HOW POGO STARTED

The President just announced the total ban of POGO in the PH. Here’s a repost of how POGO started.

My next posts will tackle how POGO started, its effects on the RE market, and ideas on what would happen after the ban.

Background

Chinese nationals are big gamblers. Casino operators in Las Vegas saw an opportunity to tap this market when Macau loosened its restrictions on foreign operators in 2002. New casinos sprouted in just a few years as foreign investors came in droves. By 2013, Macau’s gambling revenues grew seven times bigger than Las Vegas’.

China’s President, Xi Jinping, saw gambling as a threat to China’s economic progress because he thought that government officials used gambling to launder ill-gotten wealth. Not long after Xi took office in 2012, he launched an unprecedented anti-corruption campaign, cracking down, particularly on Macau casinos. Macau’s gambling revenues started declining in 2014 and have continued to fall.

As China enforced new laws to prevent Chinese nationals from gambling in Macau, gamblers moved to other locations, such as the Philippines. Casinos started to be built in the Philippines, particularly in the Bay Area: Solaire in 2015, City of Dreams in 2016, and Okada Manila in 2017.

In 2016, POGO operations began when PAGCOR started to award e-casino and sports betting licenses. A year later, POGO operations in Metro Manila boomed, leasing as much as 312,000 sqm of office space in Metro Manila in the fourth quarter of 2017 (vs. just 80,000 for the entire year of 2016).