Having just reiterated to an audience of ICE-goers PAGCOR’s long-term commitment to the decoupling of its revenue-generating operator arm and its regulatory remit, it was apt to begin our discussion on that topic. 

“In the early part of my term as Chairman and CEO of PAGCOR, clearly one of the things that I saw was PAGCOR wearing two hats: that of a regulator and another as an operator. PAGCOR operates close to 40 casinos, so I thought this was not the right thing. I believe you cannot be both an operator and a regulator. So I pursued as such.” 

Plans to this extent have been floating since 2023, with a target of late 2026 or early 2027. Before the sales can take place, the official remit of PAGCOR must be altered, meaning a rewriting of the PAGCOR charter. It seems this administrational hold up is soon to be unblocked. 

“Part of the process of this decoupling is submitting and abiding by the rules of the Governance Commission for Government-Owned or Controlled Corporations (GCG). So as of the fourth quarter of this year, we have submitted all the necessary requirements and we expect that maybe in the next quarter, a decision will be made. Once the decision is made to decouple, it will be endorsed to the office of the President who will, if he approves it, have to sign an executive order. And that will basically separate the functions of PAGCOR, wherein the operations aspect will be auctioned off or sold, and PAGCOR will remain to be just a regulatory company.” 

Innovation is a watchword of events like ICE, but it is not universally positive; as the complexity of technology increases, the scale of its impact broadens, deepens and stretches in every direction. It is not a linear acceleration, and neither is it always clear whether fully white or black-market tech innovators are the ones at the cutting edge. 

Whichever of those it is, it’s very rare for the regulatory authorities themselves to be ahead of the curve. In the Philippines, loosening the state’s grip on industry may initially increase public trust, but the growth of the private gambling sector will also make the job of regulating it harder. Chairman Tengco appeared to be laying the groundwork for this reality and during his panel performance warned of discomfort to come. “Compliance over convenience.”  

Stemming the black market is one part of trust and perception maintenance. And that trust will have taken a blow from the catastrophic POGO programme – a blow from which it is still recovering. But a regulator’s role is often thankless, and the sale of casinos could result in masses of job losses, which is not usually popular with the aforementioned masses.  

“The first and biggest challenge is the labor force. We have a workforce of about 10,000,” he explained to Global Gaming Insider. “And the labor force of the operations group is the first one that will be affected. We will be selling the casinos and that would be about 5,000 or half of the workforce affected by the decoupling. So that is a major challenge I have to deal with. If there’s one thing I can tell you now, it’s that I will definitely protect the workers, meaning I’ll make sure their rights are protected and whatever compensation is needed in relation to their involuntary retirement would be. We will make sure all those who will be affected will get the proper compensation.” 

This will surely be the most immediate discomfort PAGCOR faces, and though one Chairman Tengco is most keen to address – it will likely not be the last. It is interesting then that during these, the final days of PAGCOR operating with a dual function, the Chairman is still extremely active in trying to secure and reinforce iGaming revenues. The enforced delinking of e-wallets and gambling sites reduced those revenues by around 49% in August. We asked the Chairman whether this was a good example of compliance over convenience. 

“Last August, when the decision by the Bangko Sentral of the Philippines was made, we were definitely affected by the delinking. Sales went down by as much as 40 to 45%. However, just like in anything, a gambler will always be a gambler. He will find means and ways to be able to gamble again. So, the numbers are slowly coming up and, at the same time, I am now putting together a position paper addressed to the Central Bank of the Philippines so that maybe we can review the delinking and, if possible, link these payment platforms again. It’s something that I’m currently studying, and I will make a recommendation to the Bangko Sentral at the soonest possible time. I’m not saying it will happen. I would like to be very careful on this. I am currently putting together a position paper.” 

The broad challenges facing the soon-to-be decoupled PAGCOR are not unique, but the specificities of context in the Philippines will have afforded Chairman Tengco certain unique insights. This is the purpose of regulators attending summits like these: to share common lessons from disparate jurisdictions. The notion of a borderless industry was a prevailing theme among many conversations at ICE, often appearing as justification for borderless, or at least ultra collaborative, regulatory movements. We asked the Chairman what the most important lesson he took from the event was and what he felt was the most valuable lesson he could impart on the world stage. 

“Number one is clearly my belief that we have to all work together. Whether you are in North America, you are in South Africa, you are in the Caribbean. I would like to advocate that all the regulators sit down and have coffee and exchange whatever. And clearly number two – and I want to impart this to all of them – let us strengthen the responsible gaming side of the industry. Whether it is land-based or online gaming, this is what we really have to give emphasis to. Now is a good time to show the world that we have responsible gaming initiatives and tools. Whether it is certain AI powered tools like self-exclusion, player monitoring of bets and deposits, gaming hotlines or rehabilitation centers. We all should give weight and time to the thought of strengthening responsible gaming.” 

Almost as a full stop to that end, the Chairman pointed to another positive development in his own jurisdiction, the establishment of a responsible gaming hotline. 

“We will have a new hotline for responsible gaming, and I am hoping that the responsible gaming call centre will be working by the latter part of the first quarter of this year. That is my goal. Maybe there will be a slide of one month or two, but definitely in the first half of this year, PAGCOR will have for the first time, a responsible gaming hotline.”