• China has insisted that PAGCOR shut down all online gambling websites
• PAGCOR official argues that there is no reason for this to happen
• Operators, such as Megaworld, assure press their exposure in the conflict is minimal

PAGCOR official Victor Padilla has responded to Beijing demands to start shutting down online gambling properties in the Philippines, dismissing the idea.

PAGCOR Plays Down Chinese Fears for Worker Exploitation

In the midst of a scandal between China and the Philippines over the exploitation of Chinese workers in offshore gaming hubs in the Philippines, the Philippine Amusement and Gaming Corporation (PAGCOR) has said that the fears and rhetoric used by China were blown out of proportion.

Despite raising tension, PAGCOR’s Victor Padilla, a senior manager for the policy and offshore gaming licensing division, spoke to the House during a 2020 budget meeting, explaining that the recent comments of the Chinese Foreign Ministry were an overreaction.

Recently, Geng Shuang, a spokesperson for the Ministry, said that the Philippines should seek to restrict all online gambling – specifically in the areas where Chinese gamers were concerned. Beijing has chosen the gunk-ho approach after establishing that a percentage of Macau’s gamers may now be rushing off to offshore venues in the Philippines to avoid taxation.

Addressing the accusations, Mr. Padilla explained that the Philippines-licensed online operators weren’t breaching any law – whether that was local or international – and their products did not extend to countries where gambling was banned.

He further addressed the treatment of Chinese workers who, Beijing officials said, were exploited, but Mr. Padilla downplayed this statement by arguing that it was simply a matter of “perspective.”

No More Licenses for Philippines Companies

Yet, while the conflict is ongoing, PAGCOR stated last week that it would continue issuing licenses to offshore operators, collectively known as POGOs, so as to prevent further fraction with China. The move was directly linked with the comments of a Chinese embassy spokesperson, who reiterated the stance of Beijing, i.e. that Chinese nationals were mistreated and exploited.

The spokesperson cautioned the Philippines government to move on and introduce “concrete and effective measures to prevent and punish the Philippine casinos, POGOs and other forms of gambling entities for their illegal employment of Chinese citizens and crack down related crimes that hurt the Chinese citizens”.

A panic has seemed to spread across the region. The Philippines and Cambodia have been too of the most promising markets in the region, but Cambodia is also pulling out of the online gambling market citing criminals gangs that have been exploiting people as the main reason for the decision.

Mr. Geng also added that ultimately, China would want to see the Philippines and Cambodia ban the activity completely. Yet, one cannot help but wonder if these two countries are out of the picture, then Macau – which is directly feeding into the Chinese economy – would gain even more momentum.

Operators Remain Confident in Face of Trouble

Philippines gaming giant Megaworld has also been prompted to make a statement in light of the spreading Chinese hostility towards the gaming sector. According to the company, the ongoing crackdown on POGOs won’t necessarily hurt the company’s bottom line.

Cited by Bloomberg, Andrew Tan, Chief Strategy Officer at Megaworld, said that the ongoing clamp down wouldn’t hurt the company as its exposure was limited.