Philippines shuts down 175 offshore gambling firms, deports 40,000 Chinese workers

MANILA (Reuters) – The Philippines will halt the operations of 175 overseas gambling firms and deport about 40,000 Chinese workers, as part of a crackdown on the shadowy gaming industry, a Philippine justice official said on Monday.

The sector emerged in the Philippines in 2016 and has grown exponentially, as operators have taken advantage of the country’s liberal gaming laws to target customers in China, where gambling is prohibited.

At its peak, overseas Filipino gambling operators, or POGOs, employed more than 300,000 Chinese workers, but the epidemic and high taxes forced many to work elsewhere.

“The campaign was launched due to reports of murders, kidnappings and other crimes committed by Chinese citizens against Chinese citizens,” said Justice Department spokesman Jose Dominic Clavano.

The POGOs targeted for closure have licenses that have expired or have been revoked, due to violations such as non-payment of government fees, Clavano said, adding that the deportation of Chinese workers will begin next month.

The government generated 7.2 billion pesos ($122.21 million) in 2020 and 3.9 billion last year in POGO fees alone, according to the Finance Ministry. Economists estimate that much larger sums are spent on taxes, labor spending, and office rentals.

The Chinese Embassy in Manila said in a statement that Beijing supports the deportation and suppression of crimes related to POGO, adding that the government “strongly opposes and takes strict anti-gambling measures.”

The Philippine regulator, which recently said there were 30 POGOs licensed as opposed to 60 before the pandemic, did not respond to a request for comment.

Leechiu Property Consultants estimates that a complete exit from the POGO industry will leave 1.05 million square meters (259 acres) of office space — a third the size of New York’s Central Park — and 8.9 billion pesos ($151 million) in annual rent.

The sector employs 201,000 Chinese and 111,000 Filipinos, according to Leichio data, which estimates POGOs provide 190 billion pesos ($3.22 billion) to the economy each year, a boon for the real estate and retail sectors.

(1 dollar = 59.01 Philippine peso)