Investigating POGOs and local officials

Interior and Local Government Secretary Benhur Abalos announced on Wednesday the creation of a task force to investigate the possible involvement of local officials and the police in the operation of an alleged Philippine Offshore Gaming Operator (POGO) in Lapu-Lapu City.

Abalos assured the task force would be fair to police and local officials, including Lapu-Lapu City Mayor Junard “Ahong” Chan. “Regarding Mayor Chan sa Mactan, I’ve already authorized the legal team to create a task force to investigate this issue,” he said. “I think even the police dyan, ipapa-investigate din,” Abalos told The FREEMAN’s Caecent No-ot Magsumbol.

Some people may question this seeming obsession of the Marcos administration with going after POGOs. They may argue that POGOs are harmless to their host countries or communities, primarily serving Chinese citizens in mainland China. That is why they are called 'offshore gaming operators,' meaning they operate not from the land where they are considered illegal, but for a market situated in that land. In other words, their services and products are not intended for the local market. So, why worry?

There is actually much to be worried about if we study the context and the experiences of those countries that have hosted POGOs, including Cambodia. This whole saga, if I may call it that, serves as a lesson to national and local governments who might only view gambling operations like these from a revenue and employment generation perspective, while turning a blind eye to the complications they bring.

Studies have shown that the situation in countries and communities hosting POGOs or offshore online gambling operations is complex. Professor Alvin Camba, a political economist and China-Southeast Asia researcher at the Josef Korbel School of International Studies at the University of Denver, has explored these complexities.

In his article that appeared in the ‘Made in China Journal’ entitled 'Chinese Online Gambling Capital in the Philippines' (2020), Camba discusses how significant investments from China into online gambling during the Duterte administration have not only spurred economic activity but have also led to certain social and economic exclusions.

Online gambling firms operate in a peculiar niche that the Chinese government itself criminalizes, yet they thrive due to regulatory frameworks set up by the Philippine government that cater to these operations, Camba says. This scenario has led to a commodification of land, labor, and money—referred to as 'fictitious commodities' by Karl Polanyi—which contributes to social dislocation and economic exclusion for the local populace.

Using the theoretical frameworks of Karl Polanyi and Max Weber, Camba illustrates how the rapid and somewhat isolated capital infusion from Chinese online gambling affects both the economy and societal norms within the Philippines. That is why, aside from economic changes, Camba argues that the presence of POGOs also affects the social fabric.

Camba states that online gambling firms have bought entire buildings and floors in the outlying districts of Metro Manila, 'outbidding other industries and impacting local housing markets.' The influx of POGOs has also affected the country’s otherwise flourishing Business Process Outsourcing (BPO) industry. 'The number of new BPOs and the sector’s contribution to job creation have started to decrease because these multinational companies are getting outbid by online gambling firms,' Camba notes, citing Venzon & Turton (2019). Notably, while BPOs took 65 percent of the office space in Manila in 2016, the following year the share had shrunk to 39 percent.

The presence of POGOs or online gambling firms has also stoked cultural and racial tensions, fanning already simmering anti-Chinese sentiments among Filipinos. These sentiments, according to Camba, are fueled by the visible presence of Chinese workers and the establishment of restaurants and other establishments exclusive to Chinese patrons.

It may also seem quite clear that the cast of characters within POGOs, especially now that they are forced to operate in secret, inevitably shows the interplay between local officials, POGO hub operators, and the police. In the case of Lapu-Lapu City, we now have reports of a 'boss' of the POGO hub operation and the president of the hotel which allegedly transformed into a POGO hub who is reportedly carrying a falsified ID naming him as a consultant on Chinese business for Mayor Ahong Chan.

Whether this is true or not, the scenario suggests attempts to forge close ties or exert influence over local officials. This must be thoroughly investigated.