Philippines To Shut 175 Online Casinos, Deport 40,000 Chinese – MANILA – In a major political overhaul and a long-term economic and political coup, the new Philippine President Ferdinand Marcos Jr is cracking down on Chinese online casinos that have spread across the capital Manila and across the country under his controversial predecessor.
This week, the Philippine Department of Justice (DoJ) announced that it will shut down the operations of 175 Filipino overseas gamblers, known locally as POGOs, and thus deport up to 40,000 Chinese workers who worked in the notorious industry.
Philippines To Shut 175 Online Casinos, Deport 40,000 Chinese
The targeted POGOs, according to DoJ officials, have been active despite expired or revoked licenses and outstanding tax credits. Even more troubling are the links to Chinese organized crime networks.
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“This attack was prompted by reports of murder, kidnapping and other crimes committed by Chinese nationals against other Chinese nationals,” Philippine Justice Department spokesman Jose Dominic Clavano said in explaining the robbery.
The potential earthquake decision drew praise from China’s embassy in Manila, which reiterated that Beijing “strongly opposes and takes tough measures against gambling.”
About 30 POGO licensees are said to continue their activities in Southeast Asia. At their peak, however, coastal casinos employed up to 21,000 Chinese, an influx that dramatically changed the landscape of the Philippines’ major cities.
The impending exit of POGOs could cause significant economic damage, especially in the country’s real estate market. It could also clear up the conflicts of countless local officials and law enforcement officials who are said to have acted as local allies to the controversial industry.
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The opaque industry has flourished under President Rodrigo Duterte, who has advocated a tough turn against China at the expense of allies. Despite his opposition to gambling shortly after taking office, the controversial Philippine president has overseen an unprecedented explosion in the online gambling industry.
The revenue of the sports industry doubled to 4.1 billion during the three years of his tenure. Meanwhile, licensing fees alone reached $140 million in 2018, representing an 11-fold increase. Almost overnight, the Philippines emerged as one of the world’s leading gambling cities, along with neighboring countries Singapore and Macau.
Even during the pandemic, when Duterte imposed one of the longest and strictest Covid-19 lockdowns, POGO operations are still successful in transitioning to online games. In 2020, the government collected 7.2 billion pesos ($122 million) in revenue. By 2021, license fees alone reached 3.9 billion pesos ($80 million).
However, the total contribution to the domestic economy is likely to be much larger when fringe benefits, domestic consumption, and non-wage taxes from POGO workers are included. By restoring the controversial industry, however, the Marcos administration hopes to strengthen ties with Beijing by attracting high-quality manufacturing jobs from China instead.
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The booming gaming industry has raised alarm bells at the highest levels of government. Another area of concern was national security, as most of the POGOs operated by the Chinese were concentrated in key areas, including the headquarters of the Philippine National Police, Department of National Defense, Philippine Army and Philippine Air Force, and Navy headquarters.
Defense Secretary Delfin Lorenzana openly admitted, “[I]t is easy for all these [Chinese workers working in POGOs] to maybe change their jobs to espionage [since] they are close [to military bases].
For his part, the representative of the National Security Adviser Hermogenes Esperon warned about the number of Chinese people who are starting “false accounts” and gathering in special relations, which he said would represent “a threat to national security”.
“You will also start to worry if the entire building, condominium, tower is occupied by one country and you will not be able to guard all their activities,” agreed the Philippine National Security Adviser.
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At one point, Philippine officials even discussed the possibility of moving all online Chinese casinos into “independent hubs” to reduce any national threats.
Lawmakers, however, warned of the presence of thousands of Chinese intelligence workers under the guise of POGOs, while lamenting the deepening of illegal activities, including tax evasion, prostitution, human trafficking, money laundering and, in some cases, murder, torture. and looting at sports venues.
At one point, local authorities had to set up Mandarin-speaking units to effectively deal with violence and crime among Chinese nationals linked to the shadow industry.
Things came to a head in 2020 when several lawmakers proposed a law banning POGOs, pointing out that Chinese casinos “have caused countless crimes and misdemeanors in the conduct of such activities.”
