Philippine Gaming Regulators Shift Focus From e-Sabong To Junkets

With the new Marcos Administration now running the show, it seems like everything is business as usual on the online gambling front.

Previous President Rodrigo Duterte’s ban of e-sabong – or online cockfighting – appears to be semi-permanent, as reworking the model and re-legalizing the pastime doesn’t seem to be of chief importance right now.

While online sabong could return to the Philippines sometime in the future under a new set of more strict regulations, the country’s gambling authority – PAGCOR – has no problem with keeping the market based on in-person betting at regulated cockpits.

After all, cockfighting has been a local institution for hundreds of years, and the Internet isn’t really necessary when there’s a legit cockfighting venue nearby to every barangay.

If there’s a priority for the Philippine government when it comes to the nation’s gambling industry, the main thing – today – seems to be the refinement of the junket casino concept.

Ever since Suncity Group’s then-CEO Alvin Chau’s November 2021 arrest in Macau for illicit offshore gambling promotion, illegal gambling, and money laundering, junkets – like those operated by the now defunct Suncity – have come under closer scrutiny than ever.

In fact, in early July, PAGCOR released a directive informing Entertainment City casinos in Manila and other IRs throughout the nation what they expect from Philippine junket partnerships going forward.

You can read the full notice here, but the long and the short of it is that all parties involved in junket operations must be vetted and actively monitored to ensure that nobody at any level in the business owes any tax debts, has ever declared bankruptcy, operates as a loan shark, has a criminal record of any kind, etc.

Now, if you primarily enjoy offshore online gambling in the Philippines, junkets are nothing but a curiosity. These are strictly land-based gambling phenomena.

However, the Philippine online gambling market – both in-country and overseas at legal sites such as BetOnline et al. – nevertheless rely on local casinos to some level.

Big brick-and-mortar venues give an air of legitimacy and aspiration to the entire gambling industry, which carries over into the online realm.

Sure, online casinos, sportsbooks, and poker rooms would still be around if there weren’t any land-based physical casinos, but the industry as a whole is better off when the industry works as a whole.

As such, it’s in the online gambler’s interest to at least understand what junkets are and why they’re important.

Fortunately, junkets are easy to explain: They’re travel agencies and hosting services for gambling tourists.

Of course, most outlets define junkets in a pejorative manner, like this “explanation” from The Wall Street Journal in America (where junkets aren’t even a thing):

junket casinos explained

As you can see, this is a very cynical sort of explanation of casino junkets in general.

Yes, the first panel is true: Junkets are companies backed by wealthy investors. People with “excess” wealth tend to be the ones who invest that wealth into companies, projects, etc.

That’s not scandalous, even though the WSJ tries to set things up using manipulative, negative language. Remember, you’re supposed to hate junkets!

The second panel is similarly correct but inoffensive. Why the gambler is some fat guy with a cigar is anyone’s guess, but Occidental stereotypes applied to the Orient aside, this is fundamentally how junkets work.

The third panel somewhat obfuscates things. The “agent” doesn’t typically “party” with the gambler in question, largely because most junket clients bring their own parties with them.

Lots of business dealings are done in these casino VIP rooms, just like on golf courses in the West.

Sure, an agent may be present from time to time if he or she is on good terms with the client (or is needed to provide services in the manner of an assistant or butler), but the point of the junket is to give the client a private space for his or her group to gamble without distraction from the general casino clientele on the main gaming floors.

After the gambling concludes, the junket operator is given a small cut of the total house take from the handle turned in the VIP room, and that’s that.

The last panel is neither here nor there, as there’s no possible controversy about how or where a debt is collected, provided that it’s collected legally.

(At least, this is true from the international perspective – China probably isn’t too thrilled about its wealthiest citizens traveling out-of-country to bet with non-Chinese junkets).

Obviously, the biggest concern with junkets is that they can be (and sometimes actually are) abused for their potential as money laundering enterprises.

This is uncommon – gambling is a profitable industry for operators and is a legitimate business in and of itself. But it can and does happen from time to time.

That said, this doesn’t invalidate the junket concept like The Wall Street Journal would have you believe with its silly little infographic.

But it does mean that regulators – like PAGCOR – must be vigilant, as must the casinos partnering with these junket companies.

And that looks to be exactly what they’re all doing.