OpinionsEcon 101Who needs POGOs?

Who needs POGOs?

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Philippine Offshore Gaming Operators (or POGOs) who provide a variety of online gaming services to customers outside the country, are managed and regulated by the Philippine Amusement & Gaming Corp., a state-owned enterprise which both operates a number of individual casinos, and regulates privately-owned casino operators.

Online gambling is not available to customers based in the Philippines, and websites of such firms are blocked, however, POGOS have grown rapidly by targeting Chinese customers, and employing Chinese staff.

Online gambling remains illegal under Chinese law.

China wants the Philippines to halt all online gambling operations, after linking the industry to crimes such as money laundering, kidnapping, and extortion.

Players came mostly from China, but there have also been Chinese clients from Taiwan, Hong Kong, Singapore, and the United States.

Real estate and other Philippine businesses are booming due to online gambling operations.

Online gambling entails typical gambling games like poker, blackjack, and roulette but facilitated by a virtual dealer or televised dealer, accessed via an online connection.

During President Duterte’s visit to China this week, he is expected to intercede on behalf of POGOs, which are the Philippine-based backroom operations of online gambling sites that service Chinese players on the mainland.

Chinese officials know that these firms target the mainland and thus, skirt the core of the Chinese gambling ban.

But the rise of the POGOs is also a lesson for the Philippine government and industry on how to not disregard the social effects of large flows of Chinese migrant workers, whether for temporary employment or otherwise — especially in sectors such as tourism or construction.

POGOs primarily provide marketing, customer service, and IT support for online gambling sites, mainly by hiring Chinese employees.

The Philippine government estimates there are about 130,000 of these imported workers in the country, but the number could easily be twice that. POGOs are primarily located in Manila and Makati.

Although POGO workers do not take jobs from Filipinos because of the Mandarin language requirement, this is not the only context for negative effects of their stay.

Until recently, income taxes were not being collected from POGOs, as PAGCOR had been too lenient or negligent of its duties.

Are POGOs here to stay?

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Author’s email: [email protected]

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