EO 74 and SCBPOs

To those asking for my opinion- SCBPOs are Excluded from the POGO Ban

My phone has not stopped ringing / beeping since 3:10pm today, so I figured I would write this for the general public. For my clients, I've reached out to all of you personally and have given more information and insights.

Thankfully, I have never had a POGO/IGL client in all my years of being a gaming lawyer. So my sole focus while discussing and waiting for the final version of now Executive Order 74 (2024) issued today, November 8, 2024, was on the Special Class of BPOs. I have advocated for the exclusion of legally-constituted SCBPOs from any ban, given the benefits that the industry has brought to the Philippines and to Filipinos-benefits that I have seen first hand.

My opinion is that EO 74, based on how it is drafted, does NOT include SCBPOs in the list of entities that are subject to the POGO/IGL ban. While it is best to wait for PAGCOR’s position and the results of a TWG between PAGCOR and the Office of the President starting next week, a reading and familiarity (and sometimes, obsession) with the rules of PAGCOR allows for the following:

1. SCBPOs are not included in the definition of POGOs under the EO. Under Section 1 (Coverage), POGOs “…refers to entities that provide and participate in offshore gaming services. POGO as used in this Order shall include: (a) POGO Licensee which refers to a POGO duly licensed and authorized by PAGCOR to provide offshore gaming services; (b) POGO Gaming Agent which refers to the representative/s in the Philippines of offshore-based licensees; and (c) POGO Service Providers which refer to duly constituted business corporations organized in the Philippines which provide components of offshore gaming operations to POGOs such as strategic support provider, IT support provider, live studio and streaming provider and gaming software platform provider.”

?SCBPOs do not fall under any of the categories of (a) to (c) above as they do not provide components of operations to POGOs.

2. Section 1(b)(ii) of the EO does not include SCBPOs. Section 1(b) lists down, as those included in the ban, “gaming agents and accredited service providers providing ancillary services to offshore gaming licensees”. SCBPOs do not provide ancillary services to offshore gaming licensees. In fact, under the Amendments to the Regulations on SCBPOs, under “Prohibited Acts”, it is expressly indicated that SCBPOS “…must not service any of PAGCOR’s offshore gaming Licensees.”

3. Section 2(b) of the EO does not include SCBPOs. Section 2(b) states that applications for “new licenses, permits or authorizations of POGO/IGL and other offshore gaming applicants, as well as applications for other licenses, permits, or authorizations for POGO-, IGL-, and other offshore gamingrelated/auxiliary/ancillary services catering to the foregoing, under the authority of PAGCOR and other government licensing authorities, and within the jurisdiction of the Republic of the Philippines, shall no longer be allowed.”

SCBPOs are not covered under “other offshore gaming-related/auxiliary/ancillary services catering to the foregoing”, as SCBPOs do not provide auxiliary or ancillary services to POGOs/IGLs or other offshore gaming applicants.

The key here is that the ban is always linked to offshore gaming operations and services – which is really the crux of the EO. Under Section 1(b) of the EO, “Offshore Gaming Operations/ Services” refers to “…online games of chance, limited to livestreamed electronic casino (e-casino) games, online random number generator (RNG) games, and online sports betting, exclusively and directly offered to foreign players, located outside of the Philippines, via the internet or online means…”

Under the definition of SCBPOs, these are entities that are “servicing legitimately licensed gaming operators abroad and do not in any way handle betting but purely product marketing and customer relations and are not servicing any of PAGCOR offshore gaming licensees, and have at least 90% Filipino workforce."

As I mentioned, it is best to wait for clarifications from the regulatory bodies, specifically PAGCOR. It is highly likely that the rules for SCBPOs may be amended to clearly define their framework (as outside offshore gaming). Looking forward to working with PAGCOR to ensure that SCBPOs will not be tainted by bad actors and protect the thousands of Filipino workers and the legitimate foreign investors in this industry.

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