At this year’s IAG Academy Summit, PAGCOR Chairman and CEO Alejandro H. Tengco set out an ambition that will shape the Philippine gaming market for the next decade: a future in which the agency devotes its “entire focus, expertise, and resources to regulation.” Behind the language of stability and predictability lies a structural shift. PAGCOR is preparing to decouple its commercial operations from its regulatory functions and step fully into the role of an independent regulator. For the operators, investors, and suppliers weighing the Philippines, the more important question is what that regulator intends to do with its authority.
A growth story, and a blind spot
The headline numbers tell one story. PAGCOR reported 2025 gross gaming revenues of ₱396.14 billion, up 6.39% from ₱372.33 billion the year before, with a substantial share now coming from electronic and online gaming (iGaming). But a revenue figure alone flatters the picture. By PAGCOR’s own estimate, roughly half of all online gaming activity in the country still takes place outside the licensed ecosystem. That unregulated half is revenue that escapes taxation, players who sit beyond the reach of responsible gaming safeguards, and a persistent disadvantage for the operators that chose to play by the rules.
Half of the market remains out of sight
The number that should hold attention is not the growth rate but the split. When half the market operates outside the licensed system, licensed operators are not only competing with one another; they are also competing against illegal ones on unfair terms. A licensed operator carries the full burden of tax and compliance, submits to supervision, and answers to responsible-gaming rules; an illegal site carries none of that, and still chases the same players. That is the contest PAGCOR’s reforms are built to win, which is why the agency’s progress cannot be read off gross gaming revenue: a market can grow while quietly losing this fight, because the growth is landing on platforms no regulator can watch.
Prohibition or outright ban does not settle that contest either. An offshore gaming site is not a casino floor that can be padlocked; it resurfaces under a new domain, marketed to Filipino players through local influencers, while the regulator meant to contain it can neither make an arrest nor pull a site down on its own authority. This is the practical case for channelization over a ban. Rather than trying to extinguish activity it cannot reach, PAGCOR is working to make the licensed option the one players actually prefer, and to pull the market toward operators it can hold to account.
Chairman Tengco has been candid about the scale of the task. Speaking before the House Committee on Appropriations on 24 August 2026, he noted that about half of the online gaming operators in the country remain illegal. “When I assumed the chairmanship of PAGCOR, only about 8 to 10 percent was legal,” he told legislators. “With our reforms and the structures we have put in place, we are now at roughly 50-50. Our programs are focused on how to bring the illegal operators into the legal fold.” A move from single digits to parity is real progress. Closing the remaining half is the harder climb.
Making the legal channel the obvious choice
As elucidated by Arden Consult in its latest white paper “Smart Regulation, One Year On,” the lesson of the past year is that channelization is won on the strength of the licensed product, not on the severity of penalties alone. When legal operation is credible, well supervised, and commercially viable, the licensed channel becomes the obvious choice.
Speaking at the inaugural Complete iGaming (CiG) iDEA Summit in September 2026, Arden Consult Founder and CEO Atty. Marie Antonette “Tonet” Quiogue described how PAGCOR set out to make that channel attractive in the first place. “They lowered the taxes to allow channelization to happen,” she said, “so that a lot of the unregulated and illegal online gaming could move through the legal framework.” Her counsel to international entrants begins with a caution. “For a moment, forget everything you know about other countries. This is the Philippines, and it is a bit different,” she said. “The ones that have succeeded here are those that adopt local practice and local thinking, but still with global compliance.”
She urged investors to read PAGCOR’s frequent revisions as a feature rather than a flaw. “People say the rules change every day, but you should see that as a good sign that the regulator listens,” Quiogue said. “They are not afraid to adjust, and that gives investors a fair chance to contribute to an evolving ecosystem.”
She was equally clear about what can undermine channelization. “You cannot make it difficult for the legal market to reach its players,” she said. “If the illegal operators are advertising online and reaching your players and you cannot, then it does not make sense to have a license.” The task, she argued, is to keep the licensed channel both well governed and genuinely competitive, so that compliance and commercial success move in the same direction rather than against each other.
Concrete actions behind the principle
PAGCOR’s recent moves follow from that logic. Atty. Jessa Mariz R. Fernandez, the agency’s Assistant Vice President for Remote Operations and Ancillary Services and concurrent Officer-in-Charge of the Electronic Gaming Licensing Department (EGLD), draws the lesson of the market’s recent adjustment plainly: “A successful gaming market is not defined simply by how fast it grows. It is defined by how well it is governed.” What that has meant in practice is a change in where regulatory responsibility sits. As gaming administrators, B2B providers, technology companies, and payment providers became integral to the ecosystem, she has said, “regulation could no longer focus on the operator at the end of the chain. Responsibility has to follow the entire system.”
