The Philippines: From record online growth to decline – can the market bounce back?

The Philippine online gaming market has undergone a rapid transformation, shifting from an offshore-gaming-led model dominated by POGOs to a predominantly domestic, regulated digital gaming sector, meaning operators known as PIGOs - Philippine Inland Gaming Operator.

Following the POGO ban in late 2024, PAGCOR’s subsequent fee reductions helped create more favorable conditions for licensed PIGO operators. These measures initially supported rapid market expansion, with online gaming emerging as the largest contributor to Philippine gaming revenue in 2025.

However, the growth has increasingly been accompanied by regulatory intervention, as authorities have tightened advertising, payments, responsible-gaming and compliance requirements. This led to a market contraction, which can also be attributed to economic pressures.

All of these points are outlined and discussed below, along with the question: Is market decline reversible?

POGO ban reshapes the market

In July 2024, Philippine President Ferdinand Marcos banned offshore gambling operators, better known as POGOs in industry circles. The December 31, 2024 deadline was the cutoff for POGOs to cease operations under the Executive Order completely. After this deadline had passed, authorities warned that remnants of the industry remained active. Enforcement continued into January 2025 to cleanse the country of remaining operators.

Later, in October 2025, the President signed the law institutionalizing the prohibition on POGOs and imposing a penalty of up to PHP 50m ($810,000) on violators.

Originally intended to increase government revenue, these operators evolved into major hubs for transnational organized crime connected to a multitude of illegal activities, including but not limited to scam compounds and financial fraud.

How did PAGCOR’s tax cuts support licensed online operators?

To motivate remaining illegal operators to transition to a legal, licensed framework, the regulator PAGCOR slashed taxes on online gaming for licensed onshore operators. Another goal was to increase government revenue, as the new funding stream was likely needed following the POGO ban.

In April 2024, PAGCOR lowered gambling remittance fees for both online and land-based operators. Chairman Alejandro Tengco then stated: “The remittance rates should then average around 35% of GGR, which is quite significant because when we assumed office in August 2022, the prevailing remittance rate was over 50%. We have gradually lowered them so that by 1 April, our rates will be at par with global industry standards.”

He added that this was intended to incentivize illegal operators to apply for licenses under PAGCOR.

Later on, PAGCOR further reduced its fee rates for Electronic Games (E-Games) from 35% to 30%, effective January 1, 2025, as part of efforts to combat illegal gaming operations.

Tengco also noted that the rates for E-Games operated by integrated resorts were reduced to 25% to help offset the overhead expenses faced by brick-and-mortar operators.

PAGCOR-regulated operator Buenas PH argues that the prohibition on POGOs removed market distortion, effectively redirecting investment toward compliant domestic digital operators. The operator also highlighted the impact of reducing tax rates for onshore operators.

Online gaming reaches a record

Indeed, all of these favorable developments led to growth in the licensed online sector, even though expansion started even earlier. According to some industry analysts, the domestic online gaming sector expanded twenty-fold between 2022 and 2025. Thus, favorable conditions might have only accelerated the already existing underlying growth trend.

Nevertheless, the Philippine gaming industry generated a record PHP 396bn in Gross Gaming Revenue (GGR) in 2025. The online gaming segment drove the growth, surging to PHP 201.12bn and overtaking the traditional land-based casino segment for the first time.

The shift toward stricter regulation

What seemed to be a rare case of a regulated, booming online Asian market was soon weakened by restrictions. By spring 2025, the regulator was under pressure from growing public concerns and criticism from religious groups and lawmakers. PAGCOR worked to bring the sector in line with more mature regulatory markets worldwide.

In July 2025, PAGCOR ordered all licensed online gambling operators to remove outdoor gambling ads by August 15, 2025.

It also announced it would introduce stricter advertising rules, including bans on gambling ads near schools, churches and hospitals, as well as during TV prime time, to reduce gambling-related harm.

Later on, the Philippine central bank, BSP, instructed supervised digital wallet providers to remove in-app links and access points to licensed online gambling platforms. According to subsequent industry analysis, the disconnection was completed by August 17, 2025.

Then also came the ban on credit cards and crypto in gaming, the implementation of stronger ad controls and responsible gaming tools. Furthermore, PAGCOR expanded regulation to cover gaming support companies such as affiliates, payment processors, suppliers and KYC providers.

Most of these measures align with responsible gambling trends in other jurisdictions. However, some might argue that operators were suddenly overwhelmed by a rapid succession of new regulations.

Historically, there were much stricter proposals, including a total ban on online gambling. Most recently, Sen. Francis “Chiz” Escudero is pushing Senate Bill No. 2347, which would introduce a nationwide, legally enforceable ban on gambling advertising and sponsorships across all media platforms. It would prohibit celebrity and influencer endorsements and bonus incentives.

Why did online gaming lose momentum?

Following this wave of regulatory tightening, which both raised compliance costs and restricted the accessibility and marketing of online gambling, the sector began to shrink.

In Q2 2026, online gambling GGR amounted to PHP 39.85 billion, falling by approximately 37%. Prior to this figure being published, PAGCOR estimated that the total gaming industry could post lower gross gaming revenue (GGR) in 2026, declining by as much as 19% and driven by a fall in online gaming.

According to Tengco, one factor behind the projected decline is the removal of e-wallet links from online gambling platforms. The policy has affected electronic gaming operations, with segment revenue declining 22.43% to PHP 39.9bn during the first quarter.

Meanwhile, according to Teneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes, the electronic gaming segment, previously the industry's main growth driver, has become vulnerable to broader economic pressures.

They also argue that the Philippine gaming sector is likely to remain under pressure in the coming quarters as high inflation, rising fuel and transport costs and cautious consumer spending weigh on demand.

Is GGR decline reversible?

The recent decline in online GGR suggests that the market may be adjusting to a regulatory framework closer to that of more mature gaming jurisdictions. At the same time, it remains difficult to determine how much of the slowdown is attributable to regulation and how much reflects broader economic pressures.

The Philippines is certainly moving away from a growth-first approach toward a model that prioritizes player protection and regulatory control. The online gaming market might eventually stabilize following the recent contraction, but a return to its record 2025 levels appears increasingly unlikely. This is, of course, a scenario excluding sweeping regulatory sector restrictions.

The key challenge for policymakers will be to ensure that further restrictions do not weaken the market. With the current political climate, it doesn’t seem they will rise up to the challenge.