Philippines President “Duterte Harry” Targeting iGambling Sites

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Monday, July 25th, 2016 | Written by Stephen Smith

The newly inaugurated President of the Philippines, Rodrigo Duterte, has wasted no time in letting the people know that he plans to do all he can to clean up the country over the next 6 years in office. In an address that followed his oath of office on June 30, 2016, Duterte spoke outside the Malacañang Palace in a formal address and then gave a far more intimate address to a crowd of 500 assembled in a slum in Manila. Later on, he met with his cabinet for the first time.

Throughout all three events, Duterte was characteristically outspoken. He told people to murder addicts that they knew because they were destroying the next generation of Filipinos. He also echoed his campaign promises to reduce crime in the Philippines. With his cabinet, he said that online gambling had gotten out of hand. He stated that e-bingo sites and Internet casinos were hurting society, and expressed his belief that it was impossible to properly collect taxes from them.

Current State of Gambling in the Philippines

Gambling has been on the rise in the Philippines in recent years. During the presidency of Duterte’s predecessor, Benigno Aquino III, the number of e-bingo machines in the country rose from 2,160 to around 12,000, while an additional 87 new Internet cafes intended for online gaming opened during his six years in office. Land-based casinos also saw an increase in traffic, as the crackdown on casinos in Macau brought more tourists through their doors.

While the increase in gaming was good news for everyday players and gambling operators, the story out of the Philippines wasn’t all positive. Last year, two casinos in Manila were vehicles for money laundering and were exposed in a high profile case that involved a major theft from the Bangladesh National Bank through the U.S. Federal Reserve.

What Duterte May Mean for Gaming

The impact of Duterte’s anti-online gaming stance is being felt immediately. The Philippine Amusement and Gaming Corp (PAGCOR) already issued a statement saying that they were putting a freeze on the issuing of new online gaming licenses, and the chairwoman of PAGCOR, Andrea Domingo, stated that those were only the most imminent changes, and that PAGCOR would be waiting for further instruction from Duterte regarding how to proceed. As Domingo explained during an interview:

“For now, we will freeze the issuance of licenses for these types of games, and then review what the President said.”

As the Mayor of Davao City, Duterte was not afraid to make enemies and introduce radical changes that he believed would better the city. Most familiar with him believe that if he sees online gaming and gambling in general as a threat to the Philippines, he will do what he can to try and regulate the industry more strictly, or to abolish it completely. Although Filipino presidents are only elected for one term in office, Duterte could cause a major upheaval in the industry over the next 6 years.

In the meantime, the Philippine National Police (PNP) has declared its intention to clampdown on illegal gambling bosses and syndicates, although PNP Chief Director General Ronald admitted that the illegal drugs trade was his more immediate concern.

“After illegal drugs, criminality and corruption, that will be our next target. Maybe after six months. We cannot be fighting in all fronts, so we have to remain focused.”

Nicknamed “Duterte Harry”

The Philippines’ controversial President has been dubbed “Duterte Harry” after the Clint Eastwood character who takes a hard-line approach to law enforcement. Even Harry may balk at some of Duterte’s proposals, though, who when indirectly addressing the country’s drug dealers was quoted by the Cebu Daily News as saying:

“If I couldn’t convince you, I’ll have you killed. Just imagine if I kill 10 persons a day for the next six years. If you’re into drugs, I’m sorry. I’ll have to apologize to your family because you’ll surely get killed.”

Since then, dozens of suspected drug dealers have been killed by police during gun fights, or have been found dead in the streets, with one sporting a sign stating: “Don’t follow me or you’ll die next.”

Benefits to Macau

In terms of the bigger picture, industry analysts predict that Duterte’s presidency and a potential crackdown on gaming could benefit Macau where new casinos have recently opened, or are in the final stages of construction. According to Sanford C. Bernstein analyst, Vitaly Umansky, Macau’s casinos are likely to experience a direct positive impact on their revenue on account of the Philippines crackdown on offline casinos, explaining:

“The latest scrutiny could be a net positive for Macau casinos as these websites have previously targeted gamblers in China. More importantly, it is unclear if any new government regulation or legislation could also target proxy betting in the form of online video streams occurring in junket rooms within Philippine casinos.”