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Even the Chinese government began to pressure Manila to destroy the coastal casinos. But Duterte stood by the controversial industry in the face of domestic and foreign critics.
After direct talks on the matter with Chinese President Xi Jinping, Duterte insisted: “I decided that we need it for the benefit of my country. Many will lose their way of life (sic).”
As lawmakers questioned his decision to allow POGOs to continue their operations during the pandemic lockdown, Duterte insisted that they are “clean” and important in economic recovery.
However, the tide had already turned on the shady industry. As of 2019, the Philippine authorities made it clear that POGO licenses would be investigated and that there would be a cap on the number of licensed users in the country.
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Over the next three years, the number of POGO licenses nearly halved, with growing government control and rising taxes, rents and pandemic-related disruptions pushing Chinese workers overseas.
This year’s transition from Duterte to Marcos Jr. brought about a renaissance in the relationship between the Philippines and China. Although he was a close ally of Duterte during the election, Ferdinand Marcos Jr. he has reversed several key policies, including his predecessor’s violent war on drugs and anti-Western foreign policy.
It is important for the new Philippine president to also push for a mutually beneficial relationship with Beijing based on concrete projects and high-quality investments. Shortly after the start of his administration, Marcos Jr suspended several Chinese-backed infrastructure projects due to concerns about insufficient funds and high interest rates.
The two parties have resumed high-level talks on the economic plans of the two countries. But also as part of a new initiative, Manila under Marcos Jr is starting to crack down on the shady activities that fueled anti-China sentiment in the Philippines.
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According to some estimates, the closure of POGOs, which generated an average of $3.22 billion per year in recent years, will create a major shock to the real estate market and the commercial sector.
According to Leechiu Property Consultants, a real estate analyst, the complete shutdown of the controversial industry could create a huge 1 million square meters of vacant office space. The subsequent drop in real estate prices could also hurt large conglomerates, which have been at the heart of the Philippines’ economic growth in recent years.
However, the DoJ’s announcement was received openly from many quarters. Senator Joseph Victor “JV” Ejercito, son of the former president and friend of Marcos Jr., for his part supported the decision to cancel the offshore casinos and expel the Chinese nationals who were too involved in the industry.
He urged the Philippine National Police Bureau of Immigration, the National Bureau of Investigation to “work twice as hard to investigate and detect these types of activities.”
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The Chinese ambassador in Manila is among the ardent supporters of Marcos Jr’s crackdown on the shadow industry. In a statement this week, the embassy said that under “Chinese laws and regulations, gambling in any way by Chinese citizens, whether online gambling or gambling abroad, is illegal.”
The Chinese authorities vowed to “continue to strengthen communication and cooperation with the Philippine government and law enforcement agencies, especially in this matter, and to deal constructively with deportations, among other things.”
For Beijing, the move could strengthen bilateral relations as the POGOs are riddled with charges “not only harming China’s interests and China-Philippines relations, but also harming the interests of the Philippines,” the ambassador’s statement said.
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This industry was called the ‘sunrise industry’, but there was concern as Chinese nationals committed crimes against Chinese nationals by forcing them to work for POGOs.
The Department of Justice of the Philippines ordered the closure of 175 online casinos that were operating illegally and ordered the dismissal of 40,000 Chinese workers.
The Philippine Gaming Authority also canceled the licenses of these online casinos, known locally as Philippine Offshore Gaming Operators, or POGO, said Department of Justice spokesman Jose Dominic Clavano.
There are approximately 300 Chinese nationals working in illegal POGOs, all under the government. The Department of Justice of the Philippines said about 40,000 Chinese workers will have to be laid off. Each POGO employs about 200 Chinese workers, according to the other
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About 3,000 workers will be fired by the middle of October as the government is planning to start arrests at the beginning of next month, Mr. Clavano said.
Clavano explained that the violence was started after the emergence of cases of murder, kidnapping and other crimes committed by Chinese nationals against other Chinese nationals.
These POGOs were also used to distribute to China
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