Philippines plotting crackdown on Chinese online gambling operations – The Diplomat


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An official said the crackdown was sparked by “reports of murders, kidnappings and other crimes committed by Chinese nationals against other Chinese nationals”.

A view of the financial district in Manila, Philippines.

Credit: Depositphotos

The Philippines intends to shut down 175 online gambling companies and deport around 40,000 Chinese nationals who work for them, as pressure mounts on the government to crack down on the shadowy online gambling industry.

A Justice Department official announced the plan on Monday, citing the ecosystem of criminal activity that has grown around the industry over the past six years. “The crackdown was sparked by reports of murders, kidnappings and other crimes committed by Chinese nationals against other Chinese nationals,” ministry spokesman Dominic Clavano said in a statement. . Reuters report.

Philippine offshore gambling operators, colloquially known as POGOs, began popping up in the Philippines in 2016. Comprised mostly of expatriate Chinese nationals, POGO operations primarily targeted customers in China. The industry’s growth coincided with the rise to power of President Rodrigo Duterte, who eased regulations on the arrival of Chinese nationals and initiated a foreign policy pivot toward Beijing.

But it also reflected the regional growth of the industry, which there is good evidence to link to Chinese organized crime networks that have long been active in the region. The years since 2016 have also seen the rapid growth of Chinese-backed gambling operations in other parts of Southeast Asia, particularly Cambodia and Laos, and in rebel-held regions. from eastern Myanmar.

When COVID-19 hit, many of these operations, particularly in Cambodia, turned into online scam operations that were associated with industrial-scale human trafficking. These operations lured hundreds, if not thousands, of people from all over Asia with offers of well-paid work, to confine them to fortified compounds and force them, on pain of beatings and other forms of torture, to commit phone and SMS scams. in their own languages.

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There are good reasons to suspect that the Philippines-based gaming industry has similar associations. A report by Philippine lawmakers released in January found a “clear link” between online gambling businesses and a host of nefarious activities, including human trafficking.

The reason the Philippine government has tolerated the growth of POGOs is simple. Reuters report on the next crackdown quoted estimates from real estate consultancy Leechiu Property Consultants, that POGOs bring in 190 billion pesos ($3.22 billion) to the country’s economy every year. Leechiu estimates that a complete exit from the POGO industry would leave 1.05 million square meters of office space vacant and 8.9 billion pesos ($151 million) in lost annual rent.

But the criminality that has surrounded the area has led to mounting pressure on the administration of President Ferdinand Marcos Jr. to do something about the POGOs and the thousands of Chinese nationals who are believed to have remained in the Philippines, beyond the expiration of their visas. . Earlier this month, Senate Majority Leader Joel Villanueva introduced a bill that would ban and penalize all forms of online gambling activity in the country.

“The consequences of gambling and online gambling are too serious to ignore,” Villanueva wrote in an explanatory note for the bill, which was tabled on September 6. “The cost of gambling is no longer limited to the loss of money, but extends to the loss of values ​​and lives.”

Given the criminal activity associated with the growth of Chinese gambling operations throughout Southeast Asia, a ban in the Philippines is likely only a matter of time. But it will take further monitoring to ensure that the ban has the intended effects.

A cautionary tale is offered by Cambodia, where the government stopped issuing new online gambling licenses at the end of 2020. It turns out that this only opened the door to much more “trade”. harmful telecom scam operations, the tolls of which continue to surface on a almost daily.

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