Article By Stephen Crystal
For three years, the Philippines sat on the Financial Action Task Force (FATF) grey list—a designation that signals high-risk jurisdictions with financial compliance concerns. The consequences were real: foreign investors hesitated, regulatory bodies tightened their grip, and the gaming industry faced mounting scrutiny.
But now, the country has turned the page. With its recent removal from the FATF grey list, a flood of inquiries is hitting the Philippine Amusement and Gaming Corporation (PAGCOR). The catalyst? The controversial—and strategic—ban on Philippine Offshore Gaming Operators (POGOs), a move that, according to PAGCOR Chairman and CEO Alejandro Tengco, was instrumental in achieving financial credibility.
The result: A surge in online gaming license applications, renewed industry confidence, and the promise of a revitalized gaming sector. But the real question remains—has the Philippines truly cleaned up its act, or is this just a temporary reset?
The Fallout and the Opportunity
The decision to eliminate POGOs was not without consequences. At its peak, offshore gaming was a booming sector, bringing billions in tax revenue while attracting international operators looking for a regulatory safe haven. But it also became a lightning rod for crime, fraud, and international scrutiny.
PAGCOR’s pivot—banning offshore operators while opening the door for a new wave of regulated online gaming applicants—is a high-stakes gamble. The agency is now balancing the need for strict compliance with the desire to reignite gaming sector growth.
With gross gaming revenue (GGR) hitting **$7.16 billion in 2024—a nearly 25% increase from the previous year—**the numbers suggest the market is poised for expansion. But will the new era of Philippine gaming be free from the same risks that put it on the FATF list in the first place?
The “Special Class” BPO Play
While POGOs may be history, the business process outsourcing (BPO) industry has quietly stepped into their place—offering backend support for gaming platforms without directly engaging in gaming operations.
Since the grey list removal, PAGCOR has seen a surge in applications for special class BPO licenses, a workaround that allows gaming-adjacent companies to remain operational while complying with new regulatory standards.
This shift raises an intriguing question: Is the Philippines moving toward a cleaner gaming model, or is it simply repackaging the old system under new branding?
Policy Adjustments: A Double-Edged Sword?
PAGCOR’s latest policy changes include lowering remittance rates for online gaming operators from 35% to 30%—a move designed to boost sustainability and competitiveness. The agency is also enforcing a mandatory allocation of gross gaming revenue (GGR) to national development projects, a nod to balancing profitability with social responsibility.
But with these changes comes increased scrutiny. The Philippines is walking a fine line between market growth and regulatory compliance. With a long history of offshore gaming scandals, investors and industry stakeholders are watching closely to see if the country can maintain its newly restored financial credibility.
The Next Chapter: Boom or Bust?
The Philippines is once again a hotbed for gaming investment, but the industry’s future hinges on whether PAGCOR’s new regulatory framework can hold up under pressure.
Will the country’s new policies attract the right kind of operators, or will they pave the way for another wave of compliance headaches?
For now, one thing is certain: the world is watching.
