Under its Charter, the Philippine Amusement and Gaming Corporation (PAGCOR) was given the mandate to regulate, operate, authorize, and license games, particularly casino gaming in the Philippines. Through this mandate, PAGCOR is expected to generate revenues for the Philippine Government’s socio-civic and national development programs, as well as help promote the Philippine tourism industry. The BIR said the registration of offshore gaming operators with the BIR shall be done with the agency’s regional district office having jurisdiction over the place where the head office and/or branch of the POGO hub is located. WHEREAS, RA No. 9728 created the Authonty of the Freeport Area of Bataan (AFAB) to manage and operate the Freeport Area of Bataan , and authorized it t o operate on its own , either directly or through a license to other tourism-related activities, including games, amusements, recreational and sports facilities, subject to the approval and supervision of the PAGCOR. For VAT purposes, however, the exemption extends only to those individuals or entities that have contracted with PAGCOR; hence, PAGCOR Contractees and not Licensees. As such, the Licensees’ revenues from gaming operations, involving sale of goods and/or services in the course of trade or business, are generally subject to VAT.
Philippine Amusement and Gaming Corporation(PAGCOR)
POGO sites in the Philippines must comply with PAGCOR regulations — for instance, they must not be in a residential area, and must have a maximum floor area of 25,000 square meters. Income realized by PAGCOR’s Licensees from other related services/operations shall be subject to regular CIT, VAT, and other applicable taxes under the Tax Code. Remember to conduct thorough market research, choose the right legal structure, obtain the necessary licenses, develop a compelling gaming platform, and market your business effectively.
- The license to operate online gambling granted to qualified operators shall not be assigned, shared, leased, transferred, sold or encumbered to any other party.
- In a report to Finance Secretary Carlos Dominguez III, the BIR also said it has signified its intention to join the interagency task force led by the Department of Labor and Employment (DOLE) and the Bureau of Immigration (BI) that aims to check and monitor the number of Chinese nationals who are working in the on-line gaming industry.
- PEZA does not have an authority to issue license to operate gambling casinos and online gambling in the country.
- These incomes are subject to regular CIT, VAT, and other applicable taxes under the Tax Code.
- This research will help you tailor your offering to the local market and identify any gaps or opportunities that your business can fill.
- Building a robust and secure online gaming platform is crucial for the success of your business.
The Philippine government has also played a significant role in the growth of the industry, with the Philippine Amusement and Gaming Corporation (PAGCOR) regulating and promoting the sector. “BPO companies are registered with PEZA or the Board of Investments (BOI), while POGOs are registered with PAGCOR. While BPOs and POGOs share one extraneous similarity, which is their offshoring nature, POGOs primarily do so because they are allegedly unable to practice their betting or gambling functions in their respective shores,” said in the IBPAP statement.
However, if the Licensees are also contracted with PAGCOR in connection with the latter’s gaming operations, then the sale of goods and/or services performed with PAGCOR in relation to such gaming operations is subject to 0% VAT. The Bureau of Internal Revenue (BIR) has asked the cooperation of the Philippine Amusement and Gaming Corp. (PAGCOR) on requiring foreign and Philippine-based offshore gaming operators (POGOs) to register with the tax agency before their licenses to operate can be renewed by the state-run firm. This blog post will provide a step-by-step guide on how to start an online gaming business in the Philippines, covering everything from understanding the market to obtaining the necessary licenses and ensuring compliance with regulations. All gambling activities, and activities and services directly or indirectly related to or in support of such gambling activities, conducted beyond the territorial jurisdiction of the government authority which issued the license therefor, shall be dealt with as illegal gambling. The same law enforcement agencies are further directed to coordinate and promptly act on requests of gambling regulatory authorities to investigate and put a stop to illegal gambling activities in their respective jurisdictions. For Licensees that are located in ecozones/freeports, their income realized from services/operations that are duly registered with their concerned Investment Promotion Agency (IPA) shall be subject to either 5% gross income tax (GIT) or income tax holiday (ITH), whichever is applicable.
POGOs: Stay or go?
But should the Licensees be contracted with PAGCOR in connection with the latter’s gaming operations, then the sale of goods and/or services performed with PAGCOR in relation to such gaming operations 20 deposit casino is subject to 0% VAT. By following the step-by-step guide provided in this article, you can navigate the process of starting an online gaming business in the Philippines and tap into the exciting potential of this market. The country’s favorable regulatory environment and strong infrastructure have made it a preferred destination for foreign investors looking to establish online gaming operations in the region. The country’s gaming market is fueled by a strong demand for online casino games, sports betting, and esports, as well as a growing popularity of mobile gaming among Filipinos. The Philippines has become a major player in the global online gaming industry, with a market size that is expected to reach PHP 35.4 billion by 2025, according to Statista. The country’s love for games and its young, tech-savvy population have contributed to the rapid growth of the online gaming industry in the Philippines.
Significant provisions require that licensees must have a capital of P100 million, of which P25 million must be paid up. As the troubled industry generates news that ranges from controversial at best to illegal at worst, it would be good to know more about POGOs and how they affect us. The main regulatory bodies for the industry are PAGCOR and the Cagayan Economic Zone Authority (CEZA). This research will help you tailor your offering to the local market and identify any gaps or opportunities that your business can fill.
How To Start an Online Gaming Business in the Philippines: A Step-by-Step Guide
By 2028, PAGCOR will generate 12.5 BILLION U.S. DOLLARS from the gaming industry to become the leading authority in the ASEAN region and increase its role as a major partner in nation-building. The Corporation was created during the Martial Law years by virtue of a Presidential Decree (PD1067-A) issued by then President Ferdinand Marcos in response to calls for the Philippine Government to put a stop to the growing proliferation of illegal casino operations in various parts of the country then. On the other hand, income from other related operations/services or from non-gaming operations pertains to income from the operation of necessary and related services, shows and entertainment. Building a robust and secure online gaming platform is crucial for the success of your business. “PEZA has proven its contributions not only to export income and massive employment it created, but also to the social progress it contributes for the host local government units where ecozones and export companies are located,” she said.
However, after the floating casino was gutted by fire in 1979, PAGCOR shifted its focus to land-based casinos and entered into another contract with PCOC for the management of a casino at the Provident International and Resources Corporation (PIRC) building on Imelda Avenue, Parañaque City, Metro Manila, Philippines. Then, under Presidential Decree 1869, decreed in 1983, it was mandated to act as the sole government corporation conducting and establishing gaming pools and casinos in the country. Moreover, in the 2022 RMC, PAGCOR’s tax exemption extends only to those that have contracted with PAGCOR in connection with PAGCOR’s gaming operations.