Industry news

President Duterte Is Cracking Down on Online Gaming in the Philippines

Industry news

President Duterte Is Cracking Down on Online Gaming in the Philippines

In the days since our last report on President Rodrigo Duterte’s crackdown on gambling in the Philiippines, the new national leader has started to wage a war against online gambling in the country. CNN Philippines reported on Monday “the industry’s future is now in danger“.


The same report indicated that Duterte’s punitive measures and arbitrary sense of justice may cause investors in other industries to shy away from investments in the Philippines.


The state-run Philippine Amusement and Gaming Corp. (PACGOR) has been ordered to suspend applications for online gambling sites. Also, existing gaming licenses might be suspended. These measures have caused the stocks of casino companies and gaming companies operating in the Philippines to lose value, since Duterte became the president on June 30, 2016.


PhilWeb Is the First Target

In his first 10 days in office, PACGOR has targeted PhilWeb, which owns 300 cyber-cafes in the country. PhilWeb Chairman Roberto Ongpin (pictured above) was singled out by Duterte, who has said Ongpin “must be destroyed“. Besides running a business Duterte considers detrimental to society, Ongpin stands accused of using his wealth to “sway Filipino politics”. Ongpin’s e-gaming business is a small contributor to his wealth, which mainly was made in the oil business.


It is a chilling maneuver, which indicates Filipino politics has entered a zero-sum era. If a person speaks out against a political candidate, they stand to lose everything if that candidate should become president.


Roberto Ongpin stepped down from his chairmanship of PhilWeb, in hopes of saving the company. Whether that can save PhilWeb is another matter. Investors do not seem to think so, as PhilWeb stocks have plummeted in the days since Duterte signalled he wanted the company punished.


The Philippines have seen a marked upswing in gaming investments in the past 6 years. The country has seen a 724% increase in the number of gaming machines placed, up to 17,808 from only 2,160 in the year 2010. Investors from Japan, China, and Australia have made billion-dollar investments in brick-and-mortar casinos in Manila.


Stocks Plummeted Since June 30

Rodrigo Duterte might be right about Roberto Ongpin. The gaming operator was accused in 2014 of detaining an employee he accused of stealing company funds. Charges were brought against Ongpin by the previous Filipino administration in that case. If those charges were true, then Ongpin may have engaged in the same kind of extralegal justice Duterte engages in.


Yet the case sets a bad example for an industry and, indeed, for a whole country.


Alex Tiu of AB Capital Securities said his firm has tracked the fall of stock prices in the past two weeks. Tiu said, “We saw several stocks either related [to] or has online gaming business that [went] down.”


The crackdown on gambling is likely to have a withering effect on investments in the Filipino gaming industry. Astro Del Castillo, the President and Managing Director of First Grade Finance, said traders who normally might invest in the gaming sector are likely to “shift to companies who are fundamentally stable“.


The effect might be felt to a lesser degree on all investments in the Philippines. President Duterte has expressed a disdain for democracy, causing many to fear the Philippines in on an all-too-familiar path towards dictatorship.


“Waging a War”

Duterte has said he is going to wage war against “narco-politics” in his country. He has vowed to maintain a “shoot-to-kill” policy towards drug dealers and drug suppliers on the streets of the Philippines. What’s more, Duterte has turned on officials in the government, claiming they have ties to drug syndicates. In the past few days, he has accused 158 government officials of drug ties.


The list of officials includes police chiefs, military officers, judges, and lawmakers. So far, three lawmakers and seven judges have been accused of drug crimes. What’s more, President Duterte appears to be inciting followers to kill anyone accused of drug crimes, without due process. Transcripts Al-Jazeera had obtained quoted Duterte as saying, “I don’t care about human rights, believe me.”


Normally, it pays not to believe people when they follow statements with the phrase “believe me”. As a general rule, if you’re telling the truth, you don’t have to tell people you’re telling the truth.


800 Vigilante Killings Since May

These are not idle threats. Since Duterte won the presidency in May 2016, 800 people accused of drug crimes have been slain in the streets. Because due process is not being followed, the killings have taken on the pattern of a witch hunt: people can take retribution for old grudges, then conveniently accuse the murdered of dealing drugs.


The state-funded Russia Today (RT International), hardly a bastion of democracy, reported that some of the vigilante justice has been meted out against “junkies”–not drug dealers.


President Duterte’s actions spurred one Catholic archbishop to give a sermon, criticizing the new state of affairs. On Sunday, August 7, Archbishop Socrates Villegas said to his congregation, “I am in utter disbelief. If this is just a nightmare, wake me up and assure me it is not true. This is too much to swallow. From a generation of drug addicts, shall we become a generation of street murderers?”


Calls the US Ambassador an S.O.B.

Rodrigo “Digong” Duterte has undermined his relationship with allies, too. In the run-up to the presidential elections, Digong made controversial statements. Since he has become president, Duterte seems to be feeling his power.


Now that he is in power, President Duterte is unwilling to listen to criticism. When savaged the U.S. Ambassaddor, Philip Goldberg, cautioned Duterte to follow normal western standards of justice, Duterte claims to have called the ambassador names. He told RT, “I had an argument with their ambassador, that ‘bakla’ [gay]. Son of bitch, he really annoys me.”


Picking a Fight with the United States

Duterte also accused the US of exporting terrorism to the Middle East. While legitimate criticisms can be labeled at US foreign policy, the United States currently backs the Philippines in its ongoing dispute with China, which has built artificial islands in the defensive perimeter of the island nation. For a president who has built his reputation on natural law, Duterte should understand the United States is the only thing standing in the way of China establishing a presence on the doorstep of the Philippines. Insulting US officials seems needlessly antagonistic and counterproductive for his own cause.


The new Filipino president accused Philip Goldberg of being against him in the presidential election, giving statements “here or there”. That might well be the case, because the Philippines is a cornerstone of U.S. foreign policy in the Western Pacific, as well as an area of investment for American business. Having a wild card as president will discourage investments in the country, which could set back development in the Philippines by decades. Goldberg’s main criticisms had to do with Duterte’s insensitive remarks about the rape and murder of an Australian missionary, which trivialized violence against women.


PhilWeb: Online Gambling?

The PhilWeb case is an example of the amorphous nature of Filipino justice right now. People and companies are guilty of crimes right now, simply because President Duterte said so. Duterte accused PhilWeb of being an online gambling company, which is why PACGOR seeks to punish it.


PhilWeb President Dennis Valdes made a distinction between e-games and online gambling in a statement this week, but it is unlikely the new administration cares. Mr. Valdes said, “PAGCOR e-games is not online gaming. It is a private, members-only network of clubs where players need to be physically present . . . access to these clubs is strictly controlled such that it is only open to members who are over 21 years old and are financially capable of gaming.”


Electronic gaming in a brick-and-mortar facility is not online gambling. Every jurisdiction in the world agrees, or else Las Vegas slot machines, Australian pokies, and Japanese pachinko parlors would be considered online gambling. In the new reign of Rodrigo Duterte, that hardly seem to matter. PACGOR feels like e-gaming is online gambling, and facts equal feelings.


Re-posted from:

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