By Aubrey Rose A. Inosante, Reporter
TAXES will not be sufficient to curb online gambling addiction, and must be accompanied by programs to mitigate the industry’s negative social impact, economists said.
Taxes are “not a cure-all. A tax can certainly signal that it is not encouraged behavior. But, you have to remember, (gamblers) are people used to losing money,” according to former legislator Jose Ma. Clemente S. Salceda, who used to chair the House Committee on Ways and Means.
He also pushed for “circuit breakers for people who repeatedly lose, or who seem addicted already.”
“We have to be clear about our objectives first so that we can design tax policy right. If the goal is behavioral, the design will be different than if the goal is to raise revenues,” Mr. Salceda said.
The government has been urged to tax online gaming to discourage excessive gambling, but he warned that levies and tighter regulation won’t be enough to curb addiction.
“I think a tax on bets should be explored,” he told BusinessWorld over the weekend.“But since online gambling is domestic consumption, unlike POGOs (Philippine Offshore Gaming Operators), it can definitely be the subject of an excise tax,” according to Mr. Salceda, who now chairs Salceda Research, Inc.
Finance Secretary Ralph G. Recto has said he will seek to tax online gaming.
Mr. Recto also called for the study of policy options aimed at limiting unrestricted access to digital gambling platforms.
Legislators have introduced bills aimed at stopping electronic wallet platforms from promoting gambling apps, raising the legal gambling age and limiting the cash-in minimum requirement.
Mr. Salceda wrote Republic Act No. 11590 of 2021, which taxed offshore gaming firms, which have since been banned by President Ferdinand R. Marcos, Jr.
John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said taxation and regulatory circulars from the Bangko Sentral ng Pilipinas are “first steps,” but insufficient on their own.
“These measures can discourage excessive play through tighter controls and financial safeguards, but behavioral interventions, public awareness, and stronger platform regulation must complement them,” Mr. Rivera said.
The Philippine Amusement and Gaming Corp. (PAGCOR) said it is enforcing a code of practice across its regulated entities, including a player exclusion program that allows individuals or their families to voluntarily withdraw players from gambling.
PAGCOR has also partnered with rehabilitation centers such as Bridges of Hope and Life Change Recovery Center, which offer counseling, psychological support, and treatment for gambling addiction.
Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms said the Philippines should follow the example of Singapore and South Korea in restricting citizens from gambling in casinos.
“The gambling industry must be heavily regulated. In fact, it must be discouraged. Gambling has huge social costs.And it is an open secret that the gambling industry is a conduit for illicit financial flows,” he said.
Meanwhile, Mr. Sta. Ana said the government should not rely too heavily on gambling for revenue.
“While revenue will be earned from online gambling, the main objective of the tax is not to generate revenue but to deter people from engaging in gambling by making it costly,” he said.
In May, PAGCOR reported that gross gaming revenue (GGR) rose 27.44% to P104.12 billion in the first quarter, with electronic gaming out-earning physical casinos for the first time.
The electronic segment generated P51.39 billion or 49.36% of GGR in the three months to March.
Jose Enrique A. Africa, executive director at think tank IBON Foundation, said restricting locals from casinos may create a double-standard of “still promoting it for foreigners” which he said “reeks of opportunism.”
“It also wouldn’t be real reform because rich locals can still gamble abroad while driving lower-income groups to online or informal gambling. Still, it could stir welcome public debate on the ethical basis of government revenue sources,” he said.
“From the perspective of curbing gambling addiction, the problem isn’t just access to gambling but the broader economic and social context that drives people to gamble including desperation on the part of lower income groups,” he added.
Mr. Africa urged more focus on improving public services, creating decent jobs, and generating equitable economic opportunities to make gambling less appealing.