Why Banning Online Gambling Backfires: "Philippines Risks Bigger Black Market, Irresponsible Gaming," Experts Warn

A leading legal expert warns that recent pushes for legislation prohibiting online gaming will worsen the effects of irresponsible gaming by sending gambling operators underground.

Head of trusted technology consulting firm Arden Consult, Atty. Tonet Quiogue, released a 15- page memorandum arguing a simple but powerful sentiment: if the government totally bans online gaming, it forfeits its own ability to control illegal gaming and its excesses.

“The real enemy, as any seasoned observer knows, is illegal gambling – operations that bypass all regulations, pay no taxes, and offer no player protections,” argues Quiogue in her memorandum. “If the goal of lawmakers is to eliminate the social ills of gambling, then the logical approach is to surgically strike at these illicit operations, not to outlaw the entire industry and penalize legitimate stakeholders.”

Quiogue’s warning comes at the heels of various bills filed by legislators, including the most recent Senate Bill filed by former Senate President Migz Zubiri. Quiogue’s piece, however, takes direct aim at bills filed by Senators Pia and Alan Cayetano, Joel Villanueva, and Sherwin Gatchalian.

With respect to the aforementioned bills filed, Quiogue says that the bill’s preambulars and “whereas clauses” paint gambling as an inherently illicit activity, linked directly to fraud, money laundering, and human trafficking. However, as Quiogue points out, there is no evidence to support this treatment of gaming.

This flawed understanding of gambling, Quiogue says, fails to take into consideration the robust legal requirements already set by the Philippine Amusement and Gaming Corporations (PAGCOR) before gaming operators can even receive gaming licenses.

“Every licensed online platform’s software and hardware must be independently certified for fairness and security before launch,” said Quiogue, citing PAGCOR’s extensive audits and compliance checks. “Suspicious activities (large irregular bets, anomalous payouts, etc.) can be quickly flagged and investigated, making it very difficult for criminals to exploit licensed platforms for money laundering or fraud.”

Given this, Quiogue stresses that the idea regulated gaming has any ties to illegal activity is not only misguided, but dangerous, considering that actual illicit activity related to gambling tends to happen when gambling is unregulated and unchecked.

“By contrast, unregulated gambling sites truly fit the whereas clause’s dire description – they do provide a haven for illicit activities because they operate in the shadows, outside of Philippine law,” says Quiogue. “It is telling that proponents of a ban cite criminal cases “linked to online gambling operations” without distinguishing whether those were legal or illegal operations. The lack of reported criminal breaches in PAGCOR-supervised online gaming suggests that the current licensed regime has been largely effective in mitigating the very risks cited.“

In addition to this, Quiogue further supports her argument by citing comparative approaches in different legal jurisdictions. Countries such as China, Vietnam, and Indonesia, for instance, were cited by Quiogue as having huge underground gambling problems despite the countries’ absolute prohibitions on gambling.

Conversely, Quiogue points out, countries such as the United Kingdom, Sweden, and Italy have gone the other way by legalizing gaming, and finding starkly different results. Quiogue cites the situation of Sweden, for instance, where Sweden’s bettors migrated immediately into domestically regulated sites as opposed to offshore bookies, with upwards of 85% of Sweden’s gamers participating through legal means.

As the Philippine legislature weighs these competing approaches, the evidence, according to Quiogue, suggests a clear path forward, one which experts like Quiogue believe the public should fully participate in. As Quiogue points out, it is evidence-based policymaking that works for the benefit of the Filipino, instead of haphazard patchwork driven by fearmongering. To really protect Filipino gamers from the ills of gambling, the public must come together and collectively reject these empty solutions which destroy working systems, and create new crime.