Goodbye to Quick Bets: Why BSP is Ordering E-Wallets To Cut Ties With Online Gambling

Online high-rollers should expect a tougher time placing bets and cashing out as the Bangko Sentral ng Pilipinas (BSP) ordered all electronic wallets and other financial institutions to cut ties with gambling websites.

The Philippine central bank announced this in a statement on Thursday (August 15) citing a surge in online gambling transactions, which it feels is detrimental to the financial health of consumers.

“The BSP directive is issued in light of the surge in online gambling transactions and its impact on the financial health of consumers and their families, and considering the broader social cost,” according to the BSP statement.

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Philippine lawmakers have filed different bills that seek to monitor and restrict online gambling, such as blocking the use of e-wallets that make it easier for Filipinos to place bigger and faster bets. Some of the proposals also want online gambling itself outlawed.

In separate statements, GCash and Maya, the dominant e-wallet players in the country  backed by industry leaders Globe and PLDT, respectively, both said that they would comply with the central bank’s directive to unlink and remove icons that would allow easy payments for online gambling platforms.

"We share the BSP’s commitment to ensuring that digital financial services are used responsibly and in ways that protect the welfare of Filipinos," GCash said in a statement.

Maya, on the other hand, assured customers that their accounts would be safeguarded as the e-wallet platform complies with the directive.

“We remain focused on serving our customers while fully complying with regulatory requirements," it said.

Based on data from the Philippine Amusement Gaming Corp., online gambling has taken off as a lucrative industry with government revenues from taxes and fees paid by local e-gaming operators reaching P51 billion in the first quarter of the year.

These made up about half of the state’s total gaming revenues this year, with at least 80 e-gaming operators having licenses in the country.

The industry flourished during the Duterte administration starting in 2016 as the government opened the door to online gaming firms, with many of them being Chinese-owned and marketing to foreign customers.

In his third State of the Nation Address, Philippine President “Bongbong” Marcos, Jr. last year outlawed Philippine Offshore Gaming Operators, citing links to organized crime, human trafficking, money laundering, and financial scams.

Online e-wallets like GCash and Maya have services catering to gambling apps for convenient access, which has added to the popularity of e-gambling.

In 2019, there were around 298 licensed POGOs, with Pagcor cutting it down to just 48 last year.

The Philippine gaming industry saw gross gaming revenues (GGR) of P214.75 billion in the first half of the year, a 26 percent increase from the same period a year earlier. Pagcor said this was primarily driven by online gambling due to the surging demand.

The Department of Trade and Industry earlier reported a dip in business name registrations of 8.9 percent in July to 79,316, with experts attributing it to the ban on POGOs.

Based on the DTI’s system, 69,709 new business registrations were posted in July, with 9,607 being renewals.

In the first seven months of the year, registrations reached 708,336 or a 7.5 percent drop.

A 2023 report from Insider Monkey showed that the Philippines is the biggest gambling country in Asia with 76 casinos and 66 casino hotels.

Pagocr Chairman Al Tengco earlier said his agency is looking into higher collection fees for licensed gaming operators.

“Let’s see if we should raise it a little bit so that it will be more tight, or maybe it will backfire and the illegal (operators) will be more profitable,” he said..

The agency collects a 30 percent rate from online gaming platforms, which was a cut from the previous 35 percent to encourage more operators to register.