Philippine Gaming Industry Poised for Record Growth in 2024
The Philippine gaming industry is on the brink of a remarkable achievement, with projections indicating that it will generate a staggering PHP350 billion (£4.67 billion/€5.645 billion/$6 billion) by the end of 2024. This anticipated growth marks a significant leap from the PHP285 billion recorded in 2023 and surpasses the government’s initial target of PHP334 billion. The surge in revenue is largely attributed to the booming sector of electronic games, which has become a driving force in the gaming landscape.
The Rise of Online Gaming
A substantial portion of this growth can be traced back to the increasing popularity of online gaming. According to research from Morgan Stanley, online games accounted for an impressive 70% of the gross gaming revenue (GGR) during the third quarter of 2024. The Philippine Amusement and Gaming Corporation (PAGCOR) reported a remarkable 37.52% increase in GGR for this period, reaching PHP94.61 billion compared to PHP68.79 billion in the previous year.
PAGCOR Chairman and CEO Alejandro Tengco highlighted the phenomenal rise of electronic gaming, which saw a staggering 464.38% increase from the previous year, boosting revenues to PHP35.71 billion from just PHP6.32 billion in Q3 2023. This growth underscores the pivotal role that modern technology and mobile devices play in shaping the future of gaming in the Philippines.
A Cautionary Note on Sustainability
While the current growth trajectory is impressive, Morgan Stanley has cautioned that this spike in revenue may be temporary. The increase in GGR is accompanied by rising licensing and operational fees imposed by PAGCOR on new gaming operators. In 2023 alone, the regulator licensed over 1,000 iGaming sites, with many more applications pending. Tengco acknowledged that the current management’s policy changes have led to a significant uptick in the number of gaming sites, aided by reductions in licensing rates that have made it easier for new operators to enter the market.
The Impact of POGO Closures
The Philippine gaming sector has faced significant challenges this year, particularly with the closure of Philippine Offshore Gaming Operations (POGOs). Established in 2016, POGOs primarily catered to gamblers from other countries, especially China. However, numerous POGOs were implicated in serious criminal activities, including online scams, human trafficking, and money laundering. In response to these issues, President Ferdinand Marcos Jr. announced a ban on the POGO industry, mandating their exit from the country by December 31, 2023. As of now, only a handful of POGOs remain operational, with PAGCOR confirming that they will cease to exist by the new year.
PAGCOR’s New Headquarters
In a move that signifies its commitment to the future of gaming in the Philippines, PAGCOR is set to occupy a new 40,000-square-meter headquarters in Pasay City, strategically located near Manila’s Ninoy Aquino International Airport and the Entertainment City casino zone. The regulator has signed a 25-year lease with San Miguel Infrastructure (SMC) for this property. Tengco emphasized that this new headquarters will not merely be a building but a reflection of PAGCOR’s identity, core values, and aspirations, aimed at creating a world-class work environment for its employees.
Conclusion
The Philippine gaming industry stands at a crossroads, with unprecedented growth driven by online gaming and significant regulatory changes. As the sector navigates the challenges posed by the closure of POGOs and the evolving landscape of electronic gaming, its future remains dynamic and full of potential. With PAGCOR’s new headquarters on the horizon and a commitment to modernizing the gaming experience, the Philippines is poised to solidify its position as a key player in the global gaming market.