The Philippine government is weighing a 10 percent increase in taxes on online gambling operators, a move that could push the country’s regulatory burden—already among the world’s highest—even higher.
Government Exploring Stricter Oversight
Finance Secretary Ralph Recto revealed the possibility during an informal press briefing, noting that the government is evaluating tighter controls and heavier taxation to better regulate the sector.
“There are many ways of doing it. One is we leave it to PAGCOR,” Recto stated, referring to the Philippine Amusement and Gaming Corporation, the country’s chief gaming regulator. “PAGCOR, on its own, can increase the fees and charges it collects from online gaming.”
Currently, PAGCOR levies a 30% fee on electronic gaming, while the Bureau of Internal Revenue adds a 5% franchise tax, amounting to an estimated 38% effective tax rate on gross gaming revenue (GGR). Recto noted that an additional 10% hike could raise PHP20 billion ($341 million) annually for public coffers.
Proposed Measures Include ID Checks, Public Listings
Beyond taxation, the government is reportedly considering a package of new rules, including:
- Mandatory warnings about gambling addiction,
- Strict ID verification to restrict underage access, and
- A potential requirement for operators to list publicly for increased transparency.
Industry Pushback: “Already One of the World’s Heaviest Burdens”
However, the proposal has sparked backlash from industry figures who argue that any further increase would be excessive and may push operators into the grey or black market.
On July 13, Tonet Quiogue, gaming law expert and CEO of Arden Consult, released a policy brief opposing the tax hike. She warned that the cumulative tax burden could become unsustainable.
“The reality is that licensed online gaming companies already pay some of the highest taxes in the world,” Quiogue wrote.
She detailed that the effective license fee imposed by PAGCOR already averages 30% of GGR, with an additional 3% audit fee, plus the 5% franchise tax from the national government.
“Altogether, roughly 35–38% of each operator’s GGR is collected by the government even before any operating costs or profit are accounted for,” she explained.
GGR-Based Taxation: A Flawed Framework?
One of the core issues, Quiogue emphasized, is that operators are taxed on gross revenue rather than net income, a model rarely applied to traditional businesses.
“Even if a licensed operator incurs losses or earns minimal profit, it must still remit the full license fee, franchise tax, and audit fee,” she said. “This puts them at a structural disadvantage.”
