While the Philippine offshore gambling industry is thriving, the Chinese government claims that the small island nation is playing with loaded dice at China’s expense.
The online gambling boom in the Philippines is directly tied to the popularity and domestic illegality of casino gaming and sports betting in mainland China because POGOs, or Philippine Offshore Gaming Operators, almost exclusively target Chinese nationals with their gambling products.
Due to its focus on Chinese customers, the Philippine POGO industry employs over 100,000 Chinese workers, with plans in place to build “hubs” – complete with offices, residential spaces, grocery stores, restaurants, gyms, and more – exclusively for this foreign labor force.
POGOs have been a huge hit since their 2016 inception, generating some $6 billion pesos (US$115 million) in 2018. They are on pace to meet that figure again this year.
However, the vast majority of that money comes from Chinese gamblers, with Beijing claiming that “hundreds of millions of Yuan” are being unlawfully funneled to the Philippines through POGO websites.
In a press release, the Chinese government has also raised the specter of money laundering, human trafficking, modern-day slavery, and even murder in association with the POGO system.
Further, China doesn’t intend to sit idly by while these issues continue unabated. According to the aforementioned presser, Beijing will pursue Philippine POGOs on multiple fronts:
“The Ministry of Public Security of China has taken many actions and will carry out more special operations aimed at preventing and combating the cross-border gambling. China…will destroy networks of criminal organizations involved in recruiting gamblers from China by overseas casinos and using the Internet to open casinos in China. China will also crack down on ‘underground banks’ and online payment platforms that provide a financial settlement for cross-border gambling and other crimes, and wipe out domestic network operators and companies that provide technical support for such crimes.”
Philippines president Rodrigo Duterte is scheduled to meet with Chinese president Xi Jinping later this month.
And while the POGO controversy won’t be the most pressing issue on the docket, it is expected to be discussed, though the basic business model is unlikely to change.