As it does for many countries where it is legalized, the Philippine gambling industry has had a profound effect on the country’s economy. The government has profited from the annual licensing fees that are issued, with these funds being the third-largest income source for the nation behind areas of taxes and customs duties. In spite of what seem to be a positive effect, there is a growing cause for concern and frustration from Filipino citizens as well as the Chinese government.
The Shift in Demand
For over 20 years, the Filipinos have seen their economy improved by the thriving industry of Business Process Outsourcing (BPO). It has provided 1.23 million direct jobs to the Filipino people, but over 4.08 million indirect jobs. The surge in online gambling, which is also referred to as Philippine Offshore Gaming Operators (POGOs), has created a sort of displacement with BPOs. A large part of the IT-infrastructure that was readily available for BPO operations were Chinese investments, with operations relying on a labor pool full of Mandarin speakers for operation. However, the Chinese have realized that there is also a need for Chinese-speaking gamers and personnel to staff the online casinos in the Philippines. This leads to a tricky area of exploitation for Chinese migrants. As it relates to the online gaming industry in the Philippines, there has been a drastic shift in the number of Chinese tourists that end up staying and working for the industry but who also partake in the services. This poses a legal complication.
The Chinese Complications
In spite of the employment potential and the willingness of the Filipino government to overlook the rush of migrant workers, the People’s Republic of China (PRC) is less than enthused with the state of the online betting and gambling industry. In fact, the Embassy of the PRC released a statement that reminded Chinese citizens of the illegality of any form of gambling. It listed gambling overseas, online-gambling, and opening new casinos overseas to attract a Chinese demographic as illegal. The statement also pointed the finger at the Philippine practice of targeting Chinese as customers, as well as recruiting and hiring Chinese workers for the casinos, offshore gaming operators, and other gambling entities without following the due and legal process for obtaining work permits or visas. The Chinese government is anti-gambling, to put it mildly, and the gaming regulator of the Philippines has long prohibited online casinos from targeting the Chinese market due to legal restrictions.
The Hard Sell of Transparent Operations
As far as the Chinese are concerned, the Philippine gambling market is corrupt. On more than one occasion Chinese officials have called on the Philippines to ban all online gaming, given the destructive impact it had its citizens. However, Filipino President Duterte has made it abundantly clear than no band would be coming since the nation needed the POGOs (at least, the revenue from them). The first six months of 2019 brought in 473 million US dollars to the country. For Duterte, it seems to be about the money. However, China doesn’t care about the financial health of the country, caring more for the well-being of its citizens. As a way to combat the effects of illegal gambling and employment activities, numerous Chinese citizens have had their passports revoked when it was found that ties existed to the illegal gambling activities going on in the Philippines.
The people of the Philippines have also spoken against the increased Chinese population on their land, with concerns coming all the way from some of the most senior members of the defense establishment. As much as China distrusts the exploitation of its citizens, members of the Filipino government don’t trust the nature of Chinese nationals on foreign soil. Allusions to covert spying activities or cybersecurity as potential threats are the basis for these concerns, but there is still a territorial dispute over maritime features in the South China Sea in which both countries have a vested interest.
The Visible Corruption
Setting the geopolitical concerns aside, there is mounting evidence that the activities of POGOs and on-site gambling operations are closely tied to criminal activity. A 2018 report on kidnapping showed that there was a greater number of foreign victim kidnappings by loan shark syndicates than have been attributed to Abu Sayyaf Group, the notorious terrorist organization. The year 2019 had 21 recorded incidents where Chinese nationals were kidnapped because of unpaid gambling debts. The trend is for syndicates to finance gamblers, but detaining and torturing them when they are unable to repay the loan. The groups then require family members to pay a steep ransom for the victim to be released. In addition to physical trauma, investment scams have emerged that target victims in China as well as the Chinese POGO workers living in the Philippines. Money laundering has become a major concern, as organized crime groups use casinos for narcotics trafficking, VIP gaming tours, prostitution, and loan-sharking.
The is mounting evidence that the Filipino gambling market isn’t the most transparent and wholesome place to place your wager. Unfortunately, positive changes don’t seem to be forthcoming.