While the Philippine Offshore Gaming Operator (POGO) segment is falling out of favor, the Philippine Inshore Gaming Operator (PIGO) alternative could take over. If a current plan being developed by gaming regulators in the country comes to fruition, land-based casinos that launch online operations will need to be prepared to give up almost half their revenue to the Philippines in the form of taxes. That compares to the 5% “franchise tax” on turnover paid by the POGOs. 

PIGOs could be the up-and-coming online gaming star in the Philippines, provided operators can get past the tax rate. PAGCOR (the Philippine Amusement and Gaming Corp) is working on a tax framework that would require them to give up 42.5% of the online gaming revenue to the state, and would also have to pay a 5% “gaming systems fee,” according to Asia Gaming Brief and its sources. The end result, after all deductions, taxes and fees, is just a 28% take for the casinos. 

These percentages are apparently not fixed yet, according to the sources, and could be altered before the final draft of the framework is signed. However, the rates are expected to be “very close” to what has been projected and this means that PIGOs would be facing one of the highest tax rates of anywhere in Asia. The proposal would mean substantial revenue for the Philippines, but only if land-based casino operators believe it makes sense to launch a PIGO, and the suspected tax rate will almost certainly become a big obstacle to entry. 

Online casinos typically have much lower overhead than their brick-and-mortar counterparts. However, walking away with just 28% of the take won’t be too appealing to many companies, especially considering the costs associated with introducing the activity. PAGCOR believes the tax rate is necessary in order to overcome the losses incurred by the COVID-19 pandemic and to help put the country back on track, but it won’t be effective if the response is minimal.