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Philippine President Ferdinand Marcos Jnr is facing increased pressure to ban all online gambling operations. Photo: Shutterstock

Philippines’ Marcos mulls online gambling ban amid fears ‘Chinese gangsters’ have taken over

  • Marcos’ close political allies urge him to put a stop to online gaming operators, or Pogos, saying mounting related crimes and social costs outweigh revenue brought in
  • Justice secretary warns of ‘humanitarian crisis’ over Chinese Pogos workers, with about 40,000 overstaying in country after operations shut down
Philippine President Ferdinand Marcos Jnr is facing increased pressure, including from his own allies, to ban all online gambling operations amid evidence that “Chinese gangsters” have taken over what was only last year described as a sunrise industry.
Under the previous Duterte administration, Philippine offshore gaming operators (Pogos) began to proliferate, with dozens sprouting up in the past several years, many illegally, and most catering to players in China where gambling is illegal.

With it has come a spate of crimes, including kidnappings, murder, torture and allegations of workers being “enslaved”, prompting Marcos’ close aides to urge him to put a stop to it once and for all.

Philippine President Ferdinand Marcos Jnr. Photo: AP

Marcos could sign an executive order any time and stop their operations, according to Senator Minority Floor Leader Koko Pimentel, while Senator Nancy Binay said Congress could pass a law banning them because “is it worth it?”.

Senator Imee Marcos, the president’s elder sister, said on Sunday he was deliberating on the matter, but added he had not made up his mind.

Marcos’ close ally, Senate President Juan Miguel Zubiri, said on Monday he would support such a ban because “the social costs” outweighed “the meagre income” Pogos brought in, echoing the September 15 remarks by Finance Secretary Benjamin Diokno.

Other cabinet members, however, are divided on the issue.

Congress under the Duterte administration had last year enacted legislation to tax Pogos. Senator Pia Cayetano said then that based on the finance department’s estimates, Pogos would generate 32.1 billion pesos (US$553.4 million) worth of taxes for 2022.

Are kidnappers targeting Chinese women in the Philippine gambling sector?

Diokno also told senators last week that only 3 billion pesos of taxes had been collected so far from Pogos this year, even lower than the 3.9 billion pesos in 2021 or the peak of 7.2 billion pesos in 2020. “So if you have to ask me, I am in favour of discontinuing,” he said. “China has discontinued. Even Cambodia. It also has (a) reputational risk.”

Secretary of Justice Jesus Crispin Remulla, however, warned senators on Tuesday an outright and immediate ban could cause “a humanitarian crisis” for the Chinese Pogo workers.

Remulla estimated that about 40,000 Chinese nationals were currently overstaying in the country long after the 216 Pogo operators and providers they worked for were shut by the Philippine Amusement and Gaming Corporation for not paying taxes.

“But the problem … we are facing is the protocol of China in admitting deportations because they have specific requirements of their testing procedures,” Remulla said.

A screen shows Oriental Game, licensed to run an online gambling website in the Philippines, which has a live platform on its website for customers to interact with the young, female Chinese dealers. Photo: SCMP

“China has barred the return of their citizens involved in Pogo operations” or they are slapped with steep fines, he said, adding that those returning from illegal Pogos could have their passports “immediately destroyed or cut”.

A Philippine Daily Inquirer newspaper report on Wednesday indicated why the justice secretary may be reluctant to ban Pogos.

It noted that the Remulla family had in 2018 sold its 36-hectare (89 acres) property in the province of Cavite to Filipino-Chinese investors who then built a Pogo complex there that could house up to 50,000 Pogo workers.

Cavite, which has long been ruled partly by the Remulla family – and whose political ties to the Marcos family go back to 40 years – earns taxes from the Pogos there.

Last July, Remulla ordered the National Bureau of Investigation, the department’s investigating arm, “to stop everybody (in the NBI) from operating on Pogos because we are getting a very bad reputation on the matter”.

Remulla claimed NBI investigators were engaging in “hulidap” – a Filipino term referring to police staging arrests to extort money from innocent civilians.

Mounting evidence of Pogo-related crimes, and the outcry of the local Filipino-Chinese community and the Chinese embassy in Manila may yet shut Pogos, however.

After initially dismissing such crimes, police staged a series of crackdowns last week.

Manila’s new tax on Pogos could drive office vacancy rates to near two-decade high

On September 14, the force’s anti-kidnapping group rescued 43 Chinese nationals in Pampanga province who had been “enslaved” by a government-licensed Pogo operator called Lucky South 99 Outsourcing, Inc, according to Interior and Local Government Secretary Benhur Abalos. A Chinese national, Chen Yi Bien, the human resources manager of Lucky South 99, was arrested.

The next day, another Chinese national, Xiong Gang, was arrested while driving. “The vehicle contained a 9mm Daewoo pistol with silencer with a fully loaded magazine, a black airsoft pistol, and a pair of handcuffs,” a police report said.

The suspect was arrested while state operatives were scouring Clark Freeport Zone in Pampanga for more kidnap victims, police said.

Five Chinese nationals and their lone Filipino accomplice were arrested in Metro Manila on September 17, while their victim, a Chinese woman, was rescued after a ransom payoff.

Criminal Investigation and Detection Group national director Brigadier General Ronald Lee predicted that Pogos-related kidnappings would drop following the arrests. He blamed the rise in kidnappings to the relocation of “Chinese gangsters from Vietnam and Cambodia after the two countries had shut down online gaming”.