The Philippine government is moving closer to separating the Philippine Amusement and Gaming Corporation’s (PAGCOR) regulatory and casino-operating functions, with the proposed privatisation of Casino Filipino properties expected to proceed before the end of 2026.
The long-planned restructuring, which would see PAGCOR focus solely on its role as the country’s gaming regulator, comes as the Philippine gaming industry grapples with weaker revenues, softer tourism demand, and tighter oversight of financial-crime risks.
PAGCOR Chairman and Chief Executive Officer Alejandro Tengco told local reporters that the Governance Commission for Government-Owned or Controlled Corporations (GCG) is expected to submit its recommendation on the proposed separation to the Office of the President in August. The proposal would then be reviewed before an Executive Order is issued, paving the way for the government’s exit from casino operations later this year, according to local media reports.
GCG Chair Marius Corpus said the review remains underway and is expected to be completed within the year, after which the reorganisation would be implemented in phases. BusinessWorld reported that existing integrated resort operators have already shown interest in the planned privatisation.
The proposal has been under discussion for years as part of efforts to remove the perceived conflict of interest arising from PAGCOR acting as both regulator and operator of casinos.
Gaming slowdown weighs on revenues
The privatisation plans come at a challenging time for the Philippine gaming sector.
The industry recorded gross gaming revenue (GGR) of PHP87.6 billion ($1.5 billion) in the first quarter of 2026, down 15.9 per cent from PHP104.1 billion ($1.7 billion) during the same period last year. Electronic gaming posted the largest decline, falling 22.4 per cent year on year.
According to The Philippine Star, Tengco said second-quarter performance also remained weak, although official figures have yet to be released. The downturn has been attributed to geopolitical tensions in the Middle East, which have affected international travel and consumer spending.
BusinessWorld reported that lower fuel prices and easing inflation may help improve consumer spending in the second half of the year, with PAGCOR expecting electronic gaming to lead any recovery.
While overall international visitor arrivals increased 7.9 per cent during the first five months of 2026, arrivals from South Korea, one of the Philippines’ largest casino tourism markets, declined by 10 per cent over the same period, according to the Department of Tourism.
PAGCOR tightens anti-money laundering controls
Alongside the proposed restructuring, PAGCOR has instructed all regulated gaming entities to strengthen their anti-money laundering (AML) and counter-terrorism financing controls following the release of the latest Casino Sector Risk Assessment.
According to the assessment, covering the period from 2021 to 2024, the Philippine casino sector remains exposed to money laundering risks because of high-value cash transactions, complex business structures, foreign patronage, VIP programmes and junket relationships.
The review also found medium-high exposure to terrorism financing risks despite no confirmed cases involving PAGCOR-regulated entities during the assessment period.
Land-based casinos were identified as particularly vulnerable because of their dependence on foreign high-value customers and intermediaries, making it more difficult to verify the origin of funds and identify the individuals controlling transactions.
The assessment highlighted proceeds from crimes such as fraud, cybercrime, illegal drug trafficking, tax evasion and environmental offences as potential sources of illicit funds entering the gaming ecosystem after passing through banking or digital payment channels.
PAGCOR said it has directed operators to incorporate the assessment’s findings into their institutional risk frameworks and warned that failure to comply could lead to stricter supervisory or enforcement action during future audits.
If approved this year, the restructuring would mark one of the biggest changes in PAGCOR’s more than four decades of operation, ending its dual role as both regulator and casino operator while opening Casino Filipino assets to private sector ownership.
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