Philippine Senator Sherwin Gathchalian, a strong opponent of offshore gaming operators in the country, claims that no background checks are being conducted on individuals who set up offshore gaming operators (IGLs, formerly known as POGOs) or their employees.
Speaking to AGB, the Senator indicated that “the minimum requirement for PAGCOR is just capitalization […] if you’re incorporated, you fulfill the minimum qualification”.
For years the Senator has been rallying against POGO operators, citing raids on facilities which have netted thousands of workers and uncovered dozens of scams and other illegal activity taking place on their premises.
Gatchalian takes aim at more than just the nation’s gaming regulator PAGCOR (Philippine Gaming and Amusement Corporation), indicating that the Department of Immigration and the Department of Foreign Affairs are also partially to blame, given their role in issuing visas.
“There should be some form of background check, for example, if they have cases in Interpol or cases in other countries. Because of the sheer volume of these individuals, Chinese in particular coming to the Philippines, I don’t think they do any background checks. So, they issue visas, and these applicants claim that they will be working in IGLs, so they’re issued working permits, but eventually it’s discovered that they have a warrant of arrest.”
The politician furthers “PAGCOR doesn’t do any background check. As long as you have visa and working permits, you’re good to go, you can already start working in these POGO facilities”.
“In the Senate, the majority of the Senators want to ban POGOs”
Senator Sherwin Gatchalian
Papers issues
Senator Gatchalian and Senator Rita Hontiveros have been some of the most vocal opponents of the offshore gaming operations, going as far as calling for an investigation into foreigners obtaining Filipino citizenship through allegedly falsified documents.
This particular aspect has been in the spotlight, given the recent case of “POGO Mayor” Alice Guo, the Mayor of the Bamban region in Tarlac, where the most recent high-profile raid was conducted on a POGO.
Guo is suspected of lying about her background, with recent Senate hearings even calling into question whether she could potentially be a Chinese asset, having purportedly obtained citizenship improperly. Senator Hontiveros, on Tuesday, claimed that Guo had ties to criminals, including multiple foreign nationals allegedly involved in the multi-billion-dollar money laundering case in Singapore.
Hontiveros, quoted by media, claimed “she (Guo) doesn’t even have proper records in the Philippines”, while numerous individuals listed as incorporators in Guo’s Baofu Land Development company were named in the Singapore case.
The Philippine National Police is reportedly investigating the claims.
The issue of proper documentation is one hindering extradition of those involved in illegal POGO operations. Even after apprehending the alleged culprits in such illicit offshore operations, the Philippines is finding it tough to get international ‘culprits’ out of the country, with Gatchalian indicating there are POGO-specialized lawyers, who are shared between multiple POGO operators, aiming to stop extraditions, particularly to China.
Legislation
Gatchalian told AGB that “in the Senate, the majority of the Senators want to ban POGOs”. However, the official also noted that its Ways and Means Committee Report received about half of the Senate’s approval. Despite the split, the anti-POGO group is now pushing legislation for a full POGO ban.
Gatchalian indicates that the House of Representatives is also hearing a bill aimed at banning POGOS, noting “there’s some push in the lower House to ban POGOs, and that bodes well with us”.
AGB had previously spoken with Congressman Gus Tambunting, who indicated that the House of Representatives was split 50/50 in regards to whether to keep POGOs or not.
The tax argument
While an outright ban is one way to go after the bad actors, other actions – such as that undertaken by PAGCOR to increase the capital requirements and make IGLs (formerly called POGOs) submit new applications (resulting in a significant drop in the number of licensed operators) – could also be effective.
One such method is similar to that applied to Al Capone, going after the culprit by proving they have avoided taxation.
“In the hearing we conducted in the past, we also found that POGOs are undervaluing their tax payments,” notes the Senator. The politician indicates that both franchise tax and income tax are calculated by looking at the operators’ gross gaming revenue, with reporting to different agencies proving incongruous.
“We found out that the gross gaming revenue that they (POGOs) declare with the BIR (Bureau of Internal Revenue), which is the tax authority, and they declare with PAGCOR are different”.
Gatchalian says that there is a disconnect between PAGCOR and the BIR, meaning the tax authority doesn’t have all the information.
“So, they rely on self-declaration. And we discovered that the two declarations are different, BIR being grossly undervalued”.
Penetration of enforcement agencies
One primary issue that Senator Gatchalian aims to highlight is how well criminally linked POGO operators know what they’re getting into.
“They studied the terrain very well, they studied the Philippines very well, they studied the justice system, they studied our enforcement system, they studied our political system”.
Gatchalian states that his committee’s research has found that “criminal syndicates involved in POGOs […] have already managed to penetrate the higher echelons of the enforcement agencies” in the Philippines – mostly through bribes or monthly allowances, he claims.
The politician indicates that this penetration means illegal operators feel comfortable in setting up shop, buying villas in private compounds (which the official wants overseen).
“They’re willing to put in the money because they know that they can minimize risk and they have options to protect themselves, whether it’s from the enforcement agencies or from the politicians themselves”.
Gatchalian claims that such influence is deeply ingrained, stating: “They know that they have protection at the upper echelons of government”.
