The Philippine iGaming market continues to attract ambitious operators from across the globe, yet a troubling pattern persists: many international businesses fail to gain traction or collapse under regulatory pressure. Regulatory obstacles, including licensing and anti-money laundering requirements, are particularly challenging for newcomers, and the ban on Philippine Offshore Gaming Operators (POGOs) has fundamentally changed the competitive landscape, forcing operators to adapt to a local-centric strategy rapidly.
Major operators like DigiPlus have reported severe financial impacts, with revenues falling 25 per cent year-on-year following regulatory changes, whilst net income and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) declined 33 per cent and 42 per cent respectively. Furthermore, when Philippine Amusement and Gaming Corporation (PAGCOR) mandated e-wallet delinking, iGaming transactions through licensed operators plummeted by 50 per cent, whilst the black market surged by 40 per cent in users, according to a study by the research company The Fourth Wall.
Speaking exclusively at SiGMA Asia 2026, iGaming consultant Jonas Diego shared why regulatory compliance and cultural comprehension have emerged as the two main reasons why expansion endeavours in the Philippines have failed. In addition to this crucial insight, he shed light on the potential that operators have to rethink their compliance strategy by viewing it not as a chore but as an advantage for sustainable business practices.
Diego also revealed what PAGCOR’s tightening regulatory grip means for the industry over the next three to five years, and why artificial intelligence represents both the greatest opportunity and the major risk that operators and regulators must grapple with.
Two critical mistakes for new entrants
When international operators step into the Philippine online gaming industry, they will usually experience certain roadblocks. According to Diego, there are actually two types of issues that could stop the best companies in their tracks.
First is the dangerous underestimation of regulatory compliance. As Diego stated, “Number one is underestimating the regulatory compliance required to do business in the Philippines. There are a lot of nuances in terms of how you get your licence, your business registered, and if you’re not careful, this could lead to a lot of delays and sometimes outright not getting your licence, which is not a good thing.”
The second mistake involves cultural neglect. Diego emphasises this point directly: “A lot of operators do not take the time to get to know the country, get to know the culture, the people.” While this does not necessarily spell the end of a company enterprise, it is still a squandered opportunity. It is undeniably true that knowing the culture and conducting proper market research provides a significant competitive advantage.
Viewing compliance as opportunity
Diego insisted operators to reframe compliance not as a burden, but as a strategic asset.“You have to stop thinking of it as a challenge, but as an opportunity.” The key lies in discovering the sweet spot: developing products that genuinely excite customers whilst remaining rigorously compliant with regulatory expectations.
Not only does non-compliance create issues with the regulators, but it creates an issue regarding the sustainability of the business model over time. Business owners need to move beyond being reactive and consider the short and long-term needs.
PAGCOR’s evolving regulatory landscape
Diego believes there will be even more regulation within the next three to five years. Most importantly, he considered it a positive development for the sector: “We are going to see more regulation, not less. This is a good thing. We are building a reputation in the region, I hope globally, as a safe space.”
In early 2026, PAGCOR announced some of the toughest iGaming rules the region has ever seen. To eliminate identity fraud, strict new Know-Your-Customer (KYC) requirements now require players to provide a valid government ID and a real-time selfie verification before they are even allowed to make a deposit. Furthermore, while gambling ads are already legally blocked on radio and television during prime-time hours, regulators are currently finalising frameworks to evaluate a total, round-the-clock broadcast ban. To combat the rising social costs of these digital platforms, PAGCOR also officially launched a 24/7 National Problem Gambling Helpline handled by trained para-counsellors in partnership with the Seagulls Flock Organization Inc.
Increased regulation serves a critical purpose: it helps establish the Philippines as a safe and credible jurisdiction within the region and potentially globally.
AI: The game-changing technology
When asked about emerging technologies. Diego spoke with notable conviction, “Bar none, it’s going to be AI, and mind you, I say this with a certain degree of seriousness. As we know, it is progressing at breakneck speed.”
During a recent budget meeting in the Philippines, PAGCOR Chairman Alejandro Tengco said that the regulator is currently exploring advanced AI tools to bolster its control of the thriving online gaming business. To combat fraud and the advent of highly sophisticated “bad actors” that use altered or forged documents, PAGCOR intends to introduce AI-powered e-KYC protocols that detect modified digital IDs in real time.
Diego approaches this assessment with evident seriousness. Artificial intelligence is advancing at a record pace, and operators across the sector: AI will increasingly incorporate it into their business operations, customer acquisition strategies, and marketing efforts. “You definitely are going to see a lot of operators incorporating it in the way they do business, in their operations, how they market,” Diego explained.
The challenge is considerable because the benefit cuts both ways. Legitimate operators and regulators must understand AI, but so too will bad actors seeking to exploit the technology.
Diego further warned, “The government, PAGCOR specifically, will also need to get very, very familiarised because to regulate it properly, they need to be aware. And that’s very, very important because operators, PAGCOR, but you can be sure that the bad actors will also be taking advantage of this technology,” Diego warned.
Diego remains balanced in his assessment. He does not view AI as inherently malicious; rather, he recognises that the technology can unlock tremendous value for the gaming industry.
“I’m not saying that AI is a bad thing. The technology can unlock significant value for our industry. But having said that, I’m realistic about the good it can bring and the bad it could bring,” Diego concluded.
Asian iGaming returns to the City of Dreams. From 30 November to 2 December 2026, SiGMA South Asia unites 3,500+ industry leaders, innovators and decision-makers in Colombo to shape the future of gaming.
