In mid-September, Duterte also signed a new bill doubling revenues received from POGOs by introducing a new five per cent franchise tax on turnover rather than revenue which should see tax collections increased to P17.5bn to aid the Covid reform.
Tis is part of the Bayanihan 2 Act, which gives the President special powers to address the pandemic and aims to provide a P165.5bn stimulus fund.
Many Chinese workers are still unable to return to the Philippines and due to the obligations required only 33 POGOs have resumed to date whilst only 99 accredited local gaming agents and service providers have resumed operations compared to 218 operational at the beginning of the year. For any POGOs shutting up shop, there’s no escape. Taxes must be paid before a business can close to prevent companies fleeing the Philippines with outstanding debts.
As lockdown was lifted in the Philippines and online gambling resumed operations there were a series of tax obligations introduced for POGOs and their service providers, before permission to resume was granted. Te companies must:
1. Update and settle all tax liabilities.
2. Update payments for any regulatory fees, licence fees, performance bond or penalties
3. Remittance of regulatory fees for the month of April
4. Must be ready to implement safety protocols.
Monthly collections of around P600m in regulatory fees had fallen by half thanks to an 80 per cent decline in fees from POGOs and their service provides specifically.
In turn the decline of POGO operations is also having a negative affect on real estate, office leasing and government revenues. POGOs are accountable for about 1.34m sq.m of leased office space in Metro Manila.
Before POGOs were introduced the First Cagayan Leisure and Resort Corporation (First Cagayan) was the only government agency to issue licences for online gambling houses.
Te Cagayan Special Economic Zone and Freeport is in the northern tip of Luzon island and is made up of five provinces and four major cities. In 1995 it was given the power to regulate and operate under a different set of rules to stimulate economic growth and has its own set of laws regarding gambling which are not subject to PAGCOR regulations.
Te CEZA can issue licences for horse, dog racing, gambling, casinos and other tourism and entertainment facilities. Tere are three companies who serve as master licensors – First Cagayan Leisure and Resort Corporation; North Cagayan Gaming and Amusements Corporation and Cagayan Development and Leisure Corporation.
Leisure and Resort World Corporation (LRWC) acquired First Cagayan in 2005 and develops and operates internet and gaming enterprises and facilities in the CEZA. First Cagayan receives and processes applications for interactive gaming licences and regulates operators of internet gaming in the zone.
Licences are issued for a) interactive gaming licenses covering online gaming for casinos, lotteries, bingo, sports book and b) restrictive licences for sports betting only.
Tere are also two landbased casinos housed here – Te Eastern Hawaii Casino and the Cagayan Holiday and Leisure Resort.
LRWC’s First Cagayan Leisure and Resort Corporation GGR for 2019 was P458.3m, a 16 per cent increase on the previous year.
NEWSWIRE / INTERACTIVE / MARKET DATA P77
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