The Philippine government is considering a significant increase in taxation for online gambling operators, with Finance Secretary Ralph Recto indicating that rates could rise from the current 25 percent to as high as 40 percent of gross gaming revenue (GGR), according to local media outlet GMA News.
During the Post-State of the Nation Address (SONA) Discussions in San Juan City, Recto outlined several possible fee structures—including rates of 30, 35, or 40 percent—as authorities consider stricter regulation of the industry, following the Department of Health’s classification of online gambling as a “public health concern.”
The proposed hike is part of a broader initiative to generate PHP200 billion ($3.42 billion) in gambling-related revenues this year—split evenly between land-based operations and online platforms. Currently, integrated resorts offering online gaming services are charged 25 percent of their GGR in license fees.
This is the second time in recent weeks that Recto has raised the prospect of higher taxation for online gambling. Earlier this month, he stated that the government was studying further fiscal measures for the sector, which is already seen as one of the most heavily taxed in the world.
It is worth noting that, starting January 1st, 2025, the Philippine Amusement and Gaming Corporation (PAGCOR) lowered the license fee for integrated resorts’ online gaming operations to 25 percent. Prior to the cut, the rate stood at 35 percent—already down from a peak of 55 percent before PAGCOR Chairman Alejandro H. Tengco took office.
Recto has also noted that the Finance Department will coordinate with PAGCOR on the license fee issue.
However, the proposals have drawn criticism from legal and industry experts who warn that additional taxation could prove excessive and counterproductive. On July 13th, Tonet Quiogue, CEO of Arden Consult and a leading expert in gaming law, released a policy brief raising concerns about the proposed the hike. She cautioned that increasing the financial burden might drive operators toward grey or illegal markets.
Quiogue noted that licensed operators are already subject to steep tax obligations. According to her analysis, in 2025 the effective license fee imposed by PAGCOR averages 30 percent of GGR, down from historical highs of 47.5 percent. In addition, a 10 percent audit fee is applied to PAGCOR’s share—effectively another 3 percent of GGR—alongside a 5 percent franchise tax levied by the national government.
In total, the government collects approximately 35 to 38 percent of each operator’s GGR before operating costs or profits are factored in. Quiogue stressed that these taxes are based on gross revenue rather than net income, putting licensed operators at a disadvantage compared to businesses in other sectors.
Commenting on calls for stricter regulation of the online gambling industry, Recto acknowledged the regulatory challenges, noting that an estimated 60 percent of current online gambling activity in the country is illegal.
“I am not in favor of gambling. My advice: do not gamble,” he said. “But if people do, we’d rather regulate it than have them resort to illegal operations.”
He added that “everything is on the table” when it comes to future policy options, including restricting user cash-in hours and limiting online gambling platforms’ access to e-wallet services. However, he emphasized that any changes should be coordinated with PAGCOR in advance.
