PAGCOR Chairman Says Philippine Gaming Industry Feels Effects of Middle East Conflict

(AsiaGameHub) –   According to the chairman of the Philippine Amusement and Gaming Corp (PAGCOR), the conflict in the Middle East is noticeably affecting the gaming industry in the Philippines.

“This is a difficult period for everyone,” Alejandro Tengco stated in a news release on Wednesday. “Gaming jurisdictions around the world are experiencing the effects of the oil crisis. Even more advanced nations such as Singapore, Macau, and the United States are not exempt.

“We will adapt at PAGCOR,” the statement went on. “It is necessary to align with current times and guarantee that responsible gaming stays central to our operations.”

Last month, Philippine President Ferdinand Marcos Jr. proclaimed a state of energy emergency in response to the crisis. A memorandum dated March 24 from Malacañang cited “uncertainty in global energy markets, severe disruptions in supply chains, and significant volatility and upward pressure on international oil prices” as dangers to the nation’s energy security. This proclamation may stay in place for a year or more.

Short-term relief for online gaming operators

On March 30, providing a lifeline to Philippine online gaming operators, PAGCOR postponed the newly required minimum guaranteed fees (MGFs) from April 1 to June 1. Under the new fee framework, all licensed Philippine gaming system administrators (GSAs) providing e-games must pay MGFs of PHP9 million (US$149,400), calculated on an assumed gross gaming revenue of PHP30 million.

For GSAs not offering e-games, the monthly rate was set at PHP4 million, based on a GGR of PHP15 million. Originally, these rates were scheduled to rise to PHP10.5 million and PHP4 million, respectively, starting in October. This schedule has been altered, with the second installment now commencing in December.

In a related development, Tengco mentioned that he is still awaiting approval from the Governance Commission for the sale and privatization of commercial casinos currently managed by PAGCOR. Upon his initial appointment in 2022, Tengco concurred that PAGCOR needs to cease its dual function as both regulator and operator, a situation many legislators have labeled a clear conflict of interest. During last year’s Asian Gaming Summit, he emphasized that “in layman’s terms, a referee cannot be a player on the same field”.

However, PAGCOR continues to operate over 40 casinos under the Casino Filipino brand. “There are many calls for decoupling, and we are waiting for the decision,” Tengco remarked on Wednesday. “Securing approval to privatize would be a game-changer.”

Conflict described as an ‘economic fault line’ for the Philippines

Meanwhile, Alicor Panao from the University of the Philippines has characterized the Middle East conflict as a “direct economic fault line” for Filipino citizens. Speaking speaking to the Philippine Inquirer, Panao described the situation as “a high-stakes economic event … where foreign policy shocks translate into household vulnerability and macroeconomic uncertainty.”

Industries related to gaming, such as tourism, are also facing pressure. As reported by the Manila Bulletin, Alfred Lay of Leechiu Property Consultants has drawn parallels between the current crisis and the Covid-19 pandemic regarding its impact on travel.

“Hotels in the Philippines are facing their toughest stretch since the pandemic,” Lay stated. “A sharp decline in occupancy is anticipated for April and May as the fuel crisis pushes up airfares, undermines traveler confidence, and strains household budgets”.

He further noted, “With international arrivals at risk and domestic spending weakening, the sector is preparing for a challenging second half of the year. Furthermore, the long-term outlook relies entirely on the speed at which the Hormuz crisis is resolved.”