The Rise of Online Gaming in the Philippines: A New Era of Revenue
The Philippines is witnessing a remarkable transformation in its gaming landscape, with the domestic online gaming industry emerging as a powerhouse in tax contributions. According to a recent report by investment bank Morgan Stanley, the Philippine Amusement and Gaming Corporation (PAGCOR) collected a staggering Php28 billion (approximately US$490 million) in taxes from the online gaming sector in the third quarter of 2024 alone. This impressive figure underscores the growing significance of online gaming in the country’s economy.
A Booming Revenue Stream
Morgan Stanley’s analysis reveals that the annualized gaming revenues from online gaming in the Philippines reached an impressive US$2.4 billion in Q3 2024. This figure represents a remarkable 70% of the total gross gaming revenue (GGR) generated by land-based gaming establishments. The online sector’s rapid growth can be attributed to its higher tax rate of 35%, which, despite being reduced from 50% two years ago, still surpasses the tax rates imposed on traditional land-based gaming operations.
Competitive Landscape and Future Tax Reductions
As the online gaming industry continues to flourish, PAGCOR is poised to introduce further tax reductions that could intensify competition among operators. Starting January 1, 2025, the tax rate for online gaming operations will be lowered to 25% for integrated resorts and 30% for other land-based operators. This strategic move aims to align the tax structure more closely with that of land-based gaming, which currently charges 25% for mass gaming and 15% for junket operations. Such adjustments are expected to attract more players and operators to the online gaming space, fostering a more competitive environment.
Market Dynamics: DigiPlus Takes the Lead
In this evolving landscape, DigiPlus has emerged as a dominant player, capturing 50% of the domestic online gaming market share. With approximately 30 million registered users, DigiPlus has surpassed established operators like Bloomberry Resorts Corp in both GGR and EBITDA. This shift highlights the changing dynamics of the industry, where new entrants can quickly gain traction and reshape the competitive landscape.
Bloomberry’s Strategic Move
Bloomberry Resorts Corp, known for its flagship Solaire Resort and Casino, is not standing still in the face of this competition. The company plans to launch its own online gaming app in the third quarter of 2025, aiming to target a different clientele under a brand distinct from its existing Solaire app. This strategic pivot reflects the growing recognition of the online gaming sector’s potential and the need for established operators to adapt to changing consumer preferences.
PAGCOR’s Vision for Online Gaming
PAGCOR has been actively promoting the growth of domestic online gaming, also referred to as e-Games, which encompasses a variety of offerings, including eCasino, eBingo, sports betting, and specialty games. This push for online gaming is in stark contrast to the Philippine Offshore Gaming Operators (POGO) industry, which the government has been systematically winding down. With plans for a full ban on POGOs set for January 1, 2025, the focus has shifted to nurturing the domestic online gaming sector, which is seen as a more sustainable and regulated avenue for gaming revenue.
Conclusion
The Philippines’ online gaming industry is on an upward trajectory, characterized by significant tax contributions, competitive dynamics, and strategic adaptations by established operators. As PAGCOR continues to refine its regulatory framework and tax structures, the landscape is set for further growth and innovation, positioning the Philippines as a key player in the global online gaming market.