The Philippines is on track to shatter its previous record for gross gaming revenue (GGR), thanks to an unprecedented surge in online gaming. By the end of 2024, the sector is expected to rake in PHP350 billion (£4.67 billion/€5.645 billion/$6 billion), exceeding both government targets and 2023’s GGR of PHP285 billion.
The Numbers Behind the Boom
According to Morgan Stanley, online games accounted for an impressive 70% of the gaming revenue during the third quarter of this year. Data from the Philippine Amusement and Gaming Corporation (PAGCOR) backs this claim, showing that GGR for Q3 jumped 37.52% to PHP94.61 billion, compared to PHP68.79 billion in the same period last year.
PAGCOR’s chairman and CEO, Alejandro Tengco, credited the surge to the remarkable growth in electronic gaming. Revenues from the sector skyrocketed by 464.38%, climbing to PHP35.71 billion from just PHP6.32 billion in Q3 2023. Tengco remarked, “This impressive performance is a strong indication that the use of modern technology and mobile gadgets in gaming and amusement will continue to play a pivotal role in shaping the future of gaming.”
While the growth is a cause for celebration, analysts warn it may not last. Morgan Stanley cautioned that the rise in revenue is partly fuelled by a temporary wave of licensing approvals for new operators, which might taper off in the future.
Policy Changes Fuel Growth
PAGCOR has been licensing a record number of gaming sites. In 2023 alone, over 1,000 iGaming sites received approval, with many more applications in process. This influx of operators was partly driven by PAGCOR’s decision to lower licensing fees, encouraging a flurry of new entrants.
Tengco acknowledged the impact of these policy changes, stating, “Because of the policy changes implemented by the current management, there was a considerable increase in gaming sites. We also approved reductions in (licensing) rates that contributed to the spike in approved sites.”
However, while this strategy has bolstered revenue in the short term, experts suggest a need for careful regulation to sustain growth without oversaturating the market.
Thriving Despite the POGO Exit
The year has been anything but smooth for the Philippine gaming industry. One of the biggest shake-ups came with the government’s decision to expel Philippine Offshore Gaming Operators (POGOs). These operations, launched in 2016 to target international players, especially in China, faced mounting controversies. Accusations of involvement in crimes such as online scams, kidnapping, and human trafficking ultimately led to their downfall.
In July, President Ferdinand Marcos Jr. officially banned POGOs, mandating their exit from the country by the end of December. PAGCOR has confirmed that only a few remain and are expected to leave before the deadline.
Despite this upheaval, the domestic gaming sector has thrived, largely due to the success of locally licensed online gaming operators. Analysts view this as a clear signal that the industry can flourish without POGOs, especially as trust in legitimate gaming platforms grows.
A New Home for PAGCOR
Looking ahead, PAGCOR is preparing to move into a state-of-the-art headquarters in Pasay City, near Manila’s Entertainment City casino zone and Ninoy Aquino International Airport. The regulator has secured a 25-year lease with San Miguel Infrastructure (SMC) for a 40,000-square-metre facility.
“This project will be more than just a structure,” Tengco explained. “It reflects PAGCOR’s commitment to creating a world-class work environment for its employees; a reflection of our identity, core values and aspirations.”
The move is seen as a step toward bolstering PAGCOR’s status as a global leader in gaming regulation. With its new headquarters situated close to key gaming hubs, the regulator aims to streamline operations and continue fostering growth in the sector.
