The Chinese government, through the spokesperson of its Ministry of Foreign Affairs, has formally written to the Philippines that online gambling is prohibited. Gambling is illegal in China, and this move is part of an ongoing effort to limit the availability of online gambling services to Chinese citizens.
China and the Philippines have strong diplomatic and economic relations, which are used by the Chinese government to ensure compliance with very close ties. Currently, the Philippines has temporarily suspended the process of reviewing new overseas gambling licenses, but there are also 58 licensed foreign gambling operators operating legally in the country.
##Agent Gaming and POGO License
Beijing’s request has been prompted by the popularity of agent betting and the issuance of POGO (Philippines overseas game operator) license. Agent betting allows someone to gamble in the casino by remotely giving instructions to hire an agent. This is also due to Chinese citizens bypassing the ban on gambling, using telephone and online streaming services.
The POGO license allows to register online gambling services in the Philippines to allow international players. Although they are not specifically targeted at Chinese players, their availability makes it difficult to enforce their ban on gambling in China. Many operators provide indoor casino streaming to provide proxy betting, which has seen them gain popularity within mainland China.
##The economic benefits of online gambling Philippines
It is vital to recognize China’s role in promoting the development of the online gambling industry in the Philippines. The Chinese government has cracked down on proxy betting in Macau by banning mobile phones and online streaming from casino tables. This has caused operators to move to other countries in Southeast Asia.
In the six months between January and June 2019, the Philippines collected $5.15 billion in tax revenue from online gambling operating POGO licenses. This accounts for 7% of the income earned by the country’s gambling regulator. In addition to taxes, the industry has also created hundreds of jobs.
##Cambodia’s online gambling ban
China is keen to emphasize and praise Cambodia’s decision to ban effective online gambling. Cambodia announced that it will not only stop issuing new online gambling licenses, but the current licenses will not be renewed due to expiration. China’s statement stated that this should lead to close cooperation between Beijing and Cambodia.
The Philippines will have to weigh the benefits of “strengthening” their relationship with Beijing online gambling when considering China’s requirements to the current tax revenue. This will make it possible to determine how China chooses to reward Cambodia for its decision to comply. The Philippines has expressed its willingness to comply with POGO by suspending the issuance of new licenses.