LAST WORD 62
Taxing times for POGOs Sharon Singleton
Managing Editor, AGB
Despite pressure from China, Philippine President Rodrigo Duterte has so far resisted pressure to ban online gambling.
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midst reports of rising crime, including level possible and ultimately that may be the factor kidnappings and extorsion targeting Chinese that slows growth in the sector. Getting a POGO license isn’t cheap. According operating in the sector, Beijing finally put its foot down in August. In a strongly worded to updated figures from the Philippine Amusement statement issued through the Chinese embassy in and Gaming Corp., the application fee for an e-casino Manila, Beijing warned it would not tolerate any form is $150,000, while the actual license fee is $200,000, of gambling targeting its nationals and urged for help there is also a one-time bond of $300,000 and a license renewal fee every three years of $150,000. The numbers from Asian nations to stamp it out. Cambodia complied immediately, obediently are slightly lower for sports betting. Operators also complain of a myriad of hidden announcing an all out ban on the country’s flourishing i-gaming industry, which will take effect from the extras, which are hard to calculate. There is a fee of 2 percent of gross gaming revenue, end of this year. The government in Phnom Penh has already subject to a monthly minimum of $150,000 for an ecasino, admitted that the decision will cost the country’s payable monthly to PAGCOR, while the licensees also coffers dearly when it comes to tax revenue next pay a 5 percent franchise tax on gross gambling receipts. Over the past year, the Bureau year. Still, it’s hoping its decision of Internal Revenue and other will ensure the continued influx related government departments of Chinese investment, which have been cracking down hard on has been such a key driver for As long as non-payment of taxes, especially economic growth in Cambodia. POGOs continue non-payment of income taxes by For Manila, it was a different POGO employees. story. Duterte has been a loud to generate It sent a notice out to 48 POGOs and outspoken critic of gambling, money for the earlier this year directing them to especially online. But even he has pay the withholding taxes of their now recognised the significant treasury, Duterte foreign workers. As of August, amount of revenue the Philippine is unlikely to shut 22 had replied and had coughed Offshore Gambling Operators up PHP186 million. The BIR (POGOs) are generating and them down. was expecting a further PHP170 doesn’t want to kill the goose that million in coming months. lays the golden egg. But now there is a proposal POGOs paid PHP175 million ($3.4 million) in taxes in their first year of operations. in the works for a further 5 percent tax that would be That rose to more than PHP579 million in 2018, different from the 5 percent franchise tax. The Department of Finance said that Finance with the figure jumping to PHP1.63 billion in the Secretary Carlos Dominguez will support the proposal year to August alone. POGOs are also key drivers of the Manila real put forward by Albay 2nd District Representative estate market and local economy through discretionary Joey Salceda. Salceda is also reportedly proposing a gaming spending, making them valuable contributors to tax of $10,000 a month per table for a live set-up growth in the Philippines. Unlike Cambodia, Manila is not as reliant on China casino and a $5,000 a month gaming tax for random when it comes to foreign investment. According to number generator (RNG)-based games. He also plans figures from the Department of Trade and Industry, to impose $1,000 presumptive corporate income tax China was the largest foreign investor in 2018, making per seat for POGOs. Salceda, who chairs the House Ways and Means up some 28 percent of overseas investment pledges. However, investment by local Filipinos outweighed committee, said the panel is studying his proposals. Salceda has been a vocal proponent for the foreign investment by about five times. As long as POGOs continue to generate money for government to enjoy POGO revenues while they last, but said it should also be prepared for when they the treasury, Duterte is unlikely to shut them down. However, the government has also made it clear leave. Overtaxation may just be the factor that cooks that it’s prepared to squeeze them to the maximum that golden goose.
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Asia Gaming Briefings | November 2019
