Mystery Abounds as 138.com Shuts operations; M88 leaves Malaysian, Cambodian Market

Mystery abounds as online gambling operator 138.com shuts down for unknown reasons. Another operator, Mansion88, also exited Malaysia and Cambodia. 

 

At the beginning of this month, several Asian affiliates started reported that 138Bet/138.com would shut down operations. The operator, in a statement, assured customers that they would be allowed to withdraw funds from their user accounts, and also informed suppliers that they would cease their cooperation. 

 

Reasons for 138.com’s rushed exit are not clear. Some gambling affiliates stated that the website would be closed temporarily because their supports based in the Philippines were offline due to lockdown in the country. However, this seems highly unlikely, considering that 138.com has gone offline completely. 

 

Supplementary sources think otherwise, claiming that the reason the site went offline is that its parent company, Suncity Group, is under immense pressure from key stakeholders, who want the company to disassociate with online operators completely. In other news, M88 is scheduled to withdraw its services from Malaysia and Cambodia from the 31st of May. Its customers were notified that the company would discontinue all its promotions starting on the 25th of May. However, they will be allowed to continue gambling with whatever balance is in their accounts. Those wanting to withdraw should do so by the 31st of May. 

 

The company claimed that Malaysia and Cambodia are small markets, compared to Vietnam, China, and Thailand. However, quick research has shown that the company has been recruiting gamblers, propagating the notion that it is the most popular operator in both countries.

Philippines Shuts Door on New Online Casinos

In an attempt to avoid a proliferation of the industry as witnessed in Cambodia, The Philippines is keeping its door shut for new online casinos.

Andrea Domingo, Philippine Amusement and Gaming Corporation chairperson, said on Tuesday that her agency will be placing a halt on the acceptance of any new license applications in the foreseeable future to stay focused on the sustainable growth of the gaming industry in the Philippines.

The comments were made by Ms Domingo during her opening speech at the G2E Asia conference in the Philippines, which started today.

Domingo said, “We don’t want to overburden the industry by blatantly giving out licenses.”

She added, “The President declared a ban on IRs and casinos in January 2018 and we have observed that. He lifted the ban in Clark last year and we have observed that too, but even the Clark region is saturated.”

She reiterated, “Even in Clark we have stopped acceptance of any applications for new casinos.”

As per Domingo, acceptance of any new POGO licenses, which had been going on for some time, will also be halted. Domingo said the idea is to allow the gaming industry to mature so that all the regulations can be put in place.

She also noted that she was confident that around 95 to 97 per cent of the issues related to POGO and its dark side, including kidnapping, prostitution and finance, will be addressed by the ned of 2020.

The Philippines’s regulator also issued a warning to gaming operators who represent themselves as BPOs. She said, “We have the formula to catch that.”

Domino said that licences for e-bingo and e-games have also been halted in areas where they are deemed to be saturated.

“We want people to know that if it’s overcrowded, there’s no reason to put your money in, just go and invest somewhere else. These are the things we have been discussing with the board, and these are the things that we will be implementing by 2030.”

“But for all those that are here now, rest assured, that PAGCOR will do everything to support you and your profitability within the framework of the law.”

The Southeast Asian country does not want to benefit from Cambodia’s ban on online casinos and is monitoring if gaming service providers here are hiring workers from Cambodia, Domingo said.

Online casinos banned in Cambodia may relocate to the Philippines and boost office demand, property consultant Santos Knight Frank senior director Morgan McGilvray said in October.

The Philippine Amusement and Gaming Corp. is regulating the issuance of new licenses for both land-based and online casinos. “We want to rationalize so that everybody with a license has a good chance of being successful,” Chairman Andrea Domingo said.

How much does Philippines’ Online Gambling Contribute Towards PAGCOR’s Revenues?

The Philippine Amusement and Gaming Corporation (PAGCOR) is a government-owned agency established in Metro Manila, Philippines, for the operation of floating casinos and slot clubs in major cities across the country. The agency also supervises and regulates private casinos, bingo parlors, and e-gaming cafes in the region. PAGCOR, as a corporation, is registered under the Office of the President of the Philippines.

Ever since it was established, PAGCOR has been establishing gaming pools and conducting casino games across the country. PAGCOR is expecting an amount of P6 billion as tax revenue from online gaming parlors. Moreover, the corporation is considering a move to limit the number of operators to 50 owing to a probable oversupply of players in the market. This also shows that online gaming has immense potential, with gamblers operating right from their home.

The casino operators and gaming regulators in the Philippines reported a one-quarter increase in profits in the beginning of 2017. But figures released by PAGCR reveal its revenue from online gambling increasing by 8.4 percent every year to P28.3 billion in the half year ending June 30. However, PAGCOR’s profit rose by 24.9 percent to P3 billion. PAGCOR’s contribution to the government treasury amounted to P13.4 billion.

The year-over-year increase in revenue was slower in the second quarter due to the temporary shutdown of gaming operations after the gun attack at the Resorts World Manila in June. However, the agency is now considering a complete transition to a regulatory role. But the casinos reported a revenue of P5.2 billion and slot machines a revenue of P6.1 billion. Income from electronic bingo was P4.4 billion but its licensed private casinos added a revenue of less than P9.5 billion.

The Philippine Offshore Gaming Operators (POGO) reported income of less than P1.1 billion in the first quarter. PAGCOR hopes that the POGO program would generate an income of $120 million eventually. The tax rate on revenues from RNG games remains pegged at 2% but operators would have to pay a sum of $150K as Monthly Minimum Guarantee Fee (MGF).

