The Philippine gaming regulatory body PAGCOR recently announced the postponement of the minimum guarantee fee policy until June 1st, citing the "current economic crisis" — a global oil shortage leading to an energy emergency. This is yet another "emergency brake" in PAGCOR's fee policy. Looking back over the past decade, PAGCOR has been oscillating between "increasing fiscal revenue" and "protecting the industry ecosystem," reflecting the difficult exploration of an emerging gaming market from extensive expansion to refined governance. In plain terms, PAGCOR has been walking a tightrope between "wanting to collect money" and "fearing to collect to death" over the years.
First Phase: Extensive Era (2016-2020) — Low Threshold, Land Grabbing
During the heyday of the POGO industry, PAGCOR adopted a relatively lenient fee strategy. For offshore gaming operators, the regulatory fee rate was only about 5% of GGR, plus a fixed fee of $10,000 per month, which was far lower than that of physical casinos. During this period, PAGCOR's core goal was to rapidly expand the tax base and seize market share. The low-threshold strategy was effective — the number of licensed POGOs once exceeded 200, and the industry employed hundreds of thousands. However, the consequences followed: opaque income reporting, license trafficking, and illegal operations were rampant. Andrea Domingo, the then-chairman of PAGCOR, admitted, "We were more focused on getting more players into the system, rather than fine management."
Second Phase: Tightening and Recalibration (2021-2024) — From 35% to 30% Bargaining
With the joint crackdown on cross-border gambling by China and the Philippines, the POGO industry began to shrink. PAGCOR shifted its focus to the domestic online gaming market. In 2021, PAGCOR introduced the PIGO framework, setting a 35% GGR regulatory fee rate for domestic electronic casinos — a high level globally. Operators complained bitterly, believing this rate "almost killed the profit margin."
The turning point came in January 2025. Alejandro Tengco, Chairman and CEO of PAGCOR, announced at ICE Barcelona that the electronic gaming fee rate would be reduced from 35% to 30%. Tengco explained at the time: "Lowering the rate encouraged unregistered online gaming operators to move to the legal market. PAGCOR will create a more favorable regulatory environment." This fee reduction was seen by the industry as a symbolic move by PAGCOR from "simply collecting" to "encouraging compliance." At the same time, PAGCOR also simplified the license application process, reducing the approval time from six months to three months. This was an attempt at "releasing water to nourish the fish."
Third Phase: The Birth and Controversy of MGF (End of 2025 to Present) — The Logical Reversal of Minimum Guarantee Fees
In December 2025, PAGCOR suddenly announced the introduction of a minimum guarantee fee system. According to the new regulation, GSA providing electronic casino games has a monthly MGF of 9 million pesos (calculated based on a GGR of 30 million pesos), and those not providing electronic casinos have 3 million pesos (based on a GGR of 15 million pesos). The second phase from January 2027 will be adjusted to 10.5 million and 4 million pesos.
This policy's logic underwent a fundamental reversal: from charging a percentage of actual revenue to a fixed fee based on a preset revenue threshold. Jessa Mariz Fernandez, head of PAGCOR's offshore gaming department, stated in a January memo that the new rule aims to "address the loopholes in the current fee structure" and is based on the principles of fairness, accountability, and fiscal responsibility. The implication is that the problem of operators underreporting income was so severe that PAGCOR decided to "assume how much you can earn and charge accordingly."
However, industry data shows that only about 25 of the 65 PAGCOR-certified GSAs can meet the 30 million peso threshold per month. This means that more than sixty percent of operators would face a "revenue not enough for the fee" dilemma if the plan were implemented in April as originally planned. MGF is essentially a minimum revenue guarantee mechanism — by setting a fixed cost threshold, PAGCOR shifts some operational risks to businesses while also forcing the industry towards intensification. But in the short term, this will undoubtedly accelerate the exit of smaller players.
The Balancing Logic Behind the Swings
From 35% to 30%, and then to the introduction of MGF, PAGCOR's regulatory trajectory seems contradictory, but there is a clear logic line: at different stages of the industry lifecycle, different intervention measures are taken.
In the nascent stage (POGO era), low fees and loose regulation were for rapid scaling. In the mature stage (PIGO era), high fees and fee recalibration were to eliminate non-standard players and retain compliant main players. In the current stock competition period, the introduction of MGF is a "supply-side reform" — PAGCOR is no longer satisfied with sharing based on proportion, but hopes that each licensed operator can contribute a "guaranteed income." This change is similar to the logic of Nevada charging a fixed annual fee based on the number of gambling tables in the United States, but the Philippines' MGF is more aggressive because it is directly linked to the GGR threshold rather than physical facilities.
Tengco's speech at ICE Barcelona may best summarize PAGCOR's regulatory philosophy: "Regulation is not to avoid discomfort, but to establish a resilient, accountable, and publicly trusted system." The subtext of this statement is: PAGCOR is willing to endure industry pains in the short term in exchange for long-term market purification.
Future Outlook: Will MGF Be Adjusted Again?
PAGCOR has now postponed MGF until June 1st and stated that it will conduct a comprehensive assessment of the industry's current situation during the delay period. From historical experience, PAGCOR is not stubborn — it has reduced from 35% to 30% in 2025 and has adjusted the POGO regulatory fee rate multiple times. If far less than half of the 65 GSAs can truly afford MGF, PAGCOR may further adjust the threshold or introduce a tiered fee scheme.
But one thing is certain: PAGCOR has bid farewell to the "low threshold, low fee" extensive era and is transitioning to a "high threshold, guaranteed fee" refined regulation. For operators, the horn of the compliance elimination race has already sounded. For more on PAGCOR policy evolution and industry insights, continue to follow PASA official website.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original in-depth gambling channel: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
