The Philippines is in the final countdown of a nationwide campaign to clear out POGO gambling operators.
October 15 is the deadline set by the Philippine Bureau of Immigration for POGO workers to collectively downgrade their visas and leave the country. Although many POGO workers have not yet left, they face increasingly severe crackdowns by the Philippine government.
According to data released by the Presidential Anti-Organized Crime Commission (PAOCC), the number of Philippine Offshore Gaming Operators (POGOs) under its surveillance has sharply decreased. As of the latest statistics, there are now only 100 POGO centers remaining.
POGO operators and workers in the Philippines are scattering like birds and beasts, moving from the Philippines to various parts of the world, especially the Golden Triangle area of Southeast Asia.
Amidst the severe crackdown on POGOs in the Philippines, the government of Laos has recently announced its readiness to allow online gambling operators to set up within its territory and open to foreign tourists. This move aims to attract international gambling industry investment to promote economic development.
The intention of the Laotian government is quite clear, and it seems envious of the economic achievements made by the Duterte administration in the Philippines through the vigorous development of POGOs, with the mindset of "what the Philippines doesn't want, I'll take all," seeing Laos also trying to follow the Philippines' path of gambling development to seek faster economic growth.
Therefore, Laos is likely to become the first country in Southeast Asia to fully emulate the Philippines in opening up the online gambling industry, and PASA also sees the opportunity for Laos to replace the Philippines as the new hub of online gambling in Asia.
This article by PASA will provide some advantages of Laos and some professional advice under the crisis of the Philippine industry.
Why Laos is Trying to Open Online Gambling Operations
Laos is the only landlocked country in Southeast Asia, with a land area of 236,800 square kilometers and a population of over 7 million.
In 2023, Laos' GDP totaled $14.244 billion, ranking last among the ASEAN-10 countries, with an economic volume even smaller than the tiny nation of Brunei ($15.153 billion). Its GDP per capita ranks second to last, only slightly better than Myanmar, mainly due to Laos' smaller population size; otherwise, its GDP per capita would also be at the bottom.
Laos was once listed by the United Nations as one of the poorest and most backward countries in the world, with virtually no heavy industry domestically. Agriculture accounts for about 50% of Laos' GDP, with over 80% of the population engaged in agriculture.
If one adjective could summarize Laos, it would be "poor."
Why is Laos so poor?
The history of the Laotian state is not very long. In 1357, the first unification of Laos occurred under the Mengsangtong Kingdom, establishing the Lan Xang Kingdom. Before this, many tribes were scattered throughout Laos without a unified governing body.
The Lan Xang Kingdom began to decline in the 18th century, gradually splitting into the kingdoms of Luang Prabang, Vientiane, and Champasak.
At the same time, the neighboring country of Siam, now Thailand, was becoming increasingly powerful. In 1779, Siam occupied the three kingdoms of Laos, making Laos a territory of Siam.
Under Siam's rule for 114 years, the Laotians decided to rely on the French to drive out the Siamese, staging a clever plan of "using the wolf to drive away the tiger."
At this time, French colonizers had already occupied southern Vietnam and Cambodia. As Siam's backer, Britain did not want to go to war with France at this time, so through Anglo-French colonial negotiations, the rulers of Laos became the French.
French colonizers occupied Laos in 1893, ruling until they withdrew from the Indochina countries in 1954, marking the darkest period in Laotian history.
The 1954 Geneva Accords signed in Switzerland ended French colonial rule over Laos.
However, after the departure of the French colonizers, the United States refused to accept the Geneva Accords, wanting to turn Laos into a frontline base for attacking socialist countries.
From 1955 to 1975, Laos experienced 20 years of resistance against the US, with the war being between the US-supported puppet government and the liberation areas led by the Lao People's Revolutionary Party.
In August 1975, Laos achieved victory in the struggle for national salvation against the US, and only in December of that year was the Lao People's Democratic Republic officially established.
Fragmented rule and years of warfare not only hindered Laos' economic development but also caused it to miss the significant opportunity for industrial development after World War II.
Additionally, Laos is the only landlocked country in Southeast Asia.
Laos' road transportation is also relatively backward, with the history of having no railways ending only in 2021 with the opening of the China-Laos railway.
The lack of a seaport severely hampers Laos' external communication and interaction, restricting the development of foreign trade.
Historical legacies combined with geographical location make Laos the poorest country in ASEAN.
If I were a ruler of Laos, I would also be eager to improve the national economy and increase national income.
Undoubtedly, the Asian economic miracle of the Philippines has also made the Laotian government envious.
In 2016, under the leadership of then-President Rodrigo Duterte, the Philippines opened its doors to offshore gaming operators (POGOs).
The Philippine government regulated and taxed the burgeoning online gaming industry, which had already begun to loosen its operational environment.
The subsequent impact on the economy speaks for itself.
After the Philippines implemented a lenient policy on online gaming operations, its economy began to soar, with a GDP of $437.1 billion in 2023, a 60% increase from $261.2 billion in 2012.
Following Duterte's full liberalization of POGO operations in 2016, the Philippines' national tax revenue increased significantly compared to previous years.
This rapid growth is considered an economic miracle.
It is believed that not only Laos would be surprised, but many countries probably did not expect the online gaming industry to stimulate such significant economic vitality.
At a press conference in August this year, Laotian government officials and representatives of several online gaming operators gathered to discuss the upcoming policies and regulatory measures.
The head of the Lao Ministry of Information, Culture, and Tourism stated at the meeting: "We look forward to injecting new vitality into Laos' economic development by opening up the online gaming market."
