Staying… for good?

He was “not satisfied” with the response of Chinese President Xi Jinping when the arbitral ruling on the South China Sea was raised, President Duterte told a recent public gathering.

Being a guest in Beijing, however, Duterte said he did not press the issue.

Xi himself may not be satisfied with Duterte’s response to Beijing’s expressed hope for an end to Philippine Offshore Gaming Operations or POGO catering mostly to mainland Chinese.

No, Duterte said in answer to a question at a press conference; the Philippines needs the earnings (now growing exponentially) so the POGOs will continue.

Although he didn’t say it, Duterte probably finds it hypocritical for China to prohibit gambling while at the same time allowing its special administrative region Macau to remain a gambling haven. Gambling is also legal in the Chinese administrative region of Hong Kong.

Chinese officials have stressed that all forms of gambling are illegal in their country, including offshore and online gaming. Whether as players or operators, Chinese citizens are prohibited by law from engaging in what their officials have described as a social “tumor.”

Since the Philippines will be abetting what is classified as a criminal activity in China, some quarters have expressed concern that Beijing may also become less cooperative in cracking down on what is considered a heinous offense in the Philippines, in which mainland Chinese are believed to be deeply involved: shabu manufacture and trafficking.

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Even POGO operators are concerned, but over a different dimension in Duterte’s statement. Gaming industry players have noted that it was only the second time that Duterte had publicly spoken about online gaming.

The first time, the players said, was when the President said he wanted to put an end to online gambling. Naturally, that pronouncement worried POGO operators. But so has the latest statement, which some operators fear could draw heat from Beijing. This in turn could affect the POGOs’ Chinese clients, managers and employees.

It would have been better if Duterte had not said anything about it, a POGO operator sighs. But the policy pronouncement was inevitable; there were official statements from Beijing about the evils of gambling and the need to stop POGOs, and only the Philippine president has the power to do that. So journalists had to ask Duterte the question.

Gaming industry players fear that the heat from Beijing could drive Chinese bettors and workers to friendlier environments. Cambodia has shut down online gaming operations, possibly due to pressure from China. But Vietnam and Myanmar are reportedly emerging as potential new foreign gaming hubs.

Industry players point out that they are already in stiff competition with other countries for the typical POGO employee: a man or woman at least 20 years old and no older than 35, willing to live for a year abroad, who reads Chinese characters and is fluent in Mandarin. Attractive girls are preferred, for those who must appear online.

The entry pay is P20,000, which can go up to P50,000 a month. A few persons with managerial duties may get P150,000, but this is still low compared to the salaries offered in gaming establishments in wealthy countries such as Singapore and Australia, which could go as high as $15,000 to $20,000 a month.

So yes, POGOs are in stiff competition for those Chinese workers. They typically get free meals, accommodations, shuttles to and from their housing and workplace, one-month vacation and round-trip plane tickets, both for the leaves and for their final return home.

There are agencies that recruit the workers, mostly from rural areas in China where employment and livelihood opportunities are lacking. As many Filipinos have observed (accurately, according to industry players), the typical POGO employee is from China’s lower income households.

Rapid assimilation into Filipino culture is difficult for such foreigners. Legit POGO operators have no problem relocating to self-contained gaming hubs supervised by the Philippine Amusement and Gaming Corp. (PAGCOR), where the Chinese employees may prove easier to keep out of trouble.

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There are only 58 POGOs nationwide licensed by PAGCOR, of which only 47 are operational. These are the ones that pay taxes and make an effort to keep their employees happy. On the other hand, there are 248 service providers – the equivalent of our call centers, which employ Mandarin-proficient workers to entice and cater to bettors.

Legit POGO owners are trying to organize themselves for transparency, to dispel public fears about POGO operations and their Chinese employees. But this is made difficult, according to industry players, by the proliferation of illegal fly-by-night operators – the type that chain their employees to window grills. Such abuses, as well as numerous reports of kidnappings and other crimes, are giving POGOs a bad name, the legitimate players complain.

Most of the tax-evading and labor-abusive operations reportedly involve the service providers. Industry players say a Metro Manila mayor is a silent partner in all such gaming operations in the clan’s turf – the reason why the city has possibly the highest number of POGO service providers in the country.

Oriental Game, owned by Chinese-Filipino businessman Kim Wong and arguably the largest POGO group in the Philippines, initiated the creation of gaming hubs, starting with its operations in Clark and its purchase (not lease) of the 32-hectare Island Cove from the Remulla clan in Cavite. Oriental Game currently employs 20,000 people, with 20 percent of them Filipinos.

The company is launching a training program to teach Filipinos Mandarin, so that the ratio can be raised to 40 percent. Since Mandarin proficiency is a challenge even for Tsinoys who speak Hokkien (Fookien), I consider this program ambitious, but I’ll give the company an A for effort.

Even with Duterte’s pronouncement, it looks like the creation of POGO hubs is still on track, as announced by PAGCOR.

The POGOs are here to stay. But all those POGOs and service providers as well as related businesses such as Chinese-only restaurants and grocery stores in your neighborhood will eventually move out to the hubs.

And their fate is uncertain after the general elections in 2022.