Duterte orders closure of ‘all online gaming’ firms

MANILA, Philippines (UPDATED) – Four months after he seemed to have changed his mind about his planned crackdown on the industry, President Rodrigo Duterte on Thursday, December 22, ordered the closure of “all online gaming.”

In a speech after signing the 2017 national budget, the President said: “I am ordering the closure of all online gaming [firms]. Lahat. Walang silbi ito. (All of it. It has no use.)”

He did not elaborate, but based on his previous statements, the President would be referring to online gaming companies.

Upon taking his oath of office as president on June 30, 2016, Duterte declared he wanted to stop online gambling in the Philippines. The statement triggered a downward spiral in the trading performance of online gaming firms, such as PhilWeb.

Roberto Ongpin, former chairman of PhilWeb whom Duterte vowed to destroy, even stepped down from his post and sold his entire 53.76% stake in the gaming firm to Gregorio “Greggy” Araneta III, son-in-law of the late President Ferdinand Marcos, for P2 billion. Araneta also has business interests in energy and property development. 

Ongpin’s moves were aimed at saving PhilWeb and over 6,000 jobs affected by the non-renewal of its gaming license.

But in August, the President indicated he had a change of mind, saying he would allow online gaming companies to operate again should they pay taxes correctly and avoid locations near schools and churches. (READ: Uncertainty hounds online gaming in the Philippines)

From the downward spiral of their trading performance, Duterte’s new remarks caused the share price of PhilWeb and Leisure & Resorts World Corporation – the only listed companies that operate e-Bingo outlets in the Philippines – to surge by 50%.

In October this year, Araneta met with Philippine Amusement and Gaming Corporation (Pagcor) officials to apply again for the renewal of PhilWeb’s license to operate e-Games cafes. (READ: PhilWeb’s new chief Araneta asks to renew license)

Another change of mind

On Thursday, however, Duterte cited the case of Jack Lam, the Macau-based gambling tycoon that government authorities have been hunting down over accusations he had tried to bribe Justice Secretary Vitaliano Aguirre II. (READ: Duterte orders arrest of Jack Lam)

With online gambling, government has no mechanism to strictly monitor it, Duterte said, thus his order to close the industry. 

He cited the weak leadership at the Philippine Export Zone Authority (PEZA), which deals with online gaming operators that set up in export zones. 

But shutting down the entire online gaming industry would mean foregone annual revenue of about P10 billion for state-run Pagcor.

To offset the losses, Pagcor Chairperson Andrea Domingo said they are eyeing profits from offshore gaming catered to foreigners.

This will be “from bigger casinos where they target only the foreign market,” Domingo had said.

“I want 100% verfication on all requirements. This venture will cover what we lose from e-gaming and e-bingos,” the Pagcor chairperson said.

For 2016, Pagcor expects a total income of P46.38 billion and plans to contribute P28.87 million for health projects. – Rappler.com