The Philippines’ offshore gaming industry still holds great opportunities despite the regulator having implemented rationalized, albeit, stricter regulations, says Winn Tech Inc. CEO.
In an interview with AGB, Wilson Fang, CEO of the remote slot solution provider Winn Tech, notes that the new regulations over the Philippines offshore gaming industry are “more adept at compliance and regulatory standards to show better transparency.” He believes regulation is essential to secure the industry’s further growth.
Winn Tech is the first remote slot solution provider under the REMOTE PLAY Operations in the country, which received accreditation from PAGCOR last April. Fang shares that he started the company with a vision to service a particular market looking for a product with better integrity.
As of January 2024, Winn Tech already teams with four casinos, including Rizal Park Hotel & Casino, D’Height Casino, Heritage Casino, and Royce Hotel & Casino in the Philippines with an RPSM (Remote Play Slot Machine) system. So far, offshore gaming has clients from South & North East Asia, some from Europe and Latin America.
This Offline-to-Online (O2O) business model is different from traditional online gaming, as Winn Tech has physical machines acquired from laboratory-tested slot machine manufacturers. Fang indicates that physical machines can be controlled with gadgets or smartphones, while e-games adopt the RNG software of virtual slots. Both are completely different concept in terms of technology and targeted market.
Wilson Fang believes that the availability of the machines is the key factor of the business, as the business model relies on volume, popular machine game titles, and a dynamic User Interface. In this context, Fang plans to have 1,000 REMOTE SLOT machines by 2Q 2024.
Regarding future growth, Fang explains that from a revenue standpoint, conventional slot machines achieve WUD (Win per unit per Day) at approximately $350 in the Philippines, as Winn Tech expects to have around WUD of $450 by elevating the machines’ utilization from 65 percent to 82 percent.
In this context, Fang emphasizes that the stability and reliability of PAGCOR and the current regulatory environment provide a clear direction on objectives and adherence.
On the other hand, Fang considers that undoubtedly the Philippines will be the largest gaming growth market this year. Meanwhile, the REMOTE PLAY license regime permits the Philippines’ gaming market to be well ahead of ASEAN countries as regulators allow innovation, and operators continue to develop the online space. This is on top of REMOTE PLAY license variants that cater to specific markets such as Slot Machine and Poker.
He recalls that the Cambodian gaming regulator mentioned the possibility of developing the iGaming sector, which also bears out that the Philippine market has some leading edge in this aspect.
Even though the market seems to be on the verge of an upswing, Winn Tech is still facing some challenges.
In the same interview, Fang notes that illegal slot machine operations in SEA countries pose some challenges, as “these operators can offer higher commissions or rebate programs to players without adhering to tax regulations, purchasing genuine slot machines, or complying with any local authorities. This puts us at a disadvantage in the competition”.
Fang mentions that, due to the rising marketing costs associated with offshore operations, the company has requested a tax reduction from PAGCOR. Currently, the tax rates for online gross gaming revenue (GGR) in the Philippines are relatively high, compared to some European countries that collect only between 5 percent and 10 percent from GGR.
According to the Department of Finance, the Philippine government raised approximately PHP 8.8 billion ($160.78 million) in tax payments from POGOs in 2022. The total figure was split between POGO tax payments, at PHP 4.35 billion ($79.48 million), and gaming taxes, at PHP 3.65 billion ($66.69 million).
With the anticipated business upswing on the horizon, Winn Tech hopes to capitalize on gaming’s next big wave. As an alternate product that fills in the gap of integrity that playing online is seemingly devoid of in some sectors of the world wide web, and a possible efficient re-purposing of idle areas of land-based casinos, Winn Tech is a partner of the future available today.