Philippines' gaming shake-up has begun, expert says
The shake-up in the Philippine gaming industry has already begun as tighter regulation reshapes the market, favouring operators investing in compliance and long-term growth while putting weaker licence holders under pressure, according to Diego Cruz, Commercial Manager at Arden Consult.
In an exclusive interview with SiGMA News, Cruz said the Philippine Amusement and Gaming Corporation’s (PAGCOR) Minimum Guarantee Fee (MGF) will accelerate that shift over the coming months, rewarding operators that have invested in compliance, stronger products and sustainable revenue.
“The ones that outperform will be those investing in compliance and operational substance, and growing GGR the durable way, through real marketing and product rather than buying volume with aggressive rebates,” Cruz told SiGMA News. He said operators broadening their game portfolios and working with PAGCOR-accredited international providers will be better placed to grow as the market matures.
“A big part of that is differentiating on product. Most of the market has converged on the same set of games, so the operators pulling ahead are the ones broadening their offering and bringing in new platforms and titles,” he said.
Rather than waiting for regulations to ease, Cruz said successful operators are engaging with PAGCOR and adapting to tighter oversight. “In other words, I would bet on the operators building real businesses, not just holding licences.”
By contrast, Cruz warned that operators relying on dormant licences while treating compliance as a cost rather than an investment face mounting pressure. “The operators I would worry about are the ones doing the opposite: sitting on licences without operating meaningfully, treating compliance as a cost to minimise, and assuming the regulatory environment will revert to what it was before August 2025.”
Around 40 operators below the benchmark
Cruz said the MGF will speed up consolidation across the industry. Under PAGCOR’s framework, operators offering electronic casino games will pay the higher of their revenue share or a monthly minimum guarantee of PHP9 million ($146,779), rising to PHP10.5 million ($171,242) in a later phase. Non-casino operators face a PHP3 million ($48,926) monthly minimum, increasing to PHP4 million ($65,235).
According to Arden Consult’s research, only around 25 of the country’s 65 accredited gaming service providers currently generate enough monthly gross gaming revenue to meet the PHP30 million ($489,264) benchmark underpinning the MGF. “Another handful hover just below,” Cruz said. “Around 40 fall well short.”
“A deferment buys those operators time, but it does not create volume, and for a licence holder that still cannot clear the floor, the most likely outcomes are surrender or M&A,” he said.
Cruz said tighter regulation reflects a maturing market rather than a weakening one. He pointed to Brazil, where online betting regulation introduced in 2025 has already driven consolidation toward better-capitalised, more compliant operators.
“The Philippines is on that path too. Markets that begin with low barriers and many licensees tend to consolidate as the regulator matures, and the operators that treat that as a threat rather than a natural progression are usually the ones that do not make it through.”
Sports betting remains overlooked
While operators focus on online casino products, Cruz believes investors continue to underestimate sports betting. “The one that does not get enough attention is sports betting, and specifically how much of it is happening outside the legal market,” he told SiGMA News.
According to Arden Consult’s analysis, legal sports betting accounts for only about 4 per cent of online gaming gross gaming revenue. Cruz said the actual market is much larger, with most betting taking place on offshore and illegal platforms.
“The actual betting activity is far larger; it is just sitting on illegal and offshore platforms rather than with licensed operators.”
He also noted that PAGCOR has reduced tax rates for live sports betting to 15 per cent of gross gaming revenue, compared with around 30 per cent for e-casino operations. “The regulator is signalling, fairly clearly, where it wants growth to come from.”
“The Philippines is one of the most basketball-obsessed countries in the world, and one of the most gaming-saturated, consistently ranking near the top globally for the share of people who play video games, which feeds naturally into e-sports,” he said, noting that the demand is already there. He said many Filipinos regularly place bets through offshore platforms without realising those operators are unlicensed.
“As a sports fan myself, I see people around me betting all the time, almost always on offshore apps, usually without realising the platform is not even licensed here.”
For licensed operators, he said, that represents one of the market’s biggest opportunities. “With the tax advantage and demand at that scale, sports betting is the closest thing to a blue ocean in Philippine online gaming.”
Foreign firms warned against shortcuts
Cruz also cautioned international gaming companies against assuming they can enter the Philippine market simply by acquiring an existing licence. “The biggest mistake I see among international operators keen on entering the Philippines is assuming they can simply buy their way in.”
“A licence is not a transferable asset you can quietly pick up and run with. Any change in ownership or control goes through PAGCOR, and the regulator has the final say,” he said.
“Securing the licence is only the entry point, not the whole job. The relationship with the regulator is what determines whether you succeed, and that is built and maintained well beyond the transaction,” he added.
Cruz also noted that acquisitions are not the only route into the Philippine market, with B2B partnerships permitted under the existing framework, subject to PAGCOR approval. He said another common mistake is assuming strategies that succeed elsewhere will automatically work in the Philippines.
“The regulatory culture, the relationship operators are expected to have with PAGCOR, the role of local partners, the way the illegal market interacts with the licensed one, none of it maps neatly onto other jurisdictions,” he said. Instead, Cruz said successful entrants understand the local market, build relationships with regulators and local partners early, and invest in long-term compliance from the outset.
For Cruz, the industry’s shake-up is already underway. As compliance standards rise and competition intensifies, he expects operators building sustainable businesses to emerge stronger, while those relying solely on licences face consolidation, acquisition, or exit.
Mobile-first gaming, localised payments and AI-powered retention are redefining Asia’s gaming landscape. Explore the latest regulatory developments, market shifts and emerging opportunities in the SiGMA Asia Market Report 2026. Check out now.
