President Ferdinand R. Marcos Jr., addressing the nation during his third State of the Nation Address (SONA), announced a resolute ban on Philippine Offshore Gaming Operators (POGOs). This move comes after escalating controversies linked to the sector, ranging from financial scams to violent crimes, have sparked widespread demands for action.

Presidential Directive: Immediate POGO Ban

Highlighting the gravity of the situation, President Marcos detailed an extensive list of crimes associated with POGOs, including money laundering, human trafficking, and even murder. “The grave abuse and disrespect of our system must stop. It is now imperative to stop this chaos that is wreaking havoc on our society and desecrating our country,” he declared, initiating an immediate nationwide ban. The announcement was met with robust applause and strong support from attendees, reflecting the public’s growing unease with the offshore gaming sector.

Economic Impact and Policy Support

Key economic leaders, including Finance Secretary Ralph Recto and NEDA Secretary Arsenio Balisacan, have endorsed the ban, stressing that the minimal economic contributions of POGOs do not justify the severe social and reputational damages they cause.

Balisacan pointed out that the sector contributed less than half a percent to the GDP in 2022, a small price to pay for mitigating broader economic and social risks. He emphasized the potential regulation of cross-border tourism by China as a significant factor, which could lead to more profound economic repercussions if POGOs were allowed to continue.

Legislative and Social Repercussions

Following the President’s directive, the Philippine Amusement and Gaming Corporation (Pagcor) has been instructed to shut down all POGO operations by the end of the year. Additionally, the Department of Labor and Employment is tasked with facilitating support for the nearly 40,000 workers expected to be displaced by this decision. Legislative leaders, including House Speaker Martin Romualdez, have pledged swift action to implement the necessary legislative changes to enforce this ban effectively.

Controversies and Legal Challenges

The push for a POGO ban gained momentum following several high-profile incidents, including raids on operations like CGC Technologies, which were found engaging in illegal activities far beyond their gaming remit. The industry’s linkage to a series of grave offenses prompted both chambers of Congress to delve deeper into these illicit activities, further fueling the call for a total shutdown.

Looking Forward

The decision to ban POGOs represents a significant shift in policy direction, prioritizing societal well-being and national security over economic gains from questionable industries. As the country moves forward, the focus will likely shift towards strengthening industries that offer more sustainable and respectable contributions to the economy and society.

Source:

President imposes ban on POGOs amid snowballing calls, pna.gov.ph, July 22, 2024.

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The latest regulatory move sees the national watchdog, the Philippine Amusement and Gaming Corporation (PAGCOR), prepared to issue show-cause orders and fines up to $50,000 to any POGO that has let third-party run operations under its own license. The news was first reported by Rappler, a media outlet that cited officials.

PAGCOR Tightens the Noose on POGOs

PAGCOR assistant VP for compliance Jessa Fernandez and Clark Development Corporation CEO Agnes Devanadera said that the new measure is because of a recent incident involving a POGO service provider that had its license revoked. The POGO in question was operating out of Sun Valley Clark and it was found to be in numerous breaches of existing law, although none specified the sub-licensure of its own license as one of the offenses.

PAGCOR has gone after CGC Technologies as a response to an investigation that Sun Valley Clark had been turned into a gaming hub where criminals would go to conduct unlawful business and set up their bases for schemes and frauds involving cryptocurrencies and human trafficking. However, the crackdown on Sun Valley Clark is related to the overall decision to take a harsher stance on third-party sublicensing by POGOs.

The Clark County Security Council spoke on Friday confirming that this issue has allowed criminals to set up shop in the jurisdiction and conduct business out of there, using POGO licenses as a cover. This will now be addressed with the full force of the law. POGOs have long been criticized for their questionable practices and accused of being conduits of social ills and crime.

Crime Bred Out of Unlawful POGOs

Most of this crime has targeted overseas customers, but in the meantime, many of the operators have been involved in human trafficking as they often attract workers from other countries in Asia and then hold them in captivity, offering nominal pay and substance. This form of modern slavery has had a damaging impact on the Philippines’ reputation and it has further exacerbated relationships with its neighbors, notably China.

PAGCOR has also recently responded and issued a public reprimand to a website that had hijacked a domain name of historic significance in the United States to beguile unwitting consumers into gambling with the illegal, unregistered, and in all likelihood – fraudulent gambling operator.

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Lawmakers in the Philippines are intensifying their focus on offshore gambling operators, commonly known as POGOs, and their regulatory bodies as they aim to crack down on the expanding web of cryptocurrency scams and the associated human trafficking networks.

During a recent inquiry held by the Philippine Senate Committee on Women, Children, Family Relations, and Gender Equality, attention was drawn to a raid conducted in early May at an approved POGO site located near the capital city, Manila. The operation resulted in the rescue of over a thousand victims of human trafficking from various Asian countries.

At the hearing, senators vehemently criticised officials from the Philippine Amusement and Gaming Corporation (PAGCOR), the regulatory authority overseeing online casinos in the nation.

Senator Sherwin Gatchalian expressed his concern over the international embarrassment brought upon the Philippines.

“This casts a negative light on us as the country becomes a hub for scams,” he said.

“POGOs are being exploited as fronts for fraudulent activities and human trafficking due to corruption within PAGCOR and its failure to fulfil its responsibilities.”

The victims involved in this particular case were trafficked from eleven Asian countries. One survivor, identified as Jason, whose real identity and nationality have been withheld for safety reasons, shared his experience with Voice of America (VOA) after providing testimony before the Senate committee.

Jason revealed that he had arrived in the Philippines under the impression of securing a legitimate marketing position, only to be coerced into executing cryptocurrency scams targeting American and Canadian men, posing as a woman.

Jason disclosed to VOA that when PAGCOR inspectors visited the POGO site on a weekly basis, approximately half of the trafficking victims would hide within the dormitories, drawing the curtains and locking the doors out of fear.

Senator Risa Hontiveros, the committee’s chairperson, has called for the banning of POGOs, emphasising that they serve as a legal facade for illicit hubs that evade regulatory scrutiny. She warned that if POGOs were allowed to continue operating unhindered, the prevalence of crypto-scams and human trafficking would escalate at an alarming rate, surpassing the government’s ability to combat them effectively.

During the hearing, PAGCOR officials acknowledged the presence of corruption within their organisation and conceded the need for enhanced regulations and monitoring. They also confirmed the immediate revocation of accreditation for the raided POGO site.

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