Bongbong Marcos' POGO Ban Faces Skepticism: Will It Truly Curb Illegal Operations?

President Ferdinand Marcos Jr. announced a blanket ban on Philippine offshore gaming operators (POGOs) in his recent State of the Nation Address. Despite its popularity, experts worry the ban may push operations further underground, complicating regulation and enforcement.

Marcos Bans POGOs: A Controversial Move Against Gambling-Linked Crimes

On July 22, President Ferdinand Marcos Jr. delivered his third State of the Nation Address (SONA), concluding with a decisive announcement.

"All POGOs are prohibited as of today."

Philippine offshore gaming operators (POGOs) represent foreign direct investments in gambling operations that Chinese entrepreneurs (or syndicates) cannot conduct in their native country.

Flourishing during the tenure of former President Rodrigo Duterte, POGOs have been exposed as hosts of numerous crimes, such as human trafficking and prostitution, thanks to public investigations led by Senator Risa Hontiveros and Senator Sherwin Gatchalian.

As the President stated in his SONA, “Disguising as legitimate entities, their operations have ventured into illicit areas furthest from gaming such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder.”

In addition to the blanket ban, the President instructed the Philippine Amusement and Gaming Corporation (Pagcor) to “wind down and cease” POGOs by the end of the year. Marcos believed that “this will solve many of the problems that we are encountering…but it will not solve all of them.”

According to Reuters, Marcos’ announcement received widespread acclaim from typically critical netizens and Senator Hontiveros, who joined the standing ovation in the Batasang Pambansa.

However, there are concerns about the effectiveness of such a ban. The economics of bans suggest that this policy may backfire.

Historical Precedents Suggest Marcos' POGO Ban May Drive Operations Underground

History indicates that bans rarely eradicate the targeted issue. People often find creative ways to circumvent bans.

For example, Duterte’s war on drugs, a severe crackdown on illicit drugs, did not eliminate the drug trade despite aggressive enforcement and numerous extrajudicial killings. The drug trade remains active.

The primary reason is that any drug war generates substantial revenues and profits for producers and distributors. As seen in many other countries, drug supply interdiction sustains rather than suppresses the drug trade.

Authorities have also created perverse incentives to justify the ban. Reports indicated that police planted evidence and imposed quotas, distributing cash rewards throughout their hierarchy. Police often cited “drug personalities who died in anti-drug operations” as metrics of success.

Another example is the recent law banning unregistered SIM cards. Like the war on drugs, this ban was well-meaning but resulted in an underground market for pre-registered SIMs. Text and call scams, which the law intended to eradicate, have increased.

The same fate will likely meet Marcos’ widespread POGO ban.

It isn’t entirely clear what the President was referring to. In August 2023, the Philippine Amusement and Gaming Corporation (Pagcor) stated that POGOs would need to “reapply for licenses,” upon granting such licenses, they would need to adhere to new rules and regulations.

In May 2024, Pagcor issued 40 regular licenses to what it now calls “internet gaming licensees,” or IGLs. It also issued nine provisional IGLs. By July, Pagcor reported that 38 IGLs held regular licenses, while only seven held provisional licenses—a total of 45.

However, Pagcor admits that this group of 45 represents only a tiny portion of the total number of POGOs, many of which chose not to apply for licenses and went underground instead.

Pagcor chief Alejandro Tengco estimates there could be as many as 250 underground POGOs in operation. Meanwhile, the Presidential Anti-Organized Crime Commission (PAOCC) reports monitoring 58 POGOs that moved underground following widely publicized raids on POGO hubs in Bamban, Tarlac, and Porac, Pampanga.

Even before Marcos’ blanket ban, POGOs were moving underground. Implementing the ban will likely push the remaining IGLs further out of reach of state regulators, making them harder to monitor and control.

Once the ban takes effect, the remaining IGLs might disperse and set up shop on a smaller scale. POGOs are primarily back-office operations housed in office buildings, making it easy to disguise them as typical offices, similar to business process outsourcing (BPO) offices.

More importantly, the POGO ban places excellent responsibility on local officials and law enforcement agencies. Marcos acknowledged this in his SONA, stating, “To solve all the problems that we have been suffering under, all officials, law enforcers, workers in government, and most of all the citizenry, must always be vigilant, principled, and think of the health of the nation.”

However, the billions of pesos flowing into POGOs and the Philippines’ weak rule of law could mean that POGOs may continue by inducing local officials and law enforcement agencies to disregard their activities.

That’s exactly what’s happening now.

Bamban’s mayor, Alice Guo, a purported Chinese national with an allegedly fake birth certificate, appears to have deep ties with POGO investors.

Meanwhile, Porac’s mayor, Jaime Capil, claimed ignorance about a massive POGO hub in his municipality, Lucky South 99. However, this POGO hub was near an extension office of Porac’s municipal government. Shortly after the raid, signs of that extension office were quickly removed.

Do law enforcement agencies have enough resources to sweep the country and monitor suspected POGOs? And how easy will it be to raid these suspected POGOs? The significant raids in Bamban and Porac stemmed from human trafficking complaints. Without such triggers, securing court orders might be more difficult.

The President himself lacks the moral ascendancy to implement the law strictly. Remember, his administration still refuses to pay P203 billion in estate taxes owed to the Bureau of Internal Revenue.

This leads to the belief that Marcos’ ban will have proven futile by the 2025 SONA, and POGOs will still be around.