PAGCOR Release Q2 Report

Between the first and second quarters of 2020, the Philippine gambling industry saw its revenue drop by over 95 percent, but online gambling operators apparently contributed precisely nothing to this amount.

The Philippine Amusement and Gaming Corporation (PAGCOR) released its Q2 financial report on the gaming industry on Friday, which showed overall gross gambling revenue of just P2.4b (US$ 49.9 m) in the three months ending June 30, down 95.4% from Q1’s P52.9b.

PAGCOR has updated its financial reporting tables significantly, yet not in a way that gives more insight into gaming operations permitted locally. The data on Philippine Offshore Gaming Operators (POGOs), for instance, seems to have been folded into one of the remaining groups, although which one is not entirely clear.

As the Philippines struggled with its surging COVID-19 infections, which also severely restricted land-based gambling options, POGOs were ordered to close in mid-March. Until late-June, the first POGO sites were not authorised to reopen, so it is likely that there was actually no POGO revenue in Q2 to report.

But PAGCOR has also gone back and reformatted its Q1 statistics to fit the latest Q2 study, which is more streamlined. And despite PAGCOR reporting revenue of P1.8b when it released the original Q1 report in June, the Q1 report also doesn’t display a POGO group.

Other interesting inconsistencies remain between the initial Q1 report from PAGCOR and the revised edition. Previously, the regulator revealed the share of revenue generated from junket operators in its own operations of Casino Filipino as well as private-run, PAGCOR-licensed casinos in the gaming zone of Manila’s Entertainment Area.

The Entertainment City casinos posted junket-based VIP gambling income of P10.1b in the initial Q1 report. There is a single column clearly named ‘junket’ in the updated Q1 study that cites a figure of just under P1.7b.

PAGCOR has not disclosed what triggered this wholesale revamp, but the move came after a public gaffe by the accountants of the regulator, who in the original Q1 study mistakenly double-counted the Casino Filipino revenue stats. (A day later, PAGCOR rushed out a corrected version.)

Here’s, at any rate, what the latest report says. Gaming revenue from ‘PAGCOR Operated’ dropped from P12.9b in Q1 to just P126.4 m in Q2. The venues in the Entertainment City went from P33.9b to less than P2b, while the Clark freeport casinos fell from P3.9b to P186 m.

So far, only 29 of the 55 licenced POGOs have been cleared to resume operations by the Philippines’ Internal Revenue Bureau, but many of the others might rethink the wisdom of reopening at all after the government announced plans this week to raise the franchise tax in the sector from 5 percent of revenue to 5 percent of turnover. For government coffers, the new tax is tipped to collect P17.5b this year, if there are any POGOs left to tax.