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POGO: Boon or bane

"Allegations abound that corrupt Pagcor personnel and officials have been making a killing in ‘fixing’ the fees that POGO operators must pay."

If we are to believe the Philippine Amusement and Gaming Corporation, it seems the Philippine Offshore Gaming Operations or POGO is the biggest blessing to dawn upon the local gaming industry.

With revenues reaching P7.365 billion in 2018, POGO's income account for more than 10 percent of Pagcor’s total earnings of P67.85 billion, which increased by more than 18 percent from its 2017 income.

However, the Department of Labor and Employment paints a different scenario. According to Labor Secretary Bebot Bello, the government is losing P22 billion in income taxes that should have been collected from foreigners employed by POGO operators in the country.

An inter-agency task force composed of the DOLE, Bureau of Immigration, and Pagcor disclosed that offshore gaming in the country employs over 76,000. More than 82 percent of these are foreigners, of which over 56,000 are Chinese workers employed in the POGO.

The Chinese POGO workers reportedly earn 10,000 yuan or P78,000 monthly.

While Bello may be right in saying the government should run after the unpaid taxes of these foreign POGO workers, the government should also be looking into the manner by which these POGO workers were hired and even their nature of work.

In its website, Pagcor lists a total of 57 accredited POGO, all of which are allowed to have 10 service providers each. These service providers include (a) Customer Relations Service Provider; (b) Strategic Support Provider; (c) IT Support Provider; (d) Gaming Software Platform Provider; (e) Live Studio and Streaming Provider; and (f) Special Class of BPO (business process outsourcing).

So, if there are 57 accredited POGO, we would have a maximum of 570 service providers or a total of 627 online gaming-related companies. And assuming each would employ a maximum of 50 Chinese workers each, which is relatively high as people from an IT company I interviewed said she cannot imagine an IT-support company employing 50 personnel, we would only come up with 31,350 Chinese workers at the most.

So, what really are the job description of those 76,000 POGO workers? Why were these POGO operators issued alien employment permits by DOLE and the BI? Of course, these couldn’t be done without the facilitation of some corrupt Pagcor personnel or officials.

In fact, allegations abound that corrupt Pagcor personnel and officials have been making a killing in “fixing” the fees that POGO operators must pay.

One case cited was that of a POGO operator which was granted license in June 2017. According to insiders, the POGO operator's arrears amounting to $1,800,000 were mysteriously written off after a lawmaker allegedly lobbied on its behalf with his fraternity brother in Pagcor.

According to insiders, the operator’s liability arose from its unpaid monthly guaranteed fee since June 2017 of $150,000 a month which Pagcor charges its POGO operators. In January 2018, insiders added, Sohu, which has yet to operate by then, appealed to Pagcor to waive its its arrears, which the gaming regulator denied.

By June 2018, the operator was reportedly forced by Pagcor to settle even for the equivalent of one month of its total obligation which was then running to more than $2,000,000, so that it could be allowed to renew its license, to which the operator obliged. By that time, to reduce its monthly obligation to Pagcor, the operator shifted to Sportsbetting, which is charged only $40,000 a month.

In September, Pagcor again reminded the operator of its unpaid obligation, which, including its previous arrears, now runs to more than $2.2 million.

But in December, the operator’s previous arrears were written off mysteriously. A Pagcor official tried to justify the operator’s reduced obligation by citing its shift to Sportsbetting. This, however, does not hold water as Sohu only shifted to Sportsbetting in June last year.

It seems someone is making money here and that the online gaming appears to be only serving as a front for illegal activities. These allegations could validate rumors that corruption is flourishing in the online gaming industry.

So, would a P7 billion additional income offset the billions of pesos the government has been losing on this online gaming operation?

Income from the online gaming could be beneficial to the country especially since the government has been wanting for funds for its unprecedented infrastructure program. But only if it is run properly.

Topics: Charlie Manalo , Philippine Amusement and Gaming Corporation , Philippine Offshore Gaming Operations , POGO
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