China and Philippines team up to tackle illegal gambling

As part of Beijing’s broader campaign to curb illicit capital outflows and a pledge by Manila to weed out unscrupulous operators from the country’s booming gaming industry, both governments have joined forces.

2017-05-08

Philippines

Reading time 1:25 min

As part of Beijing’s broader campaign to curb illicit capital outflows and a pledge by Manila to weed out unscrupulous operators from the country’s booming gaming industry, both governments have joined forces.

Martini Cruz, chief of the Philippines National Bureau of Investigation’s cyber-crime division, told Reuters authorities were preparing further raids in May targeting illegal betting and online fraud originating in the Philippines and targeted at Chinese gamblers.

“We have been visited by Chinese police to crack down on these illegal gambling operators. They are also targeting possible fugitives who have made our country a sanctuary,” Cruz said.

So far, the crackdown has not targeted proxy betting, which is permitted in licensed casinos in the Philippines and has contributed to a boom in VIP revenues. Casinos in the country raked in nearly $3 billion in overall revenue last year.

The practice, in which a gambler outside the casino gives instructions to an agent via a live stream or online platform, allows people to bet anonymously and can allow players to escape the attention of authorities in their home countries.

Industry executives have said increased scrutiny could impact the lucrative proxy business in the Philippines particularly if it continues to ramp up ahead of the official opening of Japanese slot machine tycoon Kazuo Okada’s new $2.4 billion casino in the capital Manila in July.

While proxy gambling is banned in Singapore and in Macau, the world’s largest gambling hub, it operates in a legal grey area in the Philippines and officials tend to tread cautiously when discussing the subject.

Andrea Domingo, the head of the Philippines gaming regulator, PAGCOR, told Reuters she was not familiar with proxy betting.

“It is allowed in the casinos. I am not very conversant about it,” she said.

Chinese law forbids citizens from gambling online and at home. The Public Security Bureau has made repeated statements since March that transnational cyber gambling is harmful to the country’s economic security, image and stability.

Yet proxy betting is growing at such a pace in the Philippines that Suncity, the top junket operator bringing in high rollers from China, told Reuters in April that 80 percent of its business comes from proxy gambling and 20 percent from customers traveling to casinos for live table games.