Philippines PAGCOR Restructures Into Dual Gaming Regulatory Bodies

For nearly five decades, the Philippine Amusement and Gaming Corporation has served as both the regulator and a major operator in the country's gambling industry. That arrangement is now in the process of being unwound, but the structural problems it created will take far longer to resolve than the decoupling process itself.

What is changing and why it took so long

PAGCOR Chairman and CEO Alejandro Tengco has been advancing a plan to decouple the agency's regulatory and commercial functions. The goal is to transform PAGCOR into a pure regulatory body while privatizing its Casino Filipino branches through a competitive bidding process expected to generate at least PHP 50 billion. The plan does not require new legislation per se, but it does require approval from the Governance Commission for Government-Owned and Controlled Corporations (GCG), followed by an executive order or amendment to existing directives from the Office of the President. As of early 2026, the GCG review is ongoing, and the completion timeline has been pushed to late 2026 or early 2027.

The conflict of interest was not theoretical. PAGCOR, created in 1977 under Presidential Decree No. 1067-A, set the licensing terms, enforcement priorities, and tax rates that directly affected its own competitors. Operators seeking licenses dealt with an agency that had financial incentives to limit competition. Enforcement actions against licensed operators were always colored by the question of whether the regulator was acting in the public interest or protecting its own market share.

POGOs are gone, not shrinking

The restructuring arrives after the Philippines has already shut down its entire offshore gaming sector. Philippine Offshore Gaming Operators (POGOs) peaked at approximately 300 licensees in 2019, generating over PHP 7 billion in license fees. But the industry became synonymous with criminal activity, human trafficking, money laundering, and fraud. In July 2024, President Marcos announced a total ban, and on November 5, 2024, he signed Executive Order No. 74, ordering the immediate cessation of all POGO, Internet Gaming Licensee (IGL), and other offshore gaming operations by December 31, 2024. This was later reinforced by Republic Act No. 12312 (the Anti-POGO Act of 2025), which declared all offshore gaming operations illegal. There are zero licensed POGOs operating in the Philippines.

Once PAGCOR becomes a pure regulator, its focus will shift entirely to domestic and integrated resort operators. The agency currently operates more than 41 Casino Filipino branches, all of which are slated for privatization. Revenue from gaming operations will disappear and be replaced only by license fees from private operators, a significant structural change given that roughly 70 percent of PAGCOR's income currently goes to nation-building contributions.

For domestic operators, the change should, in theory, create a more level playing field. A regulator without its own revenue targets should be less inclined to tilt licensing conditions in favor of the state-owned operator. Whether that happens in practice depends entirely on the new structure's independence from political influence, and there is little in the current framework that guarantees such independence.

Skepticism is warranted

Splitting a conflicted agency into two entities is a necessary step, not a sufficient one. The Philippines has a well-documented history of regulatory capture, where agencies nominally independent from political interference end up staffed by appointees who answer to political patrons rather than institutional mandates. The board appointments, funding structure, and enforcement autonomy of the restructured PAGCOR will determine whether this produces genuine regulatory independence or simply moves the same dynamics into a new organizational chart.

The gaming operator entity retains significant revenue and political clout. If the regulator's budget depends on fees collected from the industry it regulates (including the state-owned operator), the conflict of interest is not eliminated, just relocated. International observers, including the Financial Action Task Force, will watch whether the restructured PAGCOR demonstrates willingness to enforce against the state operator with the same vigor it applies to private licensees.

For foreign operators considering the Philippine market, the restructuring is a positive signal but not a guarantee. Wait for the decoupling to be completed and the first enforcement actions to be issued before concluding that anything fundamental has changed.