One of the most profitable and lucrative online businesses that exist today is any form of gaming or gambling. Poker, casino, and sports betting is multi trillion dollar a year industry.
Companies wanting to take advantage of these markets are constantly looking for locations to setup and operate from. While it is possible to operate on a small scale without acquiring a license; it certainly isn’t legal and once you reach a large scale operation it is impossible that countries will not investigate your location to see if you are operating legally.
Currently there are several European and Latin American countries that allow for the registration of the “i-gaming licenses”. They have strict requirements and can ask for at least 5% of your gross winnings to operate. There are also restrictions on your location and these countries are not cheap to operate in.
Philippines is currently the only country in Asia offering an “i-gaming license” or a permit to run an online casino. In the Philippines there is a government corporation known as PAGCOR (Philippine Amusement and Gaming Corporation) which has the exclusive license on all gambling activities in the country. PAGCOR has licensed exclusive rights for online gaming to one company, Philweb, until the year 2032.
Previously, if a company wished to engage legally in the industry, it would have to pay massive percentages to Philweb and have to deal with messy bureaucracy. This went on until 1995 when the Philippines passed Republic Act. 7922 which allowed for the creation of the Cagayan Economic Zone Authority. In CEZA a new gaming license was created, which allowed for operators to locate within the Economic Zone and operate online gambling legally from the Philippines.
The license is cheaper than most other countries at only 2% of the gross win and for sports betting or companies only providing gambling support services there is a yearly flat rate. Also by locating in the CEZA, you’re already guaranteed 5% income tax which can be reduced to 0 if you file for income tax holiday in the Philippines. There is the added bonus of being able to employ competent, English speaking, professional, cheap labor.
Currently there are many operators (around 40) using this license. Some of these are major brands known worldwide like Paragon and Bodog. The reason these companies keep it under wraps is they do not want other competitors coming in and pirating their employees :).