Philippines to Deport 40,000 Chinese in Shutting Down 175 Online Casinos (Caixin)
2022-09-30
The Philippines will close 175 illegal offshore online gambling operations and deport about 40,000 Chinese workers starting next month, a justice department official said Monday. The crackdown on an industry that once provided a lucrative source of tax revenue was triggered by reports of murders, kidnappings and other crimes committed by Chinese nationals against other Chinese, justice ministry spokesperson Jose Dominic Clavano said. As of Sept. 7, there have been 27 kidnappings this year, 20 of which were crimes linked to or involving workers in the online gambling industry, according to police reports. In September, the Philippines closed three offshore online gambling operators and freed 274 Chinese workers who were forced to work for them. One of enterprises, called Lucky South 99, was run by a Chinese citizen and didn’t have a license, according to local media report. China’s Ambassador to the Philippines Huang Xi in a Sept. 21 phone call with Philippine Justice Secretary Jesus Crispin Remulla urged the Philippines to crack down on crimes related to online gambling and resolve a persistent social problem at the root. The ambassador pledged to work with the Philippine government to handle relevant issues, including deportation of Chinese workers. As China stepped up its ongoing eight-year anti-corruption campaign, many Asian casino operators turned to offline casinos and online gambling to lure Chinese gamblers. With a booming tourism industry and proximity to an international airport, Manila Bay in the Philippines became a popular location for offshore casinos. Offshore casinos mushroomed in the country after 2016 when authorities issued licenses to online casinos, locally known as Philippine offshore gaming operators, or POGO. The licenses allow gaming operators to offer online gambling services to noncitizens outside the Philippines via the internet, with bets and payments made outside the country. POGOs were required to pay a regulatory fee of 2% of gross gaming revenues. Under this arrangement, the country could protect its own citizens from gambling and potential money laundering while increasing tax revenue. The offshore gaming industry brought in 7.2 billion pesos ($122 million) in tax revenue in 2020, according to the Philippine Department of Finance. To ease Covid-related economic pressures, the Philippines imposed an additional 5% finance tax in 2021, prompting many offshore gaming operators to move to Cambodia and other places. As of Sept. 20, there were 34 licensed online gambling operators, down from 56 in 2019, according to the gaming regulatory authority. Tax revenue from the offshore gaming industry fell to 3.9 billion pesos in 2021 and 1.55 billion pesos in the first quarter of 2022. Several Philippine lawmakers joined calls to stop the POGO operations in light of rising crime. Philippine online gambling companies mostly target Chinese customers and hire Chinese-speaking workers from mainland China, Taiwan, Malaysia and elsewhere, legally or illegally. The workers are often subjected to forced labor, abuse, kidnapping, extortion and even murder. At the peak, Philippine offshore gambling operators employed more than 300,000 Chinese.
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