An Archipelago in Midstream By Shaun McCamley
The Philippine gambling industry, long regarded as a significant contributor to the nation’s economy, is undergoing a period of dynamic change. With its dual-pronged approach encompassing both land-based and online operations, the Philippines has emerged as a regional leader in Southeast Asia's gaming sector. However, evolving regulations, shifting consumer preferences and technological advancements are reshaping the landscape.
A Pillar of Tourism and Employment
The land-based casino sector in the Philippines plays a pivotal role in the country’s tourism-driven economy. With iconic casino resorts like Okada Manila, Solaire Resort & Casino, City of Dreams Manila, and Resorts World Manila, the country attracts millions of local and international tourists annually. These integrated resorts (IRs) combine luxurious gaming spaces with entertainment, hotels, retail, and fine dining, appealing to high-rollers and casual gamblers alike.
Regulatory Oversight andPAGCOR’s Dual Role
At the heart of the Philippine gambling ecosystem is the Philippine Amusement & Gaming Corporation (PAGCOR), a government-owned and controlled corporation. PAGCOR operates as both regulator and operator, managing its own network of casinos while issuing licenses to private operators. This dual role has historically been a subject of debate, with some arguing that it creates potential conflicts of interest.
Recent regulatory developments have seen increased oversight and stricter enforcement of rules to ensure the integrity and security of the gaming industry. PAGCOR has been instrumental in implementing anti-money laundering protocols and responsible gambling measures, aligning with international standards.
Revenue Contribution
The contribution of land-based casinos to government coffers is substantial. PAGCOR remits a significant portion of its revenue to the national treasury, supporting infrastructure development, social programs and disaster relief. In 2019, before the Covid-19 pandemic, the gross gaming revenue (GGR) from land-based casinos surpassed PHP 200 billion.
In 2024, the Philippine gambling industry achieved a record-breaking gross gaming revenue of over PHP 350 billion (approximately $6 billion), surpassing the previous year’s GGR of PHP 285 billion. This growth was significantly driven by the rapid expansion of the electronic-gaming sector, which includes eCasino, eBingo, sports betting and specialty games.
Looking ahead, the Philippines’ casino-gaming market is projected to continue its upward trajectory. Between 2025 and 2029, the market size is expected to increase by almost $4 billion, reflecting a compound annual growth rate (CAGR) of 10.4 percent. This forecast indicates a robust expansion in both land-based and online gaming segments.
Image: Shaun McCamley
Challenges
Despite its strengths, the land-based sector faces challenges, including:
- Intense regional competition: Neighboring markets like Singapore, Malaysia and Macao continue to pose competitive threats.
- Infrastructure constraints: Poor connectivity and underdeveloped infrastructure in some areas hinder regional expansion.
- Regulatory uncertainty: Ongoing debates about PAGCOR’s regulatory reforms and its possible privatization create uncertainty.
The Transition from POGOs to PIGOs
Online gambling in the Philippines gained international attention with the rise of Philippine offshore gaming operators (POGOs). Introduced in 2016, POGOs catered primarily to international markets, particularly China, providing online casino games, sports betting and live-dealer experiences. However, due to various issues including tax evasion, illegal employment and links to criminal activities, the government began phasing out POGOs starting in 2022.
In their place, the government introduced a new regulatory framework for Philippine inland gaming operators (PIGOs). Unlike POGOs, which primarily targeted foreign markets, PIGOs are designed to operate domestically and cater to Filipino residents. PIGOs are required to be licensed by PAGCOR and comply with strict regulations to ensure responsible gaming, and to prevent illegal activities.
Economic Impact of PIGOs
PIGOs are expected to generate substantial revenue for the government through taxes and licensing fees while promoting a more regulated online gambling environment. Operators of large land-based casinos, such as Okada Manila and Solaire Resort & Casino, have already obtained PIGO licenses, integrating their online platforms with existing physical operations. This allows them to offer a seamless gaming experience across both channels.
The shift to PIGOs reflects the government’s strategy to harness the economic benefits of online gambling while addressing concerns about unregulated offshore operators. PIGOs contribute to job creation within the country and provide local players with access to legal online gaming options.
Regulatory Enhancements
To support the transition from POGOs to PIGOs, PAGCOR has implemented enhanced regulations focusing on:
- Tax compliance: Ensuring that operators pay the correct taxes, with revenues allocated to infrastructure and social programs.
