:59 GMT+4.

The second phase of private voting will also occur with a jury of industry experts making their decisions based on the shortlist picked by participants during the first phase.

Fingers are crossed for all participants and we are looking forward to meeting you all in Ras Al Khaimah on December 13.

Ewa brings over 15 years of senior leadership expertise, having successfully steered a game studio through periods of sustained growth and innovation. Her proven track record as a former Chief Executive Officer at multiple iGaming brands will be instrumental in driving ELA Games’ ambitious roadmap. Ewa’s appointment aligns with the studio’s commitment to excellence and reinforces its mission to deliver an exceptional portfolio that resonates across global markets.

ELA Games is gearing up for an impactful 2025, with Ewa at the helm to guide the studio’s expansion strategy. Her leadership will support the studio’s initiatives in establishing a strong market presence and enhancing product development to meet evolving industry demands.

Ewa commented on her new role, stating, “Joining ELA Games presents an incredible opportunity to lead a talented team with a clear vision for growth and innovation. ELA Games has the potential to become a leading force in the industry, and I am excited to contribute to its journey toward building a unique and influential gaming portfolio.”

The addition of Ewa Kaźmierska to ELA Games’ executive team underscores the studio’s dedication to robust growth and strategic excellence. With this leadership move, ELA Games is poised to strengthen its position as a premier game supplier in the iGaming landscape.

Ihor Zarechnyi, CBDO at Evoplay, said: “Breaking into the Czech market with an exclusive partner like Fortuna underscores our strategic vision for regulated markets. We’re thrilled to bring our diverse content offering to Czech players and are confident this collaboration will yield outstanding results.”

Myke Foster, Group Head of Commercial Gaming Operations at FEG, said: “This partnership reflects our commitment to delivering best-in-class entertainment and exceptional gaming experiences to all FEG customers, with Evoplay providing a broad content portfolio proven with players around the globe. We are thrilled to be the first operator to take Evoplay’s titles live in the Czech market, and we anticipate a new level of engagement among our local audience.”

Anastasia Rimskaya, Chief Account Officer at Aviatrix, said: “The Netherlands has been on our radar for some time, so this is a big day for us here at Aviatrix. We can’t wait to see Dutch players enjoying the title, and we will be working closely with some very special partners in the Netherlands to ensure this game is widely available very soon.”

Part of what makes Aviatrix so successful is the constant updates to the game, which keeps it fresh and exciting for players.

This has included a full redesign with new, 3D assets, as well as a first-of-its-kind free bets function via in-game promo codes.

The Presidential Communications Office issued a release today, citing the President as saying, “The State has the paramount duty to safeguard national security, maintain public order, uphold the rule of law, protect the safety of its citizens, and ensure the integrity of the social fabric of the nation”.

POGOs have been widely in focus due to a rise in criminal activities associated with offshore gaming, both with licensed and unlicensed operations.

What’s covered?

Under Executive Order 74, the ban includes a wide range of offshore gaming entities, which it defines.

These include:

POGO licensees authorized by PAGCOR;
POGO Gaming Agents (representatives in the Philippines of offshore-based licensees);
POGO service providers (BPOs).

This last element also includes ‘Business corporations organized in the Philippines which provide components of offshore gaming operations to POGOs such as strategic support provider, IT support provider, live studio and streaming provider, and gaming software provider’.

The offshore gaming operations and services covered are ‘online games of chance, limited to live-streamed electronic casino (e-casino) games, online random number generator (RNG) games, and online sports betting, exclusively and directly offered to foreign players, located outside of the Philippines, via the internet or online means’.

IGLs (internet gaming licensees – the newer definition used for POGOs) are equally covered – under the same definition, while also including local gaming agents – ‘a duly constituted business enterprise of good repute […] who represents a Foreign-based IGL licensee’, as well as ‘authorized gaming content provider or authorized support provider’ – ‘a duly constituted corporation organized in the Philippines providing the components of internet gaming operations’.

Ban target

The ban also immediately targets all POGO or IGL ‘and other offshore gaming operators without the necessary license, permit, or authorization, classifying them as illegal gambling entities’ and subject to the ‘ongoing and intensified crackdown on illegal gambling activities’.

License applications were similarly halted for any ‘licenses, permits or authorizations of POGO/IGL and other offshore gaming applications’.

The ban further includes authorizations for ‘related/auxiliary/ancillary services’. This is both for entities ‘under the authority of PAGCOR’ as well as ‘other government licensing authorities and within the jurisdiction of the Republic of the Philippines’.

License renewals are similarly canceled and all licensed or permitted operations have to wind up their affairs by December 31^st or earlier, as previously outlined.

Philippines senator raises concerns over loopholes in POGO shutdown order

Employees and regional governments

The Executive Order also covers employment recovery and reintegration, aiming to help displaced workers find replacement jobs ‘at the soonest possible time’.

Aside from setting up working groups to both crack down on offshore gaming operations before the deadline and help displaced workers, the Executive Order empowers local governments to ‘effectively implement the foregoing ban on offshore gaming services and operations within their respective jurisdictions’, providing a reporting mechanism to report on suspect activities.

Support for the private sector

The Executive Order does provide a measure of restraint, with the private sector ‘strongly urged to waive interests, penalties, fees, and other charges attendant to the termination of ancillary contracts or services, such as […] lease of premises, janitorial services, security, internet, and electricity’ of licensed offshore gaming operators.

