THE Philippines could capture a major share of the global offshore online gaming market due to the favorable legal environment and the low cost of setting up operations, a government think tank said.
The National Tax Research Center (NTRC) said in a research paper, “Profile and Taxation of Philippine Offshore Gaming Operations” (POGOs) that the offshore gambling market could be a “promising revenue-generating industry.”
From 2016-2018, PAGCOR collected P12 billion from POGOs via application and license fees as well as its share of gross gaming revenue.
Globally, NTRC said the value of the offshore online gaming market is expected to exceed $60 billion, led by countries in the Asia Pacific.
“Given the advantages of the Philippines in terms of availability of office space, labor, tax incentives and technology, it is not far-fetched that the country will be a major player in offshore gaming worldwide,” it said.
However, the study noted that the emerging industry still needs to improve, particularly on tax compliance, its safeguards and audit, among others.
The study said the Philippines is a favorable country to set up an offshore gaming since the activity is legal while real estate and operational costs are low.
The country is well-placed to attract gaming firms from China, Macau, Japan and South Korea.
Within ASEAN, the Philippines is the first and only one to license to online or offshore gaming, according to the NTRC.
In a separate study, “Profile and Taxation of the Integrated Resort (IR) in the Philippines,” the think tank said the establishment of IRs attracts tourism, which helps the economy in terms of investment, revenue and job creation.
An IR is an “all-in-one” comprehensive entertainment center with both gaming and non-gaming segments catering to locals and foreign tourists. These establishments offer casinos, slot machines, hotels, restaurants and shopping centers, among others.
According to the study, the IR industry work force increased to over 23,000 in 2018 from 20,000 in 2017 in four major IRs alone, Resorts World Manila, Solaire Resort and Casino, City of Dreams and Okada Manila, it said.
NTRC also found that these firms were able to grow their total gross earnings to P138 billion in 2018 from P91 billion in 2016, of which, 89% was generated by gaming.
However, it noted that “it is important that the country’s business environment remains attractive with all the fundamental economic and regulatory policies in place to increase business momentum.”
The Finance department has been running after tax-evading POGOs and their service providers. This year, the government ordered the temporary closure of three firms found to be unregistered with the Bureau of Internal Revenue (BIR).
The BIR earlier reported that it collected P1.6 billion as of August this year from withholding taxes of POGO workers. — Beatrice M. Laforga