High rollers from China in the Philippines are in Beijing's sights as the Chinese Embassy asks Manila to end the illegal employment of Chinese nationals in the country's gaming industry.
The Chinese government will carry out more special operations aimed at preventing and combating cross-border gambling, and is targeting the Philippines, the leading offshore center for companies offering proxy betting to Chinese punters, where «hundreds of millions of Chinese yuan» flows to each year.
«China will focus on investigating and cracking some major cases, including those of organizing gambling overseas and opening online gaming, and will destroy networks of criminal organizations involved in recruiting gamblers from China by overseas casinos and using the Internet to open casinos in China,» a spokesperson for the Chinese Embassy in the Philippines said in a statement.
The statement also said that China would investigate «underground banks» and online payment platforms that provide financial settlement for cross-border gambling and other crimes, and would «wipe out domestic network operators and companies that provide technical support for such crimes.»
These gaming companies take bets online and over the phone from clients in China, where gambling is illegal. The statement highlighted an increase in crimes and social problems in China as a result of online gambling.
Booming Industry
Philippines offshore gambling operators – the so-called Pogos – operated in a legal gray area until 2016, when China-friendly President Rodrigo Duterte took power. The sector is now booming, generating revenue and jobs for the domestic economy, and fuelling a real estate boom in Manila.
Since 2016, the Philippine Amusement and Gaming Corporation has licensed dozens of offshore gaming operators, mostly Chinese-owned, the «Financial Times» reported (behind paywall). According to the «FT», some 100,000 Chinese nationals are estimated to work in this sector in the Philippines, owing the state about 2 billion pesos ($39 million) per month in taxes on wages.
Apart from online gambling, the offshore market also includes proxy gambling, where high rollers communicate with casino staff to place bets remotely. Bloomberg reported (behind paywall), citing figures from brokerage CICC, that proxy betting accounts for 40 percent of the Philippines' $1-billion VIP gaming market.
