Alejandro Tengco, chairman and chief executive of the Philippine gaming regulator, says the agency is set to reduce again, in January next year, the rates for operators of electronic-delivered games in the country.

“By January 1, 2025, we are again lowering the rates to 30 percent for our e-Games licensees,” stated on Thursday Mr Tengco (pictured), the head the Philippine Amusement and Gaming Corp (Pagcor).

“One of the things that I noticed when I started as chairman [of Pagcor] was that on a weekly basis, there were so many requests for voluntary closures” from operators in the e-Games sector, said Mr Tengco in an interview with GGRAsia.

To reverse the “alarming” trend, “we needed to make sure that we charged them a fair tariff,” he added.

“Not only would we induce the existing licensees to continue operating, but we would also induce others to think of investing in the industry,” said Mr Tengco. “I went against the tide, but I guess that was the right decision.”

The new 30-percent rate would be “very competitive” and “in line with the global standards in terms of rates being levied by other competitors worldwide,” stated Mr Tengco. “We are confident that the lower rates will attract more companies to conduct business and investment in the Philippine gaming industry.”

The licence fee – as a share of revenue – was cut to 35 percent in April this year. The rate used to be above 50 percent in 2022.

Asked by GGRAsia if the rates could eventually go lower than 30 percent in the future, Mr Tengco replied: “My mind is focused on the 30 percent … But time will tell.”

“I have seen that my decision was the right decision, so, I am not discounting the possibility that I’ll even lower the rates further,” he added. “By doing so, you help the existing operators have a steady flow of business, but, more importantly, you’re able to steer more interest because of the lower rates.”

Soft moratorium

The head of Pagcor confirmed that the agency had imposed a “soft moratorium” on new applications for electronic gaming operators.

“Our department in charge of electronic gaming is just overwhelmed with so many applications” from entities wanting to become operators or service providers, he told GGRAsia.

“We are not processing any application, unless they were made prior to the soft moratorium. I’m not saying we will not issue licences anymore, but I just want the department to focus on existing applications,” stated Mr Tengco.

The chairman said the agency would “restructure” the “entire department” overseeing electronic gaming, so that it could “be able to cope with new applicants and be able to monitor the existing operators”.

“To us, at Pagcor, the future of gaming is a very, very clear, and we are placing our big bet on the e-Games sector,” said Mr Tengco in separate remarks during a speech at the Global Gaming Expo (G2E) Asia in Macau.

The Philippine gaming sector – including non-casino operations – produced gross gaming revenue (GGR) of PHP81.70 billion (US$1.42 billion) in the first quarter of 2024, up 18.5 percent from the prior-year quarter.

The e-Games segment continued its “record-breaking performance”, according to Pagcor, bringing in PHP22.5 billion in GGR for the three months to March 31, or “more than six times” the PHP3.5 billion recorded in the opening quarter of 2023.

On Thursday, Mr Tengco said the e-Games performance in terms of revenue “continues to exceed expectations”.

Another reason for the growth observed in terms of first-quarter GGR was attributed to “the continuing improvements and tweaks” that Pagcor is doing to its regulatory policies, noted the chairman.

He said Pagcor also continued to “intensify” its fight against illegal gambling in the nation.

“Since the last quarter of 2022, Pagcor has provided law enforcement agencies with intelligence reports that led to 10 successful operations involving internet gaming licensees,” observed Mr Tengco.

He added: “We have penalised 65 internet gaming licensees and service providers since I assumed office, and we have collected a staggering US$3 million in fines and penalties.”