A Babbler expects the number of POGOS to be slashed by a third by the end of 2020 due to a massive 80 percent drop in gross gaming revenues.
The Babbler said at least ten POGOs and 50 service providers have closed shop as of this month and this would double to 20 POGOs and 100 service providers in the fourth quarter this year. This means that only 40 of the 60 POGO franchise holders would be in play by 2021.
“The DOF went all in against POGOs, it might end up getting crumbs from what used to be cash cows for the economy,” said the Babbler.
Faced with declining profits (due to China President Xi Jinping’s intensified crackdown on offshore gambling since February 2020) and a hostile government, the Babbler said some POGOs have opted to just pack their bags and switch to more friendly host countries.
The DOF has been strict in giving a tax clearance to POGOs to resume operations since the mid-March lockdown forced them to close their operations.
POGOs paid P6.42 billion in taxes in 2019 and the DOF hoped it would raise its POGO tax haul to P17.5 billion annually with the adoption of a five percent gross franchise tax on gross bets under the Bayanihan 2 law.
But with POGOs evacuating the Philippines, the DOF will have to search not only for alternative sources to bankroll the government’s COVID response programs but also mitigate the impact of job losses, slump in real estate and drop in demand for food, transportation and other services.