The Philippine Amusement and Gaming Corporation took a big step forward by approving online casino operators to provide number games, like PCSO E-lotto, to their customers. Discussions about this decision which was announced in a memo dated July 2, 2024 have been sparked by industry participants and the general public especially in light of the continued prohibition on POGO. Although this development gives gaming operators new opportunities it also raises questions about possible social effects particularly for the younger audience.
PAGCOR’s memorandum specifies that number games, such as lotteries, can be offered by electronic gaming operators. However, these games must not utilize the same drawing devices, tools, or equipment currently employed by the Philippine Charity Sweepstakes Office (PCSO) in its lottery draws. This distinction is crucial in maintaining the integrity and uniqueness of PCSO-operated games.
The memorandum, signed by PAGCOR Assistant Vice President Jeremy Luglug, also sets a minimum bet amount for these number games at PHP 5. Additionally, operators looking to offer these games must pay a substantial application fee of PHP 200,000 for a two-year gaming license. Furthermore, they are required to provide a cash deposit of PHP 200,000 per gaming venue, ensuring that only serious and financially capable operators enter the market.
One of the critical aspects of PAGCOR’s memorandum is the revenue-sharing model established for these online number games. PAGCOR will receive 15 percent of the gross gaming revenue from live-streamed games. For random number generator (RNG)-based games, PAGCOR will initially receive a 35 percent share from July to December 2024. This rate is set to decrease to 30 percent starting in January 2025.
This revenue-sharing model highlights PAGCOR’s strategic approach to maximizing its earnings from the online gaming sector while allowing operators to benefit from a slightly reduced share rate in the long term. This decision is likely aimed at encouraging more operators to enter the market and sustain their operations over time.
The decision to allow online number games has garnered mixed reactions from various sectors. Nicasio Conti, CEO of the think tank Capstone-Intel Corp., expressed concerns about the broader implications of this move. In an interview with The STAR, Conti highlighted that while developed and developing countries are increasingly leveraging the internet for positive and constructive purposes, the Philippines appears to be moving in the opposite direction by expanding internet-based gambling.
Conti, who previously served as the commissioner of the Presidential Anti-Graft Commission and the Presidential Commission on Good Government, argued that PAGCOR should restrict gaming activities to integrated resort casinos and hotels, which primarily cater to foreign tourists. He emphasized the need to protect the internet from becoming overly saturated with gaming content, particularly given the high number of young Filipinos who spend considerable time online.
Conti’s concerns extend to the potential social impact of online gaming, particularly on children and adolescents who are vulnerable to gambling addiction. He has called for stricter regulations on gaming advertisements in both mass media and social media platforms, suggesting that these ads could further exacerbate the issue by normalizing gambling behavior among young people.
The decision to allow online number games comes in the wake of the ongoing ban on Philippine Offshore Gaming Operators (POGOs). This ban was implemented amid growing concerns over the social, economic, and security implications of POGOs, particularly their association with illegal activities, including money laundering and human trafficking.
By rebranding POGOs as internet gaming licensees and introducing a more regulated framework for online gaming, PAGCOR appears to be attempting to mitigate these concerns while still capitalizing on the lucrative online gaming market. However, this move also underscores the balancing act that regulators must perform in promoting economic growth while safeguarding public welfare.
PAGCOR’s decision to allow online number games represents a significant shift in the country’s approach to online gaming regulation. As more operators enter the market and the revenue-sharing model takes effect, the online gaming landscape in the Philippines is poised for further growth. However, this growth must be accompanied by robust regulatory measures to address the potential social risks associated with online gaming, particularly among younger and more vulnerable populations.
Moving forward, it will be crucial for PAGCOR and other regulatory bodies to closely monitor the impact of these new policies on both the gaming industry and society at large. This includes assessing the effectiveness of revenue-sharing models, ensuring the integrity of gaming operations, and implementing measures to protect individuals from the potential harms of online gambling.
The allowance of PCSO online lotto by PAGCOR amid the POGO ban is a noteworthy development in the Philippine gaming industry. While it offers new opportunities for gaming operators and potential revenue streams for the government, it also raises important questions about the social implications of expanding online gambling. As this new policy unfolds, it will be essential for all stakeholders to work together to ensure that the benefits of online gaming are balanced with the need to protect the public from its potential risks.
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