Deterrent of foreign investment and tourism

The Executive Order justifies the ban as being due to ‘the high reputational risks associated with POGO/IGL operations deter foreign investment and tourism, undermining the efforts of the National Government in promoting the country as a safe and sustainable investment and tourism destination’.

It highlights how POGOs and offshore gaming have brought about ‘increased crime rates, social instability, and exploitation of vulnerable people associated with them.’

FBM’s pragmatic growth approach in the US enters a new chapter. The global gaming company has just signed a distribution agreement with Delta Gaming Solutions to install its slots in casinos operating throughout Oklahoma. The agreement, celebrated during G2E Las Vegas, will enable FBM to explore all segments of the tribal gaming market within the state.

By joining forces with Delta Gaming Solutions, FBM will have the opportunity to install its products in several tribal gaming facilities and analyze player feedback across different sectors. In addition to the current offering in the US market, headlined by Jí Hǎo Link™, the agreement outlines a steady rollout of new slot products, such as Jí Hǎo Link™ Spirits and Xing Fú Fortune™ Money Trees, using the Galaxy II and Auria casino cabinets.

For Renato Almeida, Director at FBM, this agreement marks a new consolidation milestone in the strategic plan defined by the FBM Group for the US market, opening positive prospects. “We are very happy with the agreement and are confident that this new partnership will lead to the successful expansion of FBM’s slots in numerous tribal casinos throughout the great state of Oklahoma,” he said.

FBM entered the US market last year and has been progressively introducing its slot gaming offer. Recently, the brand reinforced its commitment to the American operation by opening a new office in Oklahoma, enhancing its ability to provide top-quality games and cabinets to casino operators. This new agreement strengthens FBM’s position in the United States, facilitating the rapid deployment of its gaming portfolio in one of the most significant states in the gaming industry.

FBM teams up with Delta Gaming Solutions to expand slot presence in Oklahoma casinos — _{FBM and Delta Gaming Solutions signed the distribution agreement during G2E Las Vegas.}

Delta Gaming Solutions is a trusted full-service electronic gaming device distributor in Oklahoma. Since 2015, Delta has installed and maintained slot machines and electronic table games in multiple casinos across Oklahoma and continues to expand its footprint by building mutually beneficial long-term relationships with casino operators throughout the state.

Sports Content, Technology & Services brought in some €45 million ($48.5 million), up 8 percent yearly, with its strongest contributor being Marketing & Media Services, up by 10 percent yearly, to €32.94 million ($35.5 million) ‘with strong growth in both European and North America ads revenue as several sportsbooks launched marketing campaigns’.

The group’s revenue continued to be concentrated outside of the United States, with the Rest of the World contributing €204.07 million ($219.9 million) – a yearly increase of 23 percent.

The US market saw strong growth, however, up 46 percent yearly, to €51.09 million ($55 million). The group increased its share of total company revenue from the US market to 20 percent, from 17 percent in the same quarter of last year.

Adjusted EBITDA group-wide rose by €15 million ($16.17 million), to €66 million ($71.1 million), due to the growth in revenue but offset by increased sport rights costs ‘primarily related to the ATP partnership deal, higher purchased services driven by investments in developing our product portfolio, increased personnel expenses due to headcount growth and a higher bonus accrual in the current year’.

Looking at the annual outlook, the group is projecting a 24 percent yearly rise in revenue, to ‘at least’ €1.09 billion ($1.17 billion), with adjusted EBITDA expected to rise 29 percent yearly, to €216 million ($232.8 million).

Philippines Senator Risa Hontiveros warned on Saturday that the recent order from President Ferdinand Marcos Jr. to shut down Philippine Offshore Gaming Operators (POGOs) may have significant loopholes.

Lack of clarity over CEZA

Only 12 of 96 registered firms in iGaming or BPO sectors

EO welcomed

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According to the latest data from the Public Security Police, as of noon on Sunday, November 10th, the number of visitors to Macau this year has exceeded 30 million, surpassing last year’s total of 28.25 million.

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SOFTSWISS, a leading gambling software development company with over 15 years of experience in iGaming, will participate in European Safer Gambling Week. From 18 – 24 November, the company will join the iGaming community to share its responsible gambling insights.

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BetConstruct, a leading technology company specializing in developing online and land-based gaming and betting solutions, has announced that the eagerly awaited Ortak x B.F.T.H. Arena Awards 3.0 has officially opened for public voting following the close of submissions.

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ELA Games, a pioneering game supplier studio, has announced the appointment of Ewa Kaźmierska as Managing Director.

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Evoplay, the award-winning game development studio, has made its debut in the Czech Republic through an exclusive collaboration with leading operator Fortuna.

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Aviatrix, the acclaimed crash game, has been certified in the Netherlands, allowing Dutch players to experience the popular title for the first time.

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The Philippines’ president has officially issued Executive Order 74, banning the operation of Offshore Gaming Operators (POGOs) in the country, with all operations to be wound up by December 31st.

What’s covered?

These include:

Ban target

Employees and regional governments

Support for the private sector

Deterrent of foreign investment and tourism

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FBM has expanded its journey in the United States with a new distribution agreement signed with Delta Gaming Solutions. This deal will allow FBM to accelerate the introduction of its gaming product lines across Oklahoma, the second-largest gaming market in the USA.

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Global sports technology company Sportradar has further raised its FY24 outlook after seeing a significant increase in profits, driven by strong revenue and adjusted EBITDA rises in the third quarter.

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The Philippines’ president has officially issued Executive Order 74, banning the operation of Offshore Gaming Operators (POGOs) in the country, with all operations to be wound up by December 31^st.