PAGCOR to Reduce Fees to Boost Gaming Industry

PAGCOR Cuts License Fees to Boost Gaming Industry Competitiveness and Curb Illegal Gambling

PAGCOR’s latest move aims to invigorate the gaming industry in the Philippines. With proposed reductions in license fees and taxes, the Philippine Amusement and Gaming Corporation (PAGCOR) seeks to level the playing field, attract more investors, and curb the flourishing illegal gambling market. But how will these changes impact the landscape of Philippine gaming?

PAGCOR’s Strategic Fee Reduction to Attract Investors

PAGCOR has announced a significant reduction in gross gaming revenue (GGR) rates and license fees for land-based and integrated resort operators, effective by 2025. Chair and CEO Alejandro Tengco confirmed the decision during his speech at the Inside Asian Gaming Academy Summit in Pasay City, detailing that fees for land-based casinos would be reduced by 30%, while integrated resorts offering online gaming services would see a 25% fee cut.

This bold move comes as part of PAGCOR’s broader strategy to align the Philippines with global industry standards, making it a more attractive destination for investors. “By lowering our license fees, to be at par with the global industry standards, we hope to attract and keep more investors in place,” Tengco stated.

Tackling the Grey Market: A Key Objective

One of the primary motivations behind these fee reductions is to combat the growing influence of the illegal gambling market in the Philippines. Tengco highlighted that many licensed operators were struggling to compete with unregulated, underground entities that have flourished due to more favorable cost structures and less stringent oversight.

“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 noted.

The lower fees are expected to provide a lifeline to struggling operators, allowing them to stay competitive while ensuring compliance with Philippine laws. By offering a more attractive regulatory environment, PAGCOR hopes to draw business away from the shadows and back into the legal, regulated space.

Sustained Growth and Revenue Targets

PAGCOR’s proactive approach comes at a time when the Philippine gaming industry is showing signs of robust growth. The agency recently reported a gross gaming revenue of PHP 89.23 billion (US$1.56 billion) for Q2, reflecting a 32.3% year-on-year increase and a 9.21% rise compared to the first quarter of 2024. This impressive growth is largely attributed to the burgeoning e-games sector, which saw a staggering 525% increase from PHP 4.93 billion year-on-year.

The regulator aims to achieve an ambitious industry GGR target of PHP 335 billion (US$5.96 billion) by the end of 2024, bolstered by these strategic reductions and the ongoing expansion of the local gaming market.

Future Prospects: Aligning with Global Standards

PAGCOR’s decision to cut fees aligns with a broader trend of modernization and competitiveness within the global gaming industry. By reducing the financial burden on licensed operators, the Philippines aims to create a regulatory environment that is both sustainable and competitive on an international level. This could pave the way for increased foreign investment, the introduction of innovative gaming products, and enhanced consumer protections within the market.

PAGCOR’s fee reduction strategy marks a decisive step toward revitalizing the Philippine gaming industry. By slashing fees for land-based casinos and integrated resorts, PAGCOR aims to undercut the illegal gambling market and draw more legitimate operators into the fold. This proactive approach could not only stabilize the industry but also position the Philippines as a leading player in the Asian gaming sector. As PAGCOR pushes forward with these reforms, the coming years will be crucial in determining whether these measures can deliver the desired boost to the industry while safeguarding the integrity of the gaming environment.