Pagcor misses $43 million in revenue from POGOs: audit
Philippine gaming regulator to step up efforts to collect more than a year old debts from Philippine Offshore Gaming Operators (POGO) totaling PHP 2.33 billion ($42.7 million) said the country’s public spending watchdog, the Commission. on verification.
According to the 2021 annual audit of state-owned Philippine Amusement and Gaming Corp (Pagcor), the regulator had uncollected claims on POGOs amounting to just over PHP 2.97 billion at the end of 2021. Of this total, PHP 2.33 billion has been classified as uncollected for more than a year since its due date, an increase of 57% compared to 2020. A portion of the receivables has been outstanding since until five years, the document says.
The auditors informed Pagcor of the results of the 2021 audit in a management letter dated June 13, which was posted this week on the Audit Commission’s website.
Of the PHP 2.33 billion in accounts receivable outstanding for more than 360 days, PHP 815.9 million are subject to “protests” by some POGOs who had been charged, according to the document. “Notwithstanding the accounts receivable under protest, the remaining PHP 1.512 billion has not been collected for more than one to five years,” the public spending watchdog pointed out.
He added: “The presence of large accounts receivable with POGOs has been a persistent problem for several years, despite the existence of collection procedures under [Pagcor’s] offshore gambling regulation manual. The manual also gives POGOs until the 15th of each month to settle their dues with Pagcor.
The Audit Committee recommended that Pagcor “evaluate/validate the accounts receivable under reservation and provide the necessary adjustments in the books”. It also suggested the gaming regulator to analyze “the effectiveness of the relevant provisions of the Offshore Gaming Regulation Handbook to improve the collection of regulatory fees”.
The gaming regulator said it had come across undeclared games, websites and operations suspected of being linked to POGO licensees. In December 2017, it engaged a third-party auditing platform service provider to provide accurate and near real-time gross gaming revenue (GGR) of POGOs.
Pagcor added that in early 2018, POGOs were charged an estimated fee based on the average revenue performance or average GGR for the last 30 days, multiplied by the regulatory fee percentage, as there was no defined amount of GGR from these suspicious websites.
“The affected POGOs, due to the substantial amount of regulatory fees, filed protest letters on different dates from May 2018 to October 2019. Some of the affected POGOs partially paid while others failed to pay the amount charged. , hence…the outstanding balances,” Pagcor said in its response letter.
The auditors noted that regulatory fees were not collected from seven POGOs that had filed protests about their billed fees, and that protests from four of these companies were still being handled by Pagcor even though these protests were filed with beyond an authorized period, contrary to the regulations in force.
The audit commission also said Pagcor should adhere strictly to charging and collecting regulatory fees and consider imposing what it called a “protest fee” on POGOs that file disputes.