Philippines President Rodrigo Dutert hates gambling but money talks and now, he has flown in the face of his misgivings about gambling after having embraced very profitable Chinese internet casino investments.
Even more importantly, he has withstood vehement opposition – from his country’s influential defence establishment and from Beijing – to the expansion of so-called Philippine offshore gaming operations (POGOs), which are dominated by Chinese nationals.
During his first three years in office, his revenue quadrupled to US$ 4.1 billion. Licensing charges from new apps rose eleven-fold and by the end of the year were anticipated to reach US$ 152 million.
Much of the development is motivated by POGOs that employed tens of thousands of Chinese people who took benefit of the relaxed visa legislation of the Philippines under Duterte.
Conservative estimates placed the amount of Chinese working in the sector at 138,000, but many analysts and officials think it is nearer to 400,000 when there is an enormous influx of illegal Chinese employees.
Critics fear that internet casino platforms, often operate in an opaque way, could become avenues for illegal operations, including money laundering and drug trafficking, not to mention corruption and bribery to get around regulatory constraints.
However, senior Filipino defence representatives raised issues of national security. National Security Advisor Hermogenes Esperon characterised Chinese nationals ‘ influx as a prospective “threat.”
Secretary of Defense Delfin Lorenzana advised publicly of the prospect of POGOs becoming dens of spies. “[W]hen you already see many people there who are always there … it’s very easy for all these [Chinese] people to, perhaps, shift their activities to spying,” he said.
Lorenzana concentrated on the place and clustering of Chinese online casinos near the safety institutions of the country, including air force headquarters, navy, domestic police, department of defence, and army headquarters at Camp Aguinaldo in Quezon City.
Lorenzana proposed that POGOs be moved away from significant military facilities to self-contained campuses.
Meanwhile, a public outcry has been triggered by the fast rise in the amount of Chinese inhabitants across company districts in Metro Manila, while xenophobic comments flood social media.
Many Filipinos have been dismayed not only by restaurants and housing regions in “Chinese only,” but also–and more practically –by increasing rent and property rates (by as much as 40%) in latest years as a consequence of increasing Chinese space demand. The Philippines are concerned about what they perceive as a “Chinese invasion.”
Meanwhile, China’s criticism of POGOs has increased. Weeks before Duterte’s last visit to Beijing, the Manila Chinese Embassy published a heavily worded declaration calling on the government of the Philippines to shut down “the most dangerous tumour in modern society.”
“The Ministry of Public Security of China has taken many actions and will carry out more special operations aimed at preventing and combating cross-border gambling,” it said.
Beijing also emphasised its commitment to crack down on “organising gambling overseas and opening online gaming” and, accordingly, “destroy networks of criminal organisations involved in recruiting gamblers from China by overseas casinos and using the internet to open casinos in China”.
The declaration came as a spike in online casinos as violence against Chinese nationals employed, began. Authorities in the Philippines think that organised Chinese criminal organisations may have been behind several Chinese nationals ‘ abduction, torture and deaths in latest years.
Nevertheless, while in Beijing, where he met with President Xi Jinping and other senior Chinese officials, Duterte refused to budge on the problem.
When questioned about his talks with Chinese leaders on the problem, the Filipino leader said: “I decided that we need it. Many jobs will be lost. Anyway, it’s government-controlled.”
Highlighting the centrality of revenue from the gambling industry, he publicly warned online casino operators, “if you don’t remit, even just one non-remittance, you better close down.”
But the government in the Philippines has been pushing for a compromise.
The Philippine Amusement and Gaming Corporation lately announced as a concession to critics, including the Chinese government, that it will no longer issue fresh online casino platform licenses pending a extensive review.
The regulator proposed that it would probably limit the amount of POGOs to 61, as other Southeast Asian countries like Cambodia and Vietnam have also started to restrict online casino activities in China.
Nevertheless, Duterte seems determined to challenge all of his critics by hosting a flourishing and contentious Chinese-dominated gambling sector in the Philippines, where, as Gordon Gekko put it, another Wall Street character–”Money never sleeps, pal.”