Eye on Asia | Manila must play its cards right with Chinese offshore gambling, given Beijing’s warnings

While China clamps down on cross-border gambling, countries in Southeast Asia are looking to corner more offshore gaming capital. Online gambling is illegal in mainland China and Beijing wants to crack down on cross-border gambling because it is morally corrupt, and a venue for capital flight and money laundering.

But Chinese revenue has made cross-border gambling a lucrative industry for many of China’s neighbours, where gambling is mostly legal. This is particularly so for the Philippines, which has become Asia’s third-largest gambling destination in a few short years, although still far behind Macau and Singapore.

Annual licence fees are the government’s third-largest income source, after taxes and customs revenue. Revenues from the industry are expected to reach US$4.1 billion this year. With legal cover, low costs of living and operations, improved political ties and proximity, the Philippines is a good bet for Chinese gambling businesses.

Almost half of that revenue came from casino licence fees and offshore gaming operations. Over 100,000 Chinese migrant workers employed by Philippine offshore gaming businesses pay income taxes worth 2 billion pesos monthly.