President Ferdinand Marcos Jr. has signed an executive order prohibiting all offshore gaming operations within the country, including Philippine offshore gaming (POGO) and internet gaming. He announced the ban on all POGOs in his recent State of the Nation Address, directing the Philippine Amusements and Gaming Corporation (PAGCOR) to phase out all POGO operations by the end of the year.

Marcos attributes this decision to the government’s commitment to enhancing public safety, national security, and order. The president emphasized that POGO activities bring considerable risks, citing rising crime rates, social unrest, and exploitation. According to him, all these far outweigh any economic or social gains.

What’s the Scope of the Ban?

President Marcos signed Executive Order 74 on November 5, a move that places a blanket ban on all offshore gaming in the Philippines. This new prohibition also covers POGO operators licensed by PAGCOR and POGO gaming representatives acting on behalf of offshore licensees in the Philippines.

Additionally, POGO support providers, such as business process outsourcing firms (BPOs), have also been deemed illegal by the new regulation. This includes Philippine-based companies that supply key services to offshore gaming operators. These businesses support live streaming, IT services, strategic operations, and gaming software.

The offshore gaming services and operations affected by this ban include online games of chance, specifically random number generator games, live-streamed electronic casino games, and online sports betting. These games exclusively target foreign players outside the Philippines and are offered through online channels.

Executive Order 74 also includes Internet gaming licensees (IGLs), the newer term for Philippine offshore gaming operators (POGOs). This definition now extends to local gaming agents or recognized businesses of good standing representing foreign IGL licensees in the Philippines. Additionally, the ban covers authorized providers of gaming content and support. These officially established companies supply the necessary parts and services for internet gaming operations.

Who’s The Target?

President Ferdinand Marcos’ directive also directly targets any POGO, IGL, or other offshore gaming operator without valid authorization. The Executive Order now classifies these unlicensed operators as illegal gambling entities, and they will face an intensified crackdown.

All new applications for permits, licenses, or authorizations for IGL, POGO, and other offshore gaming operations are also on hold. This halt applies to any requests to start or renew these offshore gaming licenses.

The ban also applies to authorizations for related or supporting services connected to offshore gaming. This comprises services regulated not only by PAGCOR but also by other licensing bodies within the Philippines. Therefore, all license renewals now cease to exist, and any operations holding licenses or permits must complete their business and shut down by December 31, 2024.

What’s the Justification?

President Marcos justifies the ban by pointing out the harmful impact that POGO and IGL operations have on the Philippines’ reputation. The Executive Order argues that the risks tied to offshore gaming discourage foreign investment and tourism. In turn, this harms the government’s efforts to promote the Philippines as a safe and attractive destination for both investors and tourists. The order also highlights that offshore gaming activities have led to social instability, rising crime rates, and exploitation of vulnerable groups.

Meanwhile, the Executive Order encourages a balanced approach by urging private companies to show leniency in handling contract terminations for licensed offshore gaming operators. President Marcos urged businesses to waive fees, penalties, interest, or additional charges linked to ending services or agreements. These include leases, janitorial services, security, internet, and electricity.?

Further, Executive Order 74 includes plans for employment recovery and reintegration to assist workers affected by the ban in finding new jobs as quickly as possible. The order recommends that teams enforce the ban on offshore gaming operations before the deadline and support workers needing replacement jobs. Local governments can now implement the ban within their areas and report any suspicious activities related to offshore gaming.

Two TWGs at the Helm of the Ban’s Enforcement

Executive Order 74 has tasked two technical working groups (TWGs) with developing a detailed plan to effectively implement and enforce the ban on offshore gaming activities. They are:

a) The Employment Recovery and Reintegration

This group is under the Philippine Amusement and Gaming Corporation (PAGCOR) and co-led by the Department of Labor and Employment. Its primary role is to oversee efforts to lessen how the new regulation will impact on the affected economic segments. This group will assist displaced Filipino workers by providing programs for reintegration, skill development, and retraining to help them transition into new roles.

b) Anti-Illegal Offshore Gaming Operations

This working group focuses on strengthening efforts to target unlicensed offshore gaming operations. The Presidential Anti-Organized Crime Commission (PAOCC) and the Department of Justice (DOJ) are in charge of this group. The group will take legal action against violators, deport foreign workers in the country’s offshore gaming sector, and ensure effective enforcement of the ban. All these will happen until all POGOs and other offshore gaming operations cease to exist in the nation.

POGO’s Contribution is A Drop in the Economic Bucket

Earlier, Secretary Arsenio Balisacan of the National Economic and Development Authority stated that POGOs contributed less than 0.5% of the country’s GDP in 2022. This is the estimated loss the government would face if the industry is banned.

Further, The Department of Finance cited data from the Department of Labor and Employment and PAGCOR, reporting that there were 66,547 workers in the POGO sector as of 2023. Of these, 41,347 were foreign nationals, while 25,200 were local citizens. The government began identifying workers from POGOs who would lose their jobs after President Marcos ordered all offshore gaming operations in September.

President Marcos had previously pointed to various criminal activities connected to the industry. He specifically mentioned scams, money laundering, human trafficking, kidnapping, prostitution, murder, and torture. So, due to their links to these illegal activities, authorities have already carried out raids on several POGO companies in Tarlac, Bamban, Porac, and Pampanga.

The Ban Has a Broader Impact

President Marcos also instructed the Philippine Drug Enforcement Agency, PAOCC, National Bureau of Investigation, and the National Police to strengthen their initiative against unlawful offshore gambling operations. His Executive Order assigned the Department of Human Settlements and Urban Development to work with homeowners’ trade bodies to inhibit the spread of gaming operations in residential areas.

The agencies will also report suspicious activities to the Anti-Illegal Offshore Gaming Operations TWG. Meanwhile, the Department of Tourism will ensure its sector doesn’t facilitate offshore gaming activities. Executive Order 74 also directs the Bureau of Internal Revenue and PAGCOR to speed up the collection of fees and taxes from the offshore gaming sector in line with existing laws.

All national government-owned corporations, agencies, and other public entities are required to assist in carrying out Executive Order 74. The president also encourages private entities and local government units to help enforce the shutdown of POGO and offshore gambling activities.