60 POGOs rake in P300 billion — lawmaker

MANILA, Philippines — The 60 Philippine offshore gaming operators (POGOs) accredited by the Philippine Amusement and Gaming Corp. (Pagcor) are raking in at least P300 billion in gross income, a senior lawmaker said yesterday.            

Rep. Elpidio Barzaga Jr. of Dasmariñas City in Cavite said Pagcor collected P6 billion in “regulatory fees” from its POGO licensees in 2018. The amount represented two percent of total earnings of the 60 POGOs.            

“That means the POGOs must have grossed at least P300 billion, or P5 billion each, last year. That’s the magnitude of the earnings of these lucky Chinese and Filipino gambling operators who are not even paying franchise and income taxes,” he added.            

He pointed out that if Pagcor expects to collect P8 billion this year from its POGOs, this means that the offshore gambling industry would have gross revenues amounting to P400 billion.            

Barzaga, a vice chairman of the House of Representatives committee on games and amusement, pointed out that aside from regulatory fees, Pagcor

should have collected a five-percent franchise tax on its POGOs.            

“Five percent translates to P15 billion,” he stressed.            

He explained that a franchise tax usually replaces national and local taxes but POGOs “are still liable to pay the regulatory fee of two percent since the cost of regulation is different from a tax.”             

Pagcor officials have told the games and amusement committee that of their 60 POGO licensees, 50 are foreign corporations while 10 are domestic entities that are 60 percent owned by Filipino investors. Most POGO businesses are owned and run by Chinese nationals.            

To determine the gambling businesses’ taxability, Solicitor General Jose Calida has made a distinction between a “Philippine-based” POGO, which he said is subject to local taxes, and a “foreign-based” or offshore operator, which he believed is not covered by Philippine taxation.            

Calida said a foreign-based POGO does not derive income from the Philippines, since he earns from bets placed abroad by its registered foreign clients and winnings are also paid abroad.