Frankly, it appears that online casinos’ worst moments in Manila are not yet over. While the online casino industry within the region is recovering, those in Manila are hit by more challenges.
According to Bloomberg.com, apart from the pandemic’s effect, it seems that the Philippine’s government’s relief plan placed more taxes on their operations.
More so, other sectors that benefit from the operations of the online casino industry are also feeling the impact. Michael McCullough, the MD of KMC in Manila on Tuesday, said that the Manila residential tower is empty. Similarly, employees of online casinos real money are mainly the occupants of these residents.
Overview of the Philippines Online Gambling Industry
According to statistics, the Philippines’ online gaming industry is worth more than $8 billion. The industry was blossoming annually until the outbreak of the pandemic. This has crippled the once burgeoning sector.
After the lockdown, the Philippines casino agency PAGCOR saw a slash of 50 percent from their revenue. Although online casinos were still working during the lockdown, their operation was very low key.
According to McCullough, some online casinos are giving up their licenses or operating at a small capacity. The sector has recently recorded low patronage, and the government’s new tax regime has worsened the whole situation.
The Philippines Government New Online Casino Tax Policy
The anticipation of most online casino websites and companies in the Philippines was that the relief law would reduce their losses. In fact, the pandemic relief law, as it is called, has imposed more taxes on the already struggling sector.
President Rodrigo Duterte signed the said policy into law early this month. Besides other taxes, online casinos have to pay a five percent franchise tax on offshore gaming operators’ gross bet.
With this new tax policy for online casinos, it is obvious that most of them will pack up. According to Jose Tria, online casinos are already reeling from huge losses due to several months of shutdown. Currently, about forty percent of the online casino operators in the Philippines have stopped operations. Tria is the Assistant Vice president of the Philippines Gaming Corp. Also, it is expected that offshore online casino operators will leave the Philippines, thereby creating a severe vacuum in the property industry.
Online Casinos and the Property Industry in Manila
The departure of most online casinos in Manila has caused an immense drop in the number of inhabitants in the office and residential spaces. The online casino sector employs mainly mainland Chinese workers. Most of them are hired for customer support and marketing jobs. In the last three years, this boosted the cost of properties and rent across Manila.
With most of the online casinos closing up their businesses in Manila, the property industry income has declined too. KMC, in a report published recently, stated that office space vacancy in Metro Manila increased to 7.3 percent towards the end of 2019. Similarly, on Wednesday, the Philippine property stock index fell by 2 percent. Some of the companies that suffered losses include:
SM Prime Holdings Inc. – suffered a 3 percent loss
Ayala Land Inc. suffered a 1.6 percent loss
Besides, KMC predicts that the rents in capital residential condominiums will suffer more losses before the end of next year. According to Fredrick Rara, KMC senior research manager, the growth of Manila’s property industry will depend on whether the online casino industry will bounce back from their losses.
Bouncing Back of the Online Casino Sector in Manila
Just like most sectors, everyone is hopeful that these challenges will come to an end very soon. Experts predict that by the first quarter of 2021, the online casino in Manila’s sector may have stabilized.
According to Rara, it will be difficult to estimate when all these challenges will phase out. However, just like other stakeholders, Rara is hopeful that the whole downturn in the industry will bottom out by the first quarter of next year in the worst scenario.
Going forward, if the government can repeal the new tax relief laws on online casinos, it will attract more infectors. Those who have left the country may reconsider coming back by next year.
The Future of the Online Casino Industry in Manila
The online casino in Manila is peculiar because the losses recorded are affecting other sectors. The worst-hit is the property sector in Manila.
Furthermore, it appears that most offshore online industries in Manila now work from home. This will further pose more challenges for the property industry in Manila.
Finally, the only remedy is for the Philippines government to give out incentives to lure operators of offshore economies into the country.