The Republic of Philippines fully supports regulated gambling and casino activities, recognizing the vital role this sector holds in the country's tourism and entertainment industry. Seeking speicifically to develop the economy of the Cagayan province, an important trade route and a strategic crossroads point located between the Pacific Ocean and South China Sea, the government saw internet gaming as an ideal avenue through which to facilitate the entry of the Philippines into the Asia Pacific markets. To this purpose, the Cagayan Special Economic Zone and Freeport was established to serve as a new gaming jurisdiction. The Cagayan Economic Zone Authority has appointed the First Cagayan Leisure and Resort Corporation as Master Licensor, whose primary role is to supervise and manage all activities pertaining to interactive games.
Although government owned, CEZA is for all intents and purposes an autonomous entity, acting independently from other state agencies. After thoroughly studying recent developments in the international scene, the Zone has established itself as an all-inclusive jurisdiction committed to a safe, fair and reliable gaming. Virtual casino and sportsbook companies seeking to operate in Asia, under the supervisory control of the Zone, are attracted to this reliable regulator offering competitive licensing regime, cost-effective system and stringent protection protocols. In addition, the fast-growing and largely unoccupied region, with high-speed telecommunications and broadband services is an excellent business opportunity for any aspiring e-gaming operator.
FCLRC's main purpose is to manage and regulate the entire gambling enterprise in the region and its neighbouring municipalities, on behalf of CEZA. All internet and land-based gaming activities in the Freeport area are monitored through a central hub, which serves as a window into wagering operations, web sites, software, administrative and telecommunication services, payment systems, and all other elements of importance that take place within relevant territories.
As the main licensing agency, First Cagayan conducts application, licensing and taxing procedures for domestic and foreign operators wishing to offer real-money wagering in the region.
The Philippine jurisdiction is especially popular due to its broad licensing scope. In accordance with the Interactive Gaming Act 2003, all types of interactive games are allowed and regulated, meaning that any casino, bookmaker, lottery or bingo operator can apply for the authorized entry into the growing market.
Even though its attitude is welcoming and all-inclusive, the application and licensing requirements imposed by First Cagayan, reflect a serious entity whose goal is to maintain a safe environment for both operators and players. Genuine companies, capable of fulfilling all requirements, should not have a problem obtaining a permit, on the condition that they do not solicit local Philippine punters. Despite its liberal views, the regulator is very strict when it comes to frauds, criminal groups and suspect black market organizations.
Applicants are carefully screened, and submitted to elaborate background and software checks to determine whether or not they are fit to establish a legitimate business. Once cleared, operators are granted a desired license, and are hence forth obliged to pay a one-time provisional fee based on the type of permit received, additional monthly gross win fee for casino and sportsbook operations, and and an annual renewal fee. All entities registered in the Special Economic Zone are subject to a five per cent corporate tax rate, as well as an additional gaming tax rate in the amount of two per cent of net win on a monthly basis.
New Gambling Law and Pending Adjustments
With the expansion of illegal gambling reaching into Asia, as well as recent anti-gambling campaigns in the state, FCLRC was forced to change its licensing policy to a certain extent, in order to protect the vulnerable market. Around 2016, the jurisdiction entered a transitional period, during which no new licenses were granted to applicants. Although most existing companies are not in danger of losing their position in the region, a potential increase on the standard fees may affect the future growth of the industry, and compromise the position of CEZA as a primary regulator in Asia and the Pacific.
In 2017, CEZA adopted a new business strategy in hopes of retaining its online licensees. Focusing in particular on improving the First Cagayan's hosting and connectivity capabilities, the corporation will invest in the facilities and infrastructure within and around the Freeport area.
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