- Player protection: Introducing responsible-gambling measures, such as self-exclusion programs and spending limits.
- Technology and security: Requiring operators to adopt robust security measures to prevent data breaches and fraud.
Challenges During the Transition
While the shift to PIGOs is viewed positively, challenges remain, including:
- Public perception: Addressing lingering negative perceptions of the online gambling sector due to POGO-related controversies.
- Market maturity: Ensuring that operators develop engaging and diverse gaming options to attract local players.
- Compliance monitoring: Strengthening oversight to prevent illegal gambling activities from resurfacing.
Live-Dealer Games and Streaming
The popularity of live-dealer games, which replicate the experience of a physical casino through real-time video streaming, has been a game-changer for the online sector. Leading online casinos in the Philippines use advanced streaming technology to provide immersive gaming experiences, drawing players seeking a more authentic and interactive environment.
Mobile Gambling
Mobile devices have become the primary medium for online gambling in the Philippines, driven by widespread smartphone penetration and affordable data plans. Operators have optimized their platforms for mobile users, offering seamless gaming experiences across devices.
Social Casinos
The emerging social-casino segment is becoming increasingly important within the broader gaming industry due to its unique role as a bridge between traditional gaming and casual entertainment. Although social casino games do not involve real-money gambling, they offer a virtual experience of casino-style games, and their significance is growing for the following reasons …
Revenue Generation Through Virtual Goods and In-App Purchases
Social casino games generate significant revenue by offering in-game purchases such as virtual chips, skins or power-ups. Players often buy these items for enhanced gameplay without the risk of monetary loss. Global social casino revenue surpassed $7 billion in 2023, and the Philippines is experiencing growth due to rising mobile penetration and engagement. Although players do not win real money, the psychological thrill of casino-style play continues to drive in-app purchases.
Expanding the Gaming Ecosystem
The social casino sector introduces casual gamers to casino-style games in a risk-free environment, often serving as a funnel that drives players toward real-money gambling platforms. Some players migrate to real-money gambling after gaining familiarity and confidence through social games. Conversely, social casinos allow operators to retain engagement with players who may not want to gamble with real money.
Monetization Opportunities Beyond Gambling
The social casino model leverages advertising and brand partnerships, providing additional revenue streams beyond in-app purchases. Ad placements, reward videos, and cross-promotional campaigns are becoming more common and lucrative. As the segment grows, collaborations between gaming companies and brands are expected to increase, boosting industry profitability.
Appealing to a Broader Audience, Including Non-Gamblers
Social casinos attract a diverse player base, including those who may not typically visit traditional or online casinos. By offering fun, interactive, and social gameplay, they appeal to players who prioritize entertainment over winnings. This broad appeal includes younger audiences and mobile-first users — key demographics for long-term growth in the gaming market.
Cross-Platform Engagement and Loyalty Building
Operators use social-casino games to enhance player loyalty and encourage cross-platform engagement. For example, players can earn rewards or loyalty points in social casinos that can be redeemed in land-based or online casinos. The integration of gamified features, leaderboards, and social sharing helps maintain user retention and engagement.
Technological Innovation: AR, VR and Metaverse Integration
Emerging technologies like augmented reality (AR), virtual reality (VR) and metaverse gaming environments are expected to further boost the popularity of social casinos. These innovations create immersive gaming experiences that can rival traditional gambling platforms. As virtual spaces evolve, social casinos may adopt more lifelike, interactive features, making them attractive spaces for both casual and serious gamers.
Challenges and Risks
While the segment is thriving, it does face challenges, such as:
- Regulatory scrutiny: Some jurisdictions view social casinos as potential gateways to gambling addiction due to their casino-like features. Regulators may impose limits on in-app purchases or require clearer distinctions between social and real-money gaming.
- Monetization cap: As players do not spend real money to gamble, the spending ceiling may be limited to in-app purchases, unlike real-money casinos, which generate greater returns from high rollers.
The Future of Social Casinos in the Philippines
In the Philippines, social casino games are expected to grow due to:
- High mobile-adoption rates: With a significant portion of the population having access to smartphones, the mobile-gaming market is booming.
- Increasing exposure to social-gaming platforms: Partnerships between local gaming operators and international firms could drive growth.
