By Aubrey Rose A. Inosante and Revin Mikhael D. Ochave, Reporters
THE DEPARTMENT of Finance (DoF) is suggesting a tax on online gaming, alongside evaluating potential policies to limit unrestricted access to gambling, which includes digital gambling platforms.
Simultaneously, the Bangko Sentral ng Pilipinas (BSP) is preparing to release a circular mandating banks and e-wallets to safeguard their users from the escalating risks associated with online gambling.
This development arises as several lawmakers have introduced measures advocating for tighter regulations on online gambling due to reports of increasing addiction among Filipinos.
Finance Secretary Ralph G. Recto informed BusinessWorld in an e-mail that the department is “aware of the worries of Filipinos concerning online gambling.”
“In light of this, we are already researching and will propose an online gaming tax,” he stated, without providing further specifics.
“We are also exploring additional potential policy alternatives to deter unrestricted and nearly unlimited access to gambling, especially digital gambling platforms.”
Mr. Recto suggested instituting limitations on playing durations or cash-in amounts to aid in reducing addiction, along with providing clear warnings about the risks linked to gambling. He further proposed prohibiting government officials from engaging in various forms of gambling, including online gambling.
“Nevertheless, thorough analysis must be conducted by regulatory authorities concerning the administrative viability of enacting these suggestions, as well as any other supplementary requirements that may be necessary to mitigate the possible detrimental effects of gambling,” he remarked.
Mr. Recto stated that the DoF endorses “robust safeguards” to supervise all manners of gambling in the nation.
“Specifically, we firmly advocate for limiting access to gambling facilities to individuals who are at least of legal age. PAGCOR (Philippine Amusement and Gaming Corp.) already prohibits minors and those in financially vulnerable situations from entering gambling establishments,” he added.
Senator Sherwin T. Gatchalian previously introduced legislation aiming to enforce stricter regulations on online gambling, such as increasing the minimum legal gambling age from 18 to 21, in order to shield young Filipinos from early exposure to online gambling.
Mr. Gatchalian’s legislation also seeks to ban e-wallets from connecting to gambling sites.
Furthermore, it proposed raising the minimum cash-in requirement for online gambling platforms to P10,000, while requiring a minimum top-up of P5,000 to discourage compulsive gambling behavior.
At the House of Representatives, a bill was also introduced aiming to prevent electronic wallet platforms from advertising gambling applications.
BSP CIRCULAR
In an announcement, the BSP indicated that the circular would require BSP-supervised institutions (BSIs), primarily banks and electronic money issuers, to safeguard users from dangers linked to online gambling.
“Protection may include various restrictions on gaming access,” it mentioned, stating that the draft circular is pending feedback from involved parties.
“The BSP is adopting a cooperative strategy in drafting the circular, to ensure that the final regulation finds a balance between protecting consumers and maintaining access to digital payments for licensed enterprises,” it remarked.
Previously, the BSP prohibited BSIs from engaging with unlicensed gambling operators, and mandated e-wallets and other BSIs to eliminate links to electronic sabong (e-sabong) from their platforms.
“This action by the BSP is a positive step. Mandating banks and e-wallet providers to impose limitations and protections will assist in shielding vulnerable users, such as youth and those in challenging financial situations, from the advancing threat of online gambling,” remarked Ronald B. Gustilo, national campaigner for Digital Pinoys in a Viber message on Thursday.
However, Daesik Han, founder, chair, and chief executive officer of Hann Group remarked that stricter limitations will hinder the expansion of the Philippine gaming sector.
“As a regulatory body, it is quite reasonable for (the government) to establish stricter regulations, as there are negative aspects associated with gambling in society,” said Mr. Han during Money Talks with Cathy Yang on One News.
In May, PAGCOR reported that its gross gaming revenue (GGR) surged by 27.44% to P104.12 billion in the first quarter, with electronic gaming surpassing physical casinos in earnings for the first time.
The electronic operations generated P51.39 billion or 49.36% of GGR in the January-to-March timeframe.
GAMING STOCKS
Meanwhile, shares of DigiPlus Interactive Corp. and Bloomberry Resorts Corp. continued to decline on Thursday due to worries over potential legislation to restrict online gaming.
DigiPlus shares, led by Tanco, fell by 13.89% to finish at P38.75 each, while Razon-led Bloomberry decreased by 6% to close at P4.70 per share.
DigiPlus is the entity behind the sports betting platform ArenaPlus, digital bingo platform BingoPlus, and online gaming site GameZone.
Conversely, Bloomberry launched its MegaFUNalo online gaming platform last month to rival DigiPlus.
“The increased regulatory risk has triggered a widespread sell-off across the gaming sector, with DigiPlus being perceived as particularly vulnerable to potential restrictions due to its status as a leading digital gambling operator,” said Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz in a Viber message.
“On July 3, DigiPlus’ stock plummeted to its 30% daily limit amidst a surge in trading volume, exceeding eight times the average, following news that the bill had advanced in Congress. Similarly, Bloomberry has decreased by 22% since its recent peak,” she noted.
Ms. Estacio-Cruz indicated that gaming stocks are likely to fall further amid uncertainties stemming from the proposed stricter online gambling regulations.
“For the time being, although the initial sell-off seems to be influenced by sentiment, continued downward pressure is likely if regulatory hazards intensify or remain ambiguous,” she stated.
COL Financial Group, Inc. First Vice-President April Lynn C. Lee-Tan remarked in a Viber message that investors might remain cautious until there is clearer insight into the bill’s advancement.
“The final version remains uncertain. The bill definitely poses a concern for them (gaming companies) as it may hinder the financially disadvantaged from continuing to gamble,” she commented.
Meanwhile, DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin expressed that a relief rally is anticipated as there’s no finality yet regarding the details of the bill.
“While the bill could impede growth if enacted, it is still pending — prompting a significant relief rally. The market is now awaiting further clarity on whether the bill is enacted or not,” he mentioned in a Viber message.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet expressed that the sharp fall in gaming stocks is merely temporary.
“We expect that any finalized legislation will foster and enhance responsible online gaming due to its significant revenue contribution to the government,” he noted in a Viber message.
