I. Background Overview: Freeport in the Institutional Gap
Clark Freeport Zone, originally a U.S. military base located in Pampanga Province, was transformed into a special economic zone in the Philippines, managed by the Clark Development Corporation (CDC) under the Philippine Bases Conversion and Development Authority (BCDA) system. The zone enjoys independent investment attraction rights, tax incentives, and certain administrative autonomy, attracting a large amount of gaming and tourism investment. Especially after the rise of online gaming (POGO), Clark quickly emerged as an important hub due to policy gray areas. Its development history is closely related to the division of responsibilities with regulatory agencies such as PAGCOR and CEZA, becoming a crucial node in the Philippine offshore gaming ecosystem.
II. Development Stages: Policy Vacuum and Regulatory Evolution
Initial Phase (Pre-2005): Gaming was primarily based on ground facilities, with licenses individually issued by the CDC, lacking unified regulation.
Introduction of Online Gaming (2005–2012): Several foreign companies entered to conduct online gaming, some authorized by PAGCOR, others only with CDC permits, sparking the "unlicensed online" controversy.
Gray Expansion Period (2013–2016): Drawing on CEZA's "authorized agent" model, Clark also saw a large number of subcontracting and outsourcing, creating a regulatory vacuum and attracting Chinese gaming capital to set up "shell companies" and managed server rooms.
Unified Regulatory Rectification Period (2016–2020): The Duterte administration established the POGO system, unifying online gaming regulation, requiring original license holders in Clark to re-register. Some operators complied, while others went underground. At the same time, Chinese diplomacy first exerted pressure to combat cross-border gaming.
Pandemic Impact and Foreign Capital Withdrawal (2020–2022): The pandemic severely impacted the online gaming ecosystem, with many POGOs withdrawing. Clark transformed into a "cyber fraud customer service park," frequently seeing arrests of Chinese workers.
License Reform and Renewed Controversies (2023 to present): PAGCOR initiated operational and regulatory separation reforms, with some casinos in Clark attempting to resume business under the guise of "offshore casinos," sparking policy and legislative controversies.
III. Major Events and Case Impacts
Michael Yang Case (2019–2022) Duterte's government advisor from China, Michael Yang, was exposed for his connections with registered gaming platforms in Clark and underground financial networks, involving gaming money laundering and shadow payment systems. This triggered Senate inquiries into whether the national leadership served as a protective umbrella for Chinese gaming capital, shaking the legality of Clark's independent investment attraction. This pushed for the declaration of gaming funds and regulatory policy changes.
Duan Renwu Case (2023) Chinese businessman Duan Renwu controlled gaming to cyber fraud networks in multiple parks in Clark, involving illegal detention and international fraud. His use of offshore IT licenses issued by the CDC was actually a cover for a telecom fraud factory. The industry's shift from gaming to cyber fraud damaged international investment confidence, leading to the withdrawal of Korean investment projects and prompting the Philippines to cooperate with multiple countries to establish an anti-fraud intelligence sharing mechanism. Duan was red-noticed by Interpol.
Alice Guo Case (2024–2025) The mayoral candidate in Palawan, Alice Guo, who claimed to be a local Filipino, was exposed as born in China and a forger of identity. Her company's network highly overlapped with Duan Renwu's cyber fraud organization. The case triggered a political legitimacy crisis, stimulating the proposal of the "Unified Gaming Regulation Bill," pushing for the revocation of economic zone licensing rights, and initiating a mechanism for tracing the background of foreign candidates.
IV. Key Nodes: Clark's Controversial Focus and Institutional Turning Points (2023–2025)
Since 2023, the development of Clark's gaming industry has entered a period of high pressure from public opinion and regulation, with several key events serving as turning points.
In October 2023, the Philippine Senate's "Anti-Human Trafficking Committee" conducted a surprise inspection of five gaming and office parks in Clark, uncovering multiple cases of illegal detention involving Chinese and Vietnamese employees. Most of these individuals were forced into telecom fraud and overseas customer service work, triggering nationwide alertness and criticism of Clark's "gaming-cyber fraud integration" trend.
In early 2024, the Sun Valley Casino in Clark announced its reopening. Although it appeared to be a legal gaming project, its complex funding background, suspected of being linked to illegal gaming and potential money laundering, sparked widespread social skepticism. Industry insiders worried about Clark's reputation as a gaming investment destination being severely damaged.
In May 2024, the Alice Guo (Guo Meimei) incident further ignited controversy. As a mayoral candidate in Palawan, she claimed to be a local indigenous person but was exposed as born in China, forging her identity to obtain Filipino citizenship. Senate investigations found that she had capital and personnel connections with multiple gaming and fraud enterprises in Clark, suspected of being a "proxy" for transnational criminal organizations in the political arena. The incident became a focus of Congress and the media, marking a concentrated outbreak of the long-standing blurred lines between local politics and the gaming economy in the Philippines.
In May 2025, the Philippine National Gaming Corporation PAGCOR released a new draft, formally proposing to prohibit all economic zones, including Clark, from "independently issuing gaming licenses," and to strengthen the central unified regulatory framework. If passed, this policy would institutionally weaken Clark's privileged position in the gaming industry, marking a critical step in the deep restructuring of the Philippine gaming governance structure.
This series of events is not just isolated scandals or governance actions, but constitutes a complete trajectory of Clark's transformation from a "gaming special zone" to a "high-risk controversy zone," indicating the direction and intensity of future institutional reforms.
V. Trend Analysis: Towards "De-Gamification" or System Integration?
The development of Clark's gaming licensing system has always been in structural tension between central and local, legal and gray areas. From the initial economic zone's investment attraction advantages to being perceived as a "money laundering channel" and "cyber fraud hotbed," the area represents a concentrated manifestation of fragmented regulation and governance gaps in the Philippine gaming system.
Possible future trends include:
Licensing Rights Revocation: Clark is expected to be redefined as an IT/BPO industry park, gradually clearing its gaming attributes.
Upgraded Cross-National Cyber Fraud Crackdown: The Philippines may cooperate with China, Vietnam, Malaysia, and other countries to launch joint actions against cyber fraud and gaming-linked organizations.
Gaming Capital Transfer: Regions with greater legality and clear regulatory clarity, such as Manila Entertainment City and Cebu, may become new centers of gaming development.
The history of Clark's rise and fall in gaming is becoming a mirror for national governance and gaming reform in the Philippines.