The POGO program was initiated as a part of the government’s efforts to foist tighter supervision over operations, which were overlooked by authorities in the Philippines’ special economic zones. PAGCOR would also be deploying monitoring teams to ensure that POGO licensees comply with regulatory requirements.

Pagcor to limit Philippine online gaming licenses to 50

The Philippine Amusement and Gaming Corp. (Pagcor) said this week it is planning to initially trim the number of online gaming operators in the country to a maximum of 50. This measure is to prevent an oversupply of players in the industry.

Philippines flagJose Tria Jr., assistant vice president of Pagcor’s Offshore Gaming Licensing Department, said the regulator is eyeing to impose a moratorium to limit the number of Philippine offshore gaming operators (POGO) until it is sure that the increase in players is not overtaking the demand. “We need to evaluate first if the industry is already oversaturated,” Tria told in an interview.

However, the Pagcor official clarified that such moratorium could be lifted anytime. “It depends on the evaluation. The saturation of the market can be seen in the audit system. If the income of each operator goes down from the previously reported, this means there are too much operators,” Tria added.

Tria said an oversaturation means that additional operators do not bring in additional income to the industry. “They are just dividing between themselves [the income] instead of increasing it. That means it’s already saturated,” he said.

Pagcor has so far issued 42 licenses to offshore operators to date. Pending applications, meanwhile, have gone down to 12 from the initial list of 44, Tria said. “After we released the list, we wrote a letter to the pending applicants. A lot of them did not pursue their application.”

Should the moratorium be imposed, only eight new operators stand to get their license application approved.

Rodrigo Duterte Gaming tycoon Jack Lam flees Philippines, has casinos shut down amid sabotage and bribery allegations

One of Asia’s most influential gaming industry figures has been forced to flee the Philippines after becoming a prime target of President Rodrigo Duterte’s crackdown on drugs and gambling.

Head of state Duterte ordered Jack Lam Yin-lok – chairman of Hong Kong stock exchange-listed Jimei International Entertainment Group Limited – be arrested if he attempts to enter the Philippines, where he faces allegations of economic sabotage and high level bribery.

The dramatic and unusual presidential order – understood to have been issued after Lam left the Philippines on November 29 for an unknown destination – followed the arrest of more than 1,300 Chinese nationals at his Fontana Leisure Parks and Casino in Clark, the former United States air force base.

Those arrested are accused of working illegally for an online gaming operation run by the Macau-based Hong Kong resident Lam. Philippines gaming regulators have since closed Lam’s Clark operation and the Fort Ilocandia Casino, which is also operated by the Jimei Group.

Information from gaming insiders that Lam had travelled to Macau on leaving the Philippines could not be immediately confirmed by the South China Morning Post.

Trading in Jimei shares was halted on Monday. In a statement released on Tuesday, the company said: “The board of directors of the company has noted recent press articles relating to alleged bribery and economic sabotage by a director and the controlling shareholder of the company and the issue of order of arrest.

“The articles relate to alleged involvement by Dr Lam Yin Lok, an executive director and controlling shareholder of the company in economic sabotage in the Philippines and bribery.

“The company clarifies that the gaming operations cited do not form part of the group’s business. The board confirms that the incident mentioned in the articles relate to Dr. Lam and is his own personal matter and in no way materially affects or involves the company and its subsidiaries, nor is it expected to affect the normal business operation of the group nor any other current or future plans.”

The company added that as far as it was aware, Lam had not been held by the Philippine authorities.

Duterte ordered Lam’s arrest on December 3 amid contested allegations that he tried to bribe Philippines Justice Secretary Vitaliano Aguirre II and the head of the Philippine Amusement and Gaming Corporation, Andrea Domingo, to release the more than 1,300 Chinese nationals arrested November 24.

According to local media reports in the Philippines, Lam left the country on November 29.

The casino was temporarily closed “pending the investigation of the Department of Justice (DOJ) of illegal or unlicensed online gaming operations and employment of aliens without proper permits, which is a violation of the anti-illegal gambling, labor and immigration laws”.

Requests for comment from Lam, Jimei and Lam’s lawyer in the Philippines, Raymond Fortun have not yet been responded to.

Jack Lam is one of the largest VIP junket operators in Asia and Jimei is key to the fortunes of two of the city’s most important gaming companies, Las Vegas Sands and Wynn Macau. The players he has brought to Macau are some of the biggest “whales” in the business.

In addition to junket services, Jimei operates two casino cruise ships – the M.V. Jimei, out of Hong Kong, and Xiang Xue Lan, with routes between China and South Korea. The company opened its first casino in Macau in early 2009, in the Mandarin Oriental hotel.

Lam is also a member of the Guangdong Provincial Committee of the Chinese People’s Political Consultative Conference.

Philippines introduces new online gambling regulations

A Philippine legislator has proposed to introduce a new bill in the country to strengthen the protection for minors accessing online gambling.

Samuel Pagdilao a former policeman and now party legislator in the Philippines has introduced Bill 4540 which seeks to monitor online gambling and protect minors from “the pernicious effects of gambling.” Said Pagdilao.

The introduction of the Internet has had a great impact on the ways people could participate in gambling, according to Pagdilao.

“People are no longer bound to physical locations and are able to face their bets from within their own homes,” Pagdilao said.

The Bill would seek to punish any licensed online gambling operator who fails to stop underage gambling on their site with a prison term of 5 to 10 years in prison and or a fine of $115,000 to $230,000.

There would also be a penalty for any adult enticing a minor to gamble online of 5 years to 10 years in prison and or a fine of $2,000.