- Potential cross-promotion opportunities with real-money gambling: As more land-based and online casinos adopt digital-marketing strategies, social casinos could play a role in player acquisition and retention.
Conclusion
The emerging social casino segment is no longer just a casual pastime but a strategic pillar in the gaming ecosystem. It offers opportunities for operators to generate revenue, build brand loyalty and expand their player base, particularly among younger and non-traditional audiences. With advancements in technology and cross-platform integration, social casinos will likely continue playing a pivotal role in shaping the future of the Philippine gaming industry while complementing traditional and online gambling Blockchain and Cryptocurrencies
The adoption of blockchain technology and cryptocurrencies in online gambling is gaining traction globally, and the Philippines is no exception. Blockchain enhances transparency and fairness, while cryptocurrencies provide secure and anonymous transactions. Some local operators are exploring blockchain-based platforms to appeal to tech-savvy players and ensure regulatory compliance.
AI and Personalization
Artificial intelligence (AI) is being leveraged to enhance customer experience and security. AI-driven algorithms analyze player behavior to offer personalized game recommendations, detect problem gambling patterns and prevent fraudulent activities.
Growth Opportunities for Land-Based Casinos
Despite the challenges, the future of land-based casinos in the Philippines remains promising. Key growth drivers include:
- Integrated-resort expansion: Several major projects are in the pipeline, such as the development of Entertainment City’s Phase II and regional casino hubs outside Metro Manila.
- Foreign investments: Liberalization of foreign-ownership laws is expected to attract international casino operators and investors.
- Tourism revival: As international travel resumes, the Philippines’ reputation as a gaming and leisure destination is likely to boost visitation and spending.
To stay competitive, operators must enhance their offerings by incorporating non-gaming amenities, such as family-friendly attractions, cultural events and wellness centers to broaden their appeal.
The Evolution of Online Gaming
The online sector is poised for rapid growth, driven by:
- Regulatory clarity: Continued efforts to formalize the domestic online gambling market will provide a stable framework for growth.
- Technological advancements: Innovations such as VR and AR could revolutionize online casino experiences, providing fully immersive environments.
- Global expansion: Philippine-based operators may seek to expand their services to international markets, leveraging favorable regulatory conditions and competitive service offerings.
Challenges and Risks
The industry’s future is not without risks. Regulatory unpredictability, potential over-reliance on certain markets (such as China for POGOs) and societal concerns about gambling addiction are critical issues that must be addressed. Moreover, online gambling faces cybersecurity threats, including hacking and data breaches. Operators must invest in robust security systems and collaborate with regulatory bodies to ensure player safety.
Policy Recommendations
To sustain growth and address challenges, the government and industry stakeholders should consider the following measures:
- Strengthen regulatory frameworks: Ensure consistent enforcement of rules to prevent illegal activities, protect consumers and maintain industry integrity.
- Promote responsible gambling: Expand programs focused on player education, self-exclusion options, and treatment for gambling addiction.
- Encourage technological adoption: Support the integration of emerging technologies to enhance competitiveness and security.
- Enhance infrastructure development: Improve transportation, telecommunications and tourism infrastructure to support regional expansion.
Foster collaboration: Encourage public/private partnerships to promote innovation, investment and sustainable growth.
Conclusion
The Philippine land-based and online casino industries stand at a crossroads, with immense opportunities for growth alongside significant challenges. The country’s strategic location, skilled workforce and proactive regulatory environment position it as a regional powerhouse in gaming. However, achieving sustainable success will require balancing innovation with responsibility, attracting investments while safeguarding social welfare and maintaining a forward-looking regulatory approach. With thoughtful planning and collaboration among stakeholders, the Philippines can solidify its status as a premier destination for both physical and digital gaming experiences, driving economic growth and enhancing its global reputation.
About Shaun McCamley
Shaun McCamley is a well-known figure in the gaming and casino industry with extensive experience in various aspects of casino operations, management and consulting. He has held several high-profile positions, and has been instrumental in the development and success of numerous gaming ventures around the world. McCamley's expertise spans areas such as casino management, gaming operations, digital gaming, regulatory compliance and strategic planning. He is often at the forefront of adopting new technologies and innovative practices in the gaming industry.
***This exclusive legislation feature was originally published in Casino Life Magazines February 2025 edition Issue 174 **
