By Hu Jingqi
(An overseas Chinese student pursuing a Bachelor’s degree in International Relations at Jinan University)
The Department of Justice recently announced the total shutdown of all offshore online gambling centers nationwide, enforcing a complete ban on the industry. Justice Secretary Fredderick Vida reported that aggressive enforcement following the official deadline led to the total elimination of these operations, declaring unequivocally that no offshore online gambling will be permitted in the country. This announcement represents a fundamental policy transition from limited regulation to absolute prohibition, bringing an end to an industry that once expanded at an unprecedented pace.
The rise and fall of Philippine Offshore Gaming Operators (Pogos) encapsulate the trajectory of an industry built on cross-border regulatory arbitrage. Designed to serve foreign gamblers — primarily from mainland China, where gambling is strictly prohibited — Pogos leveraged legal imbalances between nations. What began in 2016 under President Benigno Aquino III as a cautious attempt to bring unregulated internet gambling under oversight initially involved only about 30 licensed operators with negligible revenue impact.
Under President Rodrigo Duterte, however, Pogos experienced explosive growth. Facing fiscal constraints, the government promoted the sector as a new revenue engine, expanding licenses to around 300 operators by 2019 and drawing an estimated 150,000 foreign workers, mostly Chinese nationals. This influx created a temporary boom in office leasing and consumer spending. Yet, fiscal data reveals a stark disconnect between scale and public gain. While the Philippine Amusement and Gaming Corp. (Pagcor) generated roughly P3.7 trillion in total revenue during Duterte’s tenure, Pogo-related taxes peaked at just P6 billion in 2019 — a minuscule fraction of total gaming income.
Moreover, the industry brought severe social and institutional liabilities. The Anti-Money Laundering Council reported that over 20 percent of Pogo-related financial transactions were suspicious. Beyond financial irregularities, the sector became intertwined with human trafficking, fraud, kidnapping and illegal detention. As China intensified its crackdown on cross-border gambling, Pogos escalated from a domestic security challenge into a sensitive diplomatic strain.
These compounding risks rendered the industry untenable, prompting a decisive pivot under President Ferdinand Marcos Jr. Moving from initial regulatory attempts to complete withdrawal, the government revoked licenses, repatriated foreign workers and dismantled major gaming hubs between 2023 and 2024. Fiscal data validated this exit: although total gaming revenue dropped by five percent in 2025 to P106 billion, Pagcor’s net profit actually rose by 4.2 percent. This divergence confirmed that Pogos were never a vital economic pillar, but rather a high-risk, opportunistic sector exploiting legal loopholes.
Ultimately, the demise of the Pogo industry illustrates the structural boundaries of “grey globalization” — economic models that profit from regulatory asymmetries between nations. While the Duterte administration prioritized short-term fiscal returns at the expense of regulatory control, the Marcos administration reoriented state policy toward governance, public security and international alignment. The complete phase-out of Pogos demonstrates how strengthening national governance and deepening international law enforcement cooperation inevitably limit the viability of grey-zone economic operations.
