The gaming industry in the Philippines is showing no signs of slowing down despite the challenges it has faced. PAGCOR, the Philippine Amusement and Gaming Corporation, recently reported a 32.3% year-on-year increase in gross gaming revenue (GGR) for the second quarter of 2024, reaching PHP 89.23 billion (US$1.56 billion). This climb comes despite dominating challenges, such as the President's order to ban all offshore gaming operations, known as POGOs, by the end of the year.

 A Surge in Revenue

The significant increase in GGR is a testament to the resilience of the robust gaming sector in the Philippines. This rise isn't just a seasonal uptick but a continuation of the momentum that started in the previous months of the year. Compared to the first quarter of 2024, the second quarter saw a 9.21% increase, underlining the sector's robust performance and instilling confidence in its future.

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"This sector continues to surpass targets and should help cover up for any shortfall resulting from the President’s order banning offshore gaming operations or POGOs by the end of the year," Tengco pointed out.

One of the standout contributors to this growth was the eGaming sector, which recorded an astonishing 525% year-on-year increase. PAGCOR Chairman and CEO Alejandro H. Tengco attributed this impressive performance to crucial policy reforms implemented over the past year. 

 What’s Driving the Growth?

A number of factors are likely contributing to this surge in gaming revenue. First and foremost, the eGames sector has benefited from favourable regulations and policy reforms that have spurred its growth. These reforms have ensured that gaming operators can carry out their work with ease and, hence, gain high revenues.

With the recent boom of eGames and efforts to improve and modernise its operations, PAGCOR has created a perfect opportunity to capitalise on the industry’s growth. However, it's important to state that not all sectors within the gaming industry experienced growth. 

Licensed casinos, traditionally the largest contributors to GGR, saw a slight decline, bringing in PHP 49.48 billion, a decrease of approximately 4% compared to last year. Similarly, PAGCOR-operated casinos under the Casino Filipino brand and bingo operations saw declines in revenue.

 Policy Reforms and the POGO Ban

We can attribute a significant portion of the industry's recent performance to the positive impact of the policy reforms PAGCOR introduced during the past year. These reforms have streamlined operations, improved regulatory oversight, and fostered a more conducive environment for gaming operators, setting the stage for further growth and development. 

However, one of the most significant developments in the industry has been President Ferdinand Marcos Jr.’s order to ban all Philippine Offshore Gaming Operators (POGOs) by the end of 2024. The POGO ban was announced during Marcos’ State of the Nation Address (SONA) in response to growing concerns over the social and criminal issues associated with these operations. 

Despite concerns that the POGO ban could lead to significant revenue losses, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan reassured the public that the impact on the country’s GDP would be minimal. According to Balisacan, POGOs accounted for less than 0.5% of the national GDP in 2023, and their closure is unlikely to have a substantial economic impact.

 The Road Ahead

Looking forward, the Philippines' gaming industry can expect continued growth. The surge in GGR in the second quarter of 2024, driven by strong performances in the eGames sector, suggests that the industry is adapting well to new challenges. However, the full impact of the POGO ban will remain to be seen once implemented at the end of the year. This ban could potentially reshape the industry's landscape, leading to a more sustainable and regulated gaming sector. 

While some sectors have experienced declines, the overall growth indicates that the industry is resilient and capable of overcoming hurdles. As PAGCOR continues to implement reforms and adjust to the new regulatory landscape, it will be interesting to see how the Philippine gaming sector evolves in the coming months and years. There is potential for new gaming sectors to emerge, further diversifying the industry and contributing to its growth.