Online games propel Philippines to record-breaking revenue

The Philippine gaming industry is looking to break last year’s record for gross gaming revenue (GGR), thanks in large part to online games.

The sector will reap GGR of PHP350 billion (£4.67 billion/€5.645 billion/$6 billion) by the end of 2024. That exceeds initial government targets of PHP334 billion and is significantly higher than the PHP285 billion generated in 2023.

Spike may be temporary

According to Morgan Stanley, online games comprised 70% of GGR for the third quarter. Researchers based their conclusions on Q3 results from the Philippine Amusement and Gaming Corporation (Pagcor). On 14 November, the state-run regulator announced that GGR for the period grew 37.52% to PHP94.61 billion over PHP68.79 billion in 2023.

Pagcor chairman and CEO Alejandro Tengco attributed the rise to “electronic gaming, (which) recorded a phenomenal increase of 464.38% from last year”. Revenues for the sector swelled to PHP35.71 billion, up from just PHP6.32 billion in the third quarter of 2023.

“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,” Tengco said.

However, Morgan Stanley noted that the growth may be short-lived, as Pagcor piles up licensing and other fees from new operators. In 2023, the regulator licensed more than 1,000 igaming sites, with more applications in the pipeline.

“Because of the policy changes implemented by the current management, there was a considerable increase in gaming sites,” Tengco acknowledged. “We also approved reductions in (licensing) rates that contributed to the spike in approved sites.”

No POGOs? No problem

It has been a turbulent year for Philippine gaming, with the ouster of Philippine Offshore Gaming Operations (POGOs). Established in 2016, concurrent with domestic online gaming operations, POGOs served gamblers in other countries, especially China. This year, a number of POGOs were exposed as fronts for online scams, implicated in crimes including kidnaping, human trafficking, online scams, money laundering and torture.

In July, president Ferdinand Marcos Jr banned the POGO industry, and ordered them to exit the country by 31 December. Pagcor says only a handful of operations remain at this point and will be gone by the new year.

In related news, Pagcor will soon occupy a new 40,000sqm headquarters in Pasay City, close to Manila’s Ninoy Aquino International Airport and the Entertainment City casino zone. The regulator has signed a 25-year lease with San Miguel Infrastructure (SMC) for the property.

“This project will be more than just a structure,” said Tengco. “It reflects Pagcor’s commitment to creating a world-class work environment for its employees; a reflection of our identity, core values and aspirations.”