The Laotian government stated that opening up the online gaming market will not only bring considerable tax revenue to the country but also create a large number of job opportunities and enhance Laos' competitiveness in the international tourism market.
To ensure the healthy development of the market, the government will establish strict legal regulations and regulatory measures to ensure that all operators comply with the law, ensuring the fairness and transparency of gaming activities.
The announcement of this policy has also attracted widespread attention from the international gaming industry. Many online gaming operators have shown strong interest in the Laotian market, considering it a potential emerging market with great potential.
The Laotian government is currently taking the first step toward licensing online gaming operators by establishing the Lao Offshore Gaming Authority (LOGA) (previously, the gaming industry was managed by the Ministry of Information, Culture, and Tourism).
The government regulatory body, the Lao Casino Control Commission, held a ceremony to issue a license to the Lao Offshore Gaming Authority (LOGA), a private company that will act as the main agent for the industry.
The licensees will adopt a business model similar to that of Philippine Offshore Gaming Operators (POGOs), allowing these operators to provide services abroad from Laos but not domestically.
Compared to the Philippines, the Advantages of Working in Laos
Besides policy, why does PASA say that Laos is likely to replace the Philippines as the hub for POGO operations?
We know that the biggest goal for POGO operators is to make money, and profit equals revenue minus costs. When our revenue remains unchanged, the lower the costs, the higher the profits.
And Laos is such a place with extremely low operating costs.
The cost of living in Laos is relatively low, but specific expenses can vary depending on the city and lifestyle.
PASA here first compares the overall situation in Laos and the Philippines, then provides a more detailed analysis. (For ease of comparison and understanding, all units are converted to US dollars)
First, compare the cost of dining. According to cost data from NUMBEO, the cost of a single meal in Laos is about $1.82, while in the Philippines it is about $3.55.
The cost of dining in Laos is almost half that of the Philippines, which is undoubtedly good news for many practitioners looking to save on costs.
In terms of transportation costs, Laos also has a significant advantage. The price of a one-way ticket is also half that of the Philippines, and the price of a monthly pass is even only one-sixth of that in the Philippines.
The costs of utilities and communication networks are not very different, but overall, they are still about 20% lower in Laos than in the Philippines.
In summary, the cost of living in Laos is undoubtedly lower than in the Philippines, which is unquestionable, and practitioners can save much more on daily expenses in Laos than in the Philippines.
But next is the most important aspect: housing and rental costs, which I believe many operators care more about.
In Laos, due to uneven development, the differences in housing and rental costs are very large. The rental costs in the main cities of Laos are much higher than in some cities outside the city.
For example, the average rent for a single room in the capital city of Vientiane (Yongzhen) is $866, and in the suburbs, it is $782.
In comparison, the average rent for a single room in the capital city of Manila in the Philippines is $484, and in the suburbs, it is $237.
But most importantly, these are all single rooms.
For our office situation, a large house is naturally the first choice: in the city center of Vientiane, the rent for a large house with three bedrooms or more is not much different from a single room, averaging $928.
But in the Philippines, the rent for a large house with three bedrooms or more in the city center of Manila is as high as $1700, almost double.
Overall, for practitioners, the cost of living in Laos is undoubtedly lower than in the Philippines, and they can save up to nearly 50% on expenses.
This is also why PASA believes that Laos can attract a large number of POGO operators to enter the market.
Following the Philippine model and fully opening up POGO operations, Laos is expected to contribute about 2% to GDP from the gaming industry and gain at least $300-500 million in tax revenue.
The introduction of POGOs will also attract a large amount of foreign investment into Laos, especially in real estate, services, and infrastructure construction.
After the implementation of licenses, Laos may also experience a situation similar to the Philippines, not only providing a large number of job opportunities for local and foreign employees but also promoting the improvement of other industries and infrastructure.
The real estate market in Laos will also experience rapid growth during the booming period of POGOs, especially in major cities like the capital Vientiane.
This is the perfect outcome that the Laotian government is looking forward to.
Conclusion
Danny Too, the general manager of Cherry Interactive, a digital consulting company very familiar with the Laotian gaming industry, stated that the Laotian government is currently finalizing the tax structure and details of work permits for online operator employees.
The number of available licenses will be limited, but the specific number is not yet clear.
Danny Too stated that compared to the Philippines, the Laotian jurisdiction has several advantages, such as low labor costs and the ability to quickly obtain work permits.
"In short, they will build an entertainment city in the LOGA area, so they will become a cheaper version of POGO, offering better entertainment," said Danny Too.
The Laotian government initially plans to mainly attract operators focused on the Southeast Asian region and Thailand.
Although not yet finalized, the tax structure is expected to be more favorable than in the Philippines, as the crackdown on POGOs in the Philippines has triggered an industry exodus.
Andrea Domingo, the chairperson of the Philippine Amusement and Gaming Corporation (PAGCOR), also stated that offshore gaming companies leaving the country are setting up shop in Cambodia, Vietnam, and Laos.
As the Philippine government gradually implements strict regulation and bans on the offshore gaming industry, the gaming landscape in Southeast Asia is quietly changing.
The once thriving Philippine Offshore Gaming Operators (POGOs) now face unprecedented challenges.
PASA believes that Laos, a country located in the hinterland of Southeast Asia, will become a potential destination for the relocation of the gaming industry, leveraging its unique geographical advantages and increasingly open policies.
We look forward to exploring more unique insights about the Laotian POGO operating environment with our readers and invite you to follow the global iGaming leaders' outbound information platform PASA for more firsthand industry information.
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