Under the administration of former President Rodrigo Duterte, POGOs were seen as a strategic initiative to generate revenue and to tap into the lucrative regional gaming market. Given the restrictions and prohibition on gaming in many Asian jurisdictions, POGOs could attract players to offshore platforms operated within the Philippines, bringing in substantial revenue through taxes and licensing fees.

However, what began as a legitimate operation quickly deteriorated into a breeding ground for criminal syndicates to propagate illicit activities. This ultimately led to POGOs falling out of favour with the current administration, resulting in a blanket ban on all POGOs.

Dark side of POGOs

Beginning in earnest under former President Rodrigo Duterte in 2016, POGOs flourished and contributed to the Philippines’ national GDP in terms of tax collection, licence fees, office rental, and employees’ salaries. At their peak, there were some 300 licensed POGOs operating in the Philippines, before stringent tax regulations and the COVID-19 pandemic drove many of these operators underground.

The largely unregulated nature of POGOs’ businesses’ made them susceptible to being used as a convenient front by organized crime syndicates to cover up illicit activities such as human trafficking, scams, and money laundering. Additionally, foreign workers of POGOs were being increasingly targeted in kidnap-for-ransom attempts.

In March this year, a surprise raid on a POGO complex in Bamban, north of Manila, resulted in the arrest of individuals involved in illegal human detention and scam-related activities and the rescue of over 800 victims of human trafficking and abuse. The raid also uncovered links between the POGO and Bamban Mayor Alice Guo, prompting a Senate inquiry into multiple issues such as Guo’s ties with the POGO operations and her claims to be a Philippine national.

Government’s ban

Amid growing calls to take decisive action against the law-and-order threats posed by POGOs, President Marcos announced on 22 July 2024 a ban of all POGO operations in the Philippines.

The announcement was praised across Philippines society, with lawmakers commending the decision as necessary to combat the corruption and criminal activities rampant within the industry, and business groups welcoming the ban as an opportunity to repair the negative international perception of the Philippines as a hub for illegal activities.

What’s next?

There is optimism that the ban on POGOs represents a positive step in the Philippines’ commitment to combatting corruption and crime. Criminal syndicates can no longer disguise their illicit activities under the facade of legal gambling operations.

That said, it remains to be seen whether the ban will be effectively enforced. The key challenge for law enforcement is to prevent licensed POGOs from being driven underground, which was a phenomenon that existed even before the ban.

Another challenge is how the Department of Labor and Employment can help the displaced workers working with POGOs find a new job. Many will be observing the Philippines’ efforts to clean up of the POGOs industry and learning lessons about the enforcement of a blanket ban and the weeding out of widespread industry-driven illicit activities.

Neighbouring countries in the South-East Asia region may also wish to consider strengthening their laws and regulations to prevent criminal syndicates from shifting their operations away from the Philippines to countries with weaker enforcement. The fight against syndicated illicit activities is not just a national effort, but also a regional and global one.

Authored by Hsiao Tien Tan, Paris Buti, and Nigel Sharman.