CEZA seeks common Philippine regulatory fee

Tuesday 21st of March 2017

The Cagayan Economic Zone Authority wants discussions with the Philippines’ two other online regulatory bodies to establish a common fee structure and regulations to clear up confusion amongst operators in the country.

After coming to power in June last year, President Rodrigo Duterte’s pronouncements on online gambling have shaken confidence in Asia’s only regulated jurisdiction. He first talked of a ban, but then clarified he was just referring to illegal operators who were not paying taxes.

However, the situation was further muddied late last year when land-based regulator the Philippine Amusement and Gaming Corporation was given permission to begin issuing licenses to Philippine Offshore Gaming Operators, known as POGOs. This was in addition to licenses being offered by the First Cagayan Economic Zone and the Aurora Pacific Economic Zone (APECO).

Speaking on day two of the ASEAN Gaming Summit in Manila, CEZA Administrator Jose Mari Ponce said the situation had created uncertainty among operators as to what regulatory structure to follow.

“This is one reason we want to sit down together and once and for all agree what could be the Philippine fee, the regular fee so that there is no confusion from all the operators,” he said. “We would be able to agree on a common operations, common understanding for the benefit of the government.”

Ponce said authorities are currently working on a new set of guidelines aimed at clarifying the roles of regulators, which are likely to be published in the next few weeks.

He said the proposal is for both APECO and CEZA to be able to offer fiscal and economic incentives to operators setting up in their respective economic zones. In addition, they are also seeking to operate outside of the zones in Philippine Economic Zone Authority approved buildings.

This was a necessary to allow access to the better infrastructure currently available in the capital Manila. CEZA’s ability to operate in these external sites will need to be done in cooperation with APECO and Pagcor.

The uncertainty in the Philippines may be benefiting other regulators elsewhere.

SMP Partners group director David Hudson said on a morning panel discussion there had been an increasing trend of operators from the region seeking licenses in overseas jurisdictions and moving towards a multiple licensing system and the current uncertainty in the Philippines was likely to further drive that trend.

Pagcor began issuing its licenses in December, initially giving out 35 licenses as part of a trial program. Chair Andrea Domingo said on the first day of the ASEAN summit that she has received about 78 applications, though it will favor quality over quantity when it comes to awarding the licenses. The issuance is expected to provide a significant new revenue stream for Pagcor, which earned P9.71 billion ($193.5 million) in the first two months of this year.

“I think many of those who have been applying to us in this regard do appreciate the fact that we are trying to create a better image of the Philippines in the world by telling them that now we are going to have professional management and there won’t be any criminal activities that can be done in our casinos and in our online gaming stations.”