PhilWeb Close to Regaining eGames License in the Philippines

Monday, December 26th, 2016 | Written by April Bergman
PhilWeb Close to Regaining eGames License in the Philippines

PhilWeb Corp., which provides software for 268 different gambling-related Internet cafes in the Philippines, filed with the Manila Stock Exchange today stating it soon will receive a gaming license. In the filing, PhilWeb said the Philippine Amusement and Gaming Corp (PACGOR) is expediting the procurement process for gaining an eGames license.

The executives at PhilWeb released a December 11 letter from the head of PACGOR, explaining the reasons for any delay in the process. The new release shows the relationship between the Philippine government and its gambling industry might be less black-and-white than many had feared.

PhilWeb’s eGames Monopoly

The filing came four months after the administration of President Rodrigo Duterte said it would eliminate PhilWeb’s monopoly status. When the decision was announced on August 20, the company was owned by Philippine billionaire, Roberto V. Ongpin, who was an outspoken Duterte critic in the runup to the national election.

Severals time since he took office in July, Rodrigo Duterte served notice that he was going to be tougher on the Philippine gambling industry, especially the online and electronic gaming industries. Because PhilWeb belonged to a political opponent and it was the only gaming company at that time being targeted a few weeks into the Duterte administration, much was made about the political nature of the move.

Ongpin Sold to Areneta

Since then, Roberto Ongpin sold his 53.7% stake in PhilWeb to Gregorio Areneta. The deal involved 771.65 million shares of Philweb priced at P2.60 per, which was a 58% discount on the price of shares when the Philippine Stock Exchange closed that day (October 6). By that time, Areneta was serving as the chairman of the board for PhilWeb. Dennis Valdes remained as president of PhilWeb.

When the October sale was announced, PhilWeb released a statement which said, “With the divestment of Ongpin, the new management of PhilWeb will now reapply for the continuation of its license with PAGCOR (Philippine Amusement & Gaming Corp.) for its nationwide network of eGames cafes.

PACGOR on PhilWeb’s Licensing

Andrea Domingo, the Chairman and CEO of Philippine gaming regulator, PACGOR, sent a letter to PhilWeb marked December 11 and received December 22, which confirmed that the licensing was in progress. Mrs. Domingo’s letter noted that the licensing process was “on schedule with the timeline [we] provided [your] representatives”.

The release of that information is seen as a good sign for those who follow the gambling industry in the Philippines. Andrea Domingo said any delays had to do with the agency being swamped with applications, after Duterte said up to 25 different eGames licenses might be offered by the government. The head of PACGOR contrasted the activity with the previous licensing process, when PhilWeb “was essentially the lone service provider more or less a decade ago.

2003 PhilWeb Licensing Process

PhilWeb received licensing to operate its eGames monopoly in 2003. Egames are computers with software which mimics the games in brick-and-mortar casinos. The eGames cafes offer a product similar to online casinos, except PhilWeb gaming was legal in the Philippines.

Rodrigo Duterte’s Career

Despite the good news for PhilWeb, that news was overshadowed by the December 22 announcement by Rodrigo Duterte that his government was “ordering the closure of all online gambling” in the nation. That statement was walked back by administration officials, after shares in the country’s online gambling companies plummeted on the stock exchange. Officials stated the president was discussing only illegal online gambling companies.

Rodrigo Duterte is a divisive figure. His supporters argue that the Philippine democracy has been infamously corrupt over the years, so bribery and corruption allows the wealthy or well-connected immunity from justice. They supported the strong man, because he was ran on an anti-corruption platform.

Opponents of Duterte point to his decades as the mayor of Davao City, when he led extrajudicial killing squads for drug dealers and other assorted drug criminals. They argue that Duterte, by refusing to work within the justice system, is making himself a criminal like those he says he fights. When challenged on his record of alleged human rights abuses, Duterte has unleashed profanity-laced invectives against his domestic and international critics.