How has the Philippines emerged as a hub for iGaming in Asia?
Keith McDonnell (CEO, KMIgaming), Allen Yan (Director & Founder, Spade 9) and Saxon Shadford (Director, Avalon Marketing Services ltd) dive into a deep discussion on the development and potential of the Philippines as an undisputed hub for iGaming during SiGMA's digital summit. This panel was moderated by SiGMA's very own founder Eman Pulis.
The struggle of educating European operators about the Asian market and specifically about Manila on the Philippines as a hub for iGaming was real and the panel opened up their discussion on this topic. At the moment Manila is the only hub in Asia that offers a license to iGaming operators. This allows them to set up operations in Manila and other parts of the Philippines and target other parts of Asia. This region is used to these sorts of businesses setting up there so the infrastructure is all in place.
Keith opens up this discussion with a striking statement saying that he "would actually argue that the Philippines is the biggest global hub for iGaming. I don't know anywhere bigger in the world then Manila right now."
Allen Yan was asked by Eman Pulis if he agrees on the topic and he brought up the following statement: "Yes I do. These people basically play from home. Online gaming is very popular in this region."
Saxon says that "certainly talking about the Philippines being the hub wasn't always that way. The industry has been centered in Asia for a long time
and it's started in other countries that had a leading approach or structured place to operate. So Malaysia and Taiwan were really where the industry of bookmakers and traders started in the late 90th. I think what has changed over that 13 to 14 year period is that thousands and thousands of people have moved to the Philippines.
Many locals and a lot of experts have gone there and employed a lot of people. Along with the BPOs that moved to the Philippines in the same time financial services, banking, telecommunications and airlines settled down there. When I first went in 2007, fundamental things like IT, infrastructure, security weren't there to support the high demand of the iGaming space. Things have changed significantly in the last decade at least. It's relative to the other parts of the region. There has been the biggest change in the recent years."
Watch the full discussion here:
When asked about operators and suppliers looking from outside Asia wondering where they should be setting up offices or going for licensing and the political climate between the government and the opposition this is what the panel had to say:
Keith opens up this discussion saying that "compared to Europe it's far more volatile, it always has been. but nothing is easy anywhere. Compliance is getting harder looking towards the UK and the COVID crisis. My experience with Manila has always been a way of business. But there has always been that volatility and that way of doing business. Just because you have a license doesn't mean you going to be issued a free pass to go on with your business with no interruptions."
Two or three years ago PAGCOR took over the torch of iGaming licenses which are called POGOs and Pulis assumes, that there is no better place to outsource workforce like international call centers than the Philippines because of their flawless English. Keith adds that the years build up knowledge helps a lot as well.
A lot of POGO licenses were acquired by companies who had an interest in China. The panel was also asked if it is too risky to be independent on mostly Chinese facing operators.
Allen said that the major difference between getting a license in the Philippines and in Europe is that in most of Asia including China it grey which means that it isn't legal. So the Philippines can be considered as a business model for operators to run their website out of the BPO, out of the Philippines and legally work on a market which is grey. The current government in China is very strong and they try to control everything the pressure is not just over the Philippines but all over Asia.
A stampede of operators left Cambodia because the Cambodian government was obliged to shut down licenses. However the Philippine government stuck with the operators and stated that is a matter of national jurisdiction and the iGaming sector has to stay. But is it risky moving forward, Eman asked?
The Philippines is strategically located, so they have a lot of influence from the US. Since the US is as strong as China the US forcesit to be on online gambling provider. They can't simply give up, the panel responded.
The Philippines has strong ties to both sides and therefore can withhold its ground.
How important is it for POGO licenses to rely on other jurisdiction in the sense to have more international players relocate to Manila and aquire POGO licenses that are not necessarily facing China?
"There are many sectors and ancillary services in and around iGaming. Philippines is a 24/7 center. There is a huge population that revels the opportunity to go to work at 10 pm and experience only modestly horrific traffic. There are a lot of other selling points. The operators may provide around 150.000 jobs. Combined with all services that go along with this, the sector generates a huge amount of jobs making it so important for the government to keep supporting it.
The Philippine government is very motivated to ensure that they collect as much revenues, including the taxes, and employ as many people as possible. Also having them working in industries that elevates their education and experience levels, so that they can continue to be more relevant in the South East Asian stage and in particular globally."
Pulis closes off this discussion by saying that a lot of entrepreneurs are moving away from Europe and stifling growth and job opportunities in Asia are waiting. Keith affirms this stampede. He has seen this happening as long as he has been involved in Asia. However, the success, irrelevant how successful the brands were in their original market, results in taking time, even years, and effort to partner and build relationships with people who know the local issues and circumstances. The key point is to truly understand the region.
Apart from seeing the Philippines as undisputed hub for iGaming Allan figures Taiwan as another very potential region. He says, that it copied the BPO business model from the Philippines. But the advantage of Taiwan is having employees with a much better education. Due to speaking Chinese they are able to serve a larger market. Also politically wise Taiwan is more western than China. As another region with great potential Saxon also closes off by mentioning India.