Pagcor failure in POGO’s governance

Spur-of-the-moment decisions often result in dire consequences, and this is so true for the Philippine offshore gaming sector, more popularly known as POGOs, that have sprouted like mushrooms in many parts of the country during the last couple of years.

Unfortunately, the Philippine Amusement and Gaming Corp. (PAGCOR) as its regulator can look to no other than itself for the many economic and social crimes that have been spawned by this, even as the government fattens its belly from the billions of pesos earned from online gaming operations.

PAGCOR’s lackadaisical oversight of the whole process is to blame for the many problems that have resulted in lost revenues for the Philippine government, as well as tax money that had to be spent for hours devoted by our lawmakers in investigating the problems that cropped up.

A committed team at PAGCOR would have been able to flag most of the issues that accompanied the influx of offshore gaming operators, and consequently could have given regulatory guidelines, even on the fly, to provide solutions to problems before they reached crisis proportions.

Instead, we witnessed how surprised the Philippine Economic Zone Authority and the Department of Trade and Industry were when the Office of the President issued an executive order that forbade the issuance of new economic zone permits within Metro Manila, presumably to encourage job growth in other regions, but really was to accommodate POGO needs.

Kneejerk moves

This ban was another kneejerk move that wasted the time and money of business processing outsourcing (BPO) companies spent in planning either the expansion of their operations in the country or opening up of a new business at a time when the US government did not look too kindly to US businesses overseas.

It could have put to risk one of the major job generators in the country that already had in place a track record spanning decades of partnership with PEZA and the DTI, and one that other developing countries in the world are competing for.

The regulator’s myopic view is also to blame for the hundreds of thousands of illegal Chinese workers that mostly were working on tourist visas, but were simply renewed to extend their stay in the country. The Department of Foreign Affairs had to toughen up its rules in response to this.

Of course, the Bureau of Immigration had to run after the Chinese “tourists” who were already working without the proper permits. Shouldn’t PAGCOR have given advice to their POGOs to have their employees go through the proper documentary procedures?                           

Even the Department of Finance and the Bureau of Internal Revenue were jolted into action after realizing that POGOs’ employment payrolls had surpassed more than half a million Chinese citizens who are not paying a single centavo in income tax to the Philippine government.

Demoralized

Has PAGCOR always been this inefficient about its supervisory role over gaming operators, both in brick-and-mortar casinos and online gaming floors? Or is this simply a case of a demoralization that comes with recent moves to privatize its operations?

Two weeks ago, the BIR reportedly closed down one of the country’s biggest online operators with offices in three areas in Luzon because it was not registered with the tax agency. Doesn’t PAGCOR check on this before giving or renewing licenses?

Something is definitely remiss about PAGCOR’s role in the ensuing mess that involves POGOs. If this is a case where the agency has become conflicted by its dual roles of running state-owned and — operated casinos, while regulating others in the gaming industry, then it would be best to push ahead with PAGCOR’s rationalization.

Good side

The merits of online gaming continues to be well debated. Almost everyone with a smartphone with good internet connection is able to participate in a variety of online games even if there is no monetary wagering involved.

Online gamers are able to develop their cognitive functions better by playing online games. This is scientifically developed because of the need to focus that creates surges of neurotransmitters to strengthen the neural circuits that make the brain optimize its function.

Online gaming also encourages the brain to make quick decisions that give optimum results and value. Even a simple online card game played against the computer sharpens the brain’s cognitive abilities. Hand and eye coordination is also sharpened.

With multiplayer online gamers, the ability to work with others as a team is enhanced. Sensitivities are improved among team gamers to enable each to “read” each other’s mind with the end goal of winning against the other teams.

Digital or e-sport games that the Philippine Collegiate Championship League are organizing and promoting at the school level, for example, have increased awareness about the competitive nature of digital sports. Students who are not into physical sports now have other options to become student/athletes representing their school in inter-school competitions.

Bad side

The other side of online gaming, on the other hand, has largely muted the above stated merits. Online gaming with monetary wagering has taken on the negative perceptions of Las Vegas and Macau casinos, complete with gangs and lurid tales of Mafiosis.

With pay wallets now accessible to any person who can do basic arithmetic, online gaming is not receptive to screening out underage gamers who are willing to bet small amounts.

With these said, and the current government’s support for online gaming with monetary wagering, it is up to us to impose our own regulations that will promote our better mental and physical health.

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