PAGCOR is expanding its oversight of the Philippine web gambling ecosystem. The authority is adapting requirements to address major market shifts.
Factors influencing the industry include:
- the proliferation of artificial intelligence;
- the growth of the unlicensed segment;
- changes in payment infrastructure;
- declining gross gaming revenue.
Jessa Mariz Fernandez, PAGCOR’s Asst VP, stated that regulation can no longer be limited to operators engaging directly with consumers. She emphasised that accountability must extend to the entire gambling ecosystem.
Expanding Supervision for Market Participants
The authority has tightened requirements for B2B suppliers and SCBPOs. These changes include:
- introducing transitional rules for providers engaging with officially approved Gaming System Administrators;
- consolidating existing norms and applying uniform standards across authorised business categories;
- establishing controls for cashback and similar programs (rebates, refunds);
- expanding the list of violations (Offences and Penalties Framework).
According to Ms Fernandez, such innovations make it possible to assess how well the current oversight system aligns with the conditions of a more mature market. She emphasised that the gambling industry’s sustainability depends not only on growth rates but also on regulatory quality.
Continuous Decline in the Philippines' GGR
The legal framework is being reviewed against the backdrop of a downturn in the local gaming sector’s performance. In Q1 2026, gross revenue reached PHP 87.60 billion (nearly USD 1.40 billion), 15.87% less than in the same period the previous year. In the 2nd quarter, the figure fell 20.33% YoY to PHP 88.13 billion (around USD 1.41 billion).
Given this continuous decline, the regulatory body views the current climate as an opportunity to re-evaluate existing control mechanisms. The authority strives to determine which ones need adjustment as the industry continues to evolve.
Strategies to Combat the Shadow Sector
Illicit gambling remains a distinct challenge. Licensed operators bear compliance costs, while offshore brands do not. Yet both categories compete for the same audience.
To combat illegal activity, the regulator collaborates with various organisations, including:
- financial institutions;
- technology companies;
- law-enforcement agencies;
- casino payment systems, etc.
This cooperation aims to curb the illicit economy and enhance public protection. Blocking uncertified platforms opens the door for honest, compliant competitors.
Payment Infrastructure within the Oversight System
The Philippine regulator is placing additional emphasis on transactions. It has revised its accreditation procedures for financial gateways and channels. New assessment criteria will help align market solutions with the standards set by the Central Bank of the Philippines.
Such changes will harmonise requirements for the gaming industry and payment infrastructure. In the long term, this decision can facilitate a unified, transparent, and secure nationwide gambling system.
Risks Associated with Widespread AI Adoption
Rapidly developing artificial intelligence is another factor to consider when shaping the regulatory framework. In Ms Fernandez’s opinion, the algorithms have strong potential.
Innovative solutions can help with the following:
- enhancing compliance monitoring;
- increasing oversight speed and transparency;
- improving the detection of fraudulent transactions, etc.
At the same time, these technologies can also be used to devise more sophisticated scams. The Asst VP confidently opposes relying on yesterday’s rules when dealing with emerging advancements. Consequently, PAGCOR must adapt its mechanisms to innovations that evolve faster than traditional regulatory approaches.
Strengthening Player Oversight in the Country
As part of the reform, the authority is also expanding its consumer protection tools. Key changes focus on 3 areas:
- strengthening KYC verification;
- streamlining the new customer registration process;
- developing a national database of individuals banned from gambling.
In May, the supervisory body partnered with the SFO to launch a country-wide hotline for inquiries related to ludomania issues. The introduced NPGH operates around the clock.
International Strategies: New Zealand’s Experience
Ms Fernandez highlighted the island country’s plans to establish a regulated online casino segment. Its authorities expect to issue up to 15 niche permits by the end of 2026.
Other jurisdictions are also interested in this project as a potential model for addressing several objectives simultaneously:
- strengthening user protection;
- establishing technological controls;
- ensuring transparent iGaming oversight.
Drawing on the example from the gambling market in New Zealand, PAGCOR continues to review its regulatory approach. Part of this assessment is encouraging all industry participants to adopt a more accountable approach to the business.
The authority addresses the following industry participants:
- operators;
- tech providers;
- payment services, etc.
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