PAGCOR Announces Significant Rate and Fee Reductions for Philippine Operators

PAGCOR (Philippine Amusement and Gaming Corporation) has announced a notable slash in the country's license fees and gross gaming revenue rates. The calculated move will lower fees from 35% to 25% for integrated resort operators offering online gaming services. The rate will go down to 30% for brick-and-mortar casinos. These changes mark a significant decrease from the 50% rate put into effect by the body's Chairman and CEO, Alejandro Tengco, in August 2022.

During his speech at the IAG (Inside Asian Gaming) Academy Summit in Hilton Manila, Tengco explained, "By lowering our license fees to be at par with the global industry standards, we hope to attract and keep more investors in place."

Explosive Industry Growth

PAGCOR underscored the exponential growth of the eGames sector, which covers eCasino, eBingo, specialty games, and sports betting. In Q2, the niche recorded a staggering 525% revenue increase. This figure is expected to remain on an upward trajectory until the end of the year, generating about PHP100 billion (around 1.76 billion USD). The growth is chalked up to the sector's ability to adapt to shifting client needs and technological advances.

The fee adjustment is also meant to bolster legal gambling and encourage illegal operators to adopt regulated services. Currently, the Philippines' grey market is estimated to generate more revenue than the legal gambling sector.

"The observation I made upon my assumption in the office was that the grey market or the underground market was doing so well, way, way better than PAGCOR. And licensees were closing shops, primarily because they could not compete anymore with the grey market," Tengco emphasized.

Investments in Land-Based Gaming

The reduced license fees will also affect brick-and-mortar casinos, lowering them from 35% to 30%. PAGCOR plans to add nearly 2,000 slot machines to its Casino Filipino venues by mid-September 2024. These investments in gaming infrastructure are the first phase of a more extensive initiative to add 3,341 new machines. The additions are meant to revamp the gaming experience and charm players and potential investors.

Forward Outlook

Further down the road, PAGCOR intends to privatize its casino operations starting in May 2025. The initiative will involve 45 properties estimated to generate PHP81.27 billion (1.44 billion USD) by Q4 of 2024. This strategy will transform the body's purpose from operation to regulation, improving the industry's proficiency and lucrativeness. These adjustments are altogether meant to position the Philippines as a premier gaming destination in the global market.