“A successful gaming market is not defined simply by how fast it grows. It is defined by how well it is governed” — Atty. Jessa Mariz R. Fernandez, AVP for Remote Operations and Ancillary Services and OIC for EGLD at PAGCOR
On that principle PAGCOR strengthened its framework for B2B providers, including special-class BPOs, introduced transition guidelines for providers working with accredited systems administrators, set guidelines for cash rebates and cashback programs, expanded its offenses-and-penalties framework, and adopted more consistent standards for violations across the regulated ecosystem. It is an approach Fernandez sums up as a single discipline: “simplify where we can, strengthen where we must, and make responsibility unmistakable.”
The rest of the toolkit serves the same design goal. The Unified Gaming License (UGL) replaces a patchwork of product permits with a single license for venues offering multiple products, while the Minimum Guaranteed Fee ties system administrators to real operational commitments and guards against revenue under-declaration. Payments became a front of their own. “A regulated gaming market cannot operate effectively without a payment ecosystem that is itself properly understood, coordinated and regulated,” Fernandez has said, and PAGCOR has since realigned the accreditation of payment gateways and channels with the standards applied to institutions supervised by the Bangko Sentral ng Pilipinas (BSP). On the consumer side, tighter know-your-customer (KYC) and under-21 controls sit alongside the forthcoming PAGCOR App, which will let players confirm they are dealing with a licensed site, and a self-exclusion register that has grown from about 1,500 names a year ago to more than 26,000 verified former players, backed by a 24/7 national problem gambling helpline. These are not scattered rules but the machinery of a regulator equipping itself to supervise a market, not merely to tax it.
Why credible regulation attracts capital
That is also what international suppliers and testing bodies say they are looking for.
“Really great to see the land-based industry and online industry growing together and working together in parallel under a robust regulatory framework.” — Magdalena Podhorska-Okolow, VP for iGaming New Markets and Sales, Light & Wonder
On the same iDEA Summit stage, GLI’s APAC Managing Director Richard Howarth argued that a regulator’s standards are what give a market its integrity. “First and foremost, it’s important to support the ambitions of the regulator,” he said. “Those jurisdictions and regulators that apply accreditation or licensing are the ones building a market with integrity for the future, and we’re seeing a lot of that here in the Philippines,” Howarth noted. Credible regulation, in his view, is not a box to tick on entry but a matter of genuine engagement, and it is the reason the right operators and suppliers commit.
“Those jurisdictions and regulators that apply accreditation or licensing are the ones building a market with integrity for the future, and we’re seeing a lot of that here in the Philippines.” — Richard Howards, APAC Managing Director, Gaming Laboratories International
The pull is visible on the demand side too. Kris Galloway, Head of iGaming Product at Sumsub, credits the regulator’s direction and points to what players themselves want. “PAGCOR is making some great moves, great advancements in terms of player protection and responsible gambling,” he said. “And it’s just a very attractive market as well. The users, I think, they want to play in a licensed environment.” As more of them move into that regulated space, he added, “they’ll be protected, they’ll feel more comfortable, and it will just benefit the economy and ecosystem as a whole.”
“PAGCOR is making some great moves, great advancements in terms of player protection and responsible gambling, and it’s just a very attractive market as well.” — Kris Galloway, Head of iGaming Product, Sumsub
The test ahead
The Philippines is at an inflection point. The commitment to a dedicated regulator, the honest accounting of how much of the market remains unlicensed, and the steady tightening of standards are the right ingredients. Tonet Quiogue’s own measure of success is telling. “The dream is for this to become a real industry,” she said, “one with legitimate players and investors and a full ecosystem around it, game providers, aggregators, payment providers, and real estate, so that it is not something that can simply disappear.” It is a vision in which PAGCOR eventually needs fewer rules, not more, because the market increasingly polices itself. Getting there depends on execution: sustaining the higher bar through the transition to an independent regulator, keeping the licensed product worth choosing, and converting the remaining illegal half without driving legitimate operators out. If PAGCOR holds that line, the country’s claim to be Asia’s benchmark for regulated gaming will rest not on how fast the market grew, but on how well it was governed.
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