As the Philippine government cracks down on Philippine Offshore Gaming Operators (POGOs) due to links with organized crime, concerns arise over whether these operations will truly be shut down or simply rebrand and relocate.
Gambling companies called the Philippines home long before the term POGO was ever coined, but it was under the reign of President Duterte that the country became the hub of activity which led to where we are now. The first operators set up shop in the early 2000s and were limited to where they could operate from, with many of the biggest names occupying vast offices in PBcom Tower and RCBC Plaza, overlooking Ayala Avenue in Makati. Then the Duterte regime regulating them as Philippine Offshore Gaming Operators (POGOs) (renamed Internet Gaming Licensees (IGL) in October 2023) from 2016 onwards, and numbers increased, as did the locations from which they conducted their businesses.
POGOs, which initially flourished under the Duterte administration due to liberal gaming laws, have since been linked to various criminal activities, including human trafficking, online fraud, and illegal gambling. These operations primarily target Chinese nationals, as gambling is illegal in China, but they have left a significant footprint in the Philippines by leasing and often even building call center-style facilities, and employing foreign workers, mainly from China.
Despite President Ferdinand Marcos Jr.’s firm stance against POGOs, including a nationwide ban, many familiar with the inner workings of the Philippines believe endemic corruption may allow them to persist, either underground or by diversifying into other industries, such as call centers. Observers like Alvin Camba, a research adviser at Associated Universities Incorporated who has studied Chinese investments in Southeast Asia, and Senator Risa Hontiveros warn that some POGO operators with deep political connections might evade the ban by transitioning into different business sectors or relocating operations to neighboring countries. Some operators are already known to have moved all or parts of their operations to places like Cambodia, Myanmar, Vietnam, and Timor-Leste.
The Philippines also gave POGOs legitimacy by issuing official licenses to conduct online gambling in so-called pre-regulated markets. All of these POGO licenses have been cancelled, but operators have swiftly moved to acquire online gambling licenses from other jurisdictions such as Anjouan, Kahnawake, Tobique or Vanuatu. Previous grey market licensing hotspots such as Malta or the Isle of Man have increasingly lost traction with these types of operators due to the stricter checks carried out by them, leaving lower tier jurisdictions to benefit from the Philippine POGO exodus.
Despite the Philippines government’s efforts to shut them down, POGOs have reportedly maintained a presence by going underground. Recent raids in Cebu and Pasay City unearthed illegal POGO operations, some even posing as legitimate businesses. More than 10,000 POGO workers have had their visas downgraded, and many are expected to be deported, but as of September, a majority of these workers remain in the country.
Experts like Camba suggest that POGOs may be shifting strategies by diversifying into other industries. These operators are adept at exploiting corrupt political systems and could transition into other businesses such as Business Process Outsourcing (BPO), which shares many infrastructural similarities with POGO operations. The Philippines, with its existing infrastructure and low labor costs, is seen as a favorable location for such transitions, allowing POGOs to evade authorities while maintaining a semblance of legitimacy. The country has been a hub for legitimate BPO companies for many years, making it an ideal cover for illegal activities.
Senator Hontiveros remains vigilant, advocating for stronger enforcement of the POGO ban, yet she and others fear that the systemic corruption entrenched in the Philippines may hinder true reform. This sentiment is echoed by Chester Cabalza, the Founder and President of International Development and Security Cooperation (IDSC), a Manila-based think tank, who describes POGOs as “Trojan horses” infiltrating various sectors of the economy, leading to a range of illegal activities beyond gambling, including online fraud, espionage, and human trafficking.
According to industry insiders in the Philippines, there are concerns that POGOs may relocate to countries with more lenient regulations. Some are known to have gone to Cambodia already, with Myanmar also being mentioned. Timor-Leste has emerged as another possible destination, where Philippine Justice Secretary Jesus Crispin Remulla recently warned local authorities about the potential risks of hosting POGO-related operations. The appeal of Timor-Leste lies in its strategic location near the Philippines, Indonesia, and Australia, making it a convenient hub for POGO operations.
Reports indicate that Chinese construction companies have been instrumental in helping POGOs establish their operations in Southeast Asia, providing the necessary infrastructure for these businesses to thrive. Some of the POGO compounds are massive in size and provide work and living spaces for thousands of people. This model has been seen not just in the Philippines, where POGO island is the most visible example of it, but also in countries like Myanmar, Cambodia, Malaysia, and Thailand, and it’s likely that the same tactics could be employed in Timor-Leste.
The Philippine government’s “Task Force POGO Closure,” which includes agencies such as the Department of Justice and the Bureau of Immigration, has ramped up efforts to tackle the issue, downgrading workers’ visas and enforcing deportation orders. However, as Camba points out, tracking the full extent of the POGO problem is difficult due to the wide range in size and scale of these operations, which vary from small setups with 10 workers (often in private condos) to large enterprises with over 1,000 employees. This makes it challenging to establish a clear baseline for measuring the government’s success in eliminating POGOs.
The POGO phenomenon highlights the complexities of tackling organized crime in the Philippines, where corruption, poverty, and a compromised political system create fertile ground for illicit operations. As the crackdown continues, it remains to be seen whether the government’s efforts will result in the true eradication of POGOs or merely drive them further underground or into new territories.
In the coming months, the Philippine government’s resolve will be tested, as POGOs explore every avenue to continue their operations, whether by rebranding, relocating, or diversifying. What is clear is that this issue extends beyond gambling and has deep implications for national security, organized crime, and the integrity of the country’s legal and political systems.
