The Philippines’ once-thriving slot machine market has suffered a significant blow in early 2025, largely due to the government’s crackdown on Philippine Offshore Gaming Operators (POGOs), which officially ceased operations at the end of 2024. The repercussions have rippled across the country’s land-based gaming sector, dragging down revenues, disrupting supply chains, and prompting concerns about the viability of domestic manufacturers.

Chang Nam, Deputy General Manager at South Korea’s Kangwon Land, Inc., explained the gravity of the situation during the G2E Asia conference. “The Philippine market is our main target, but this year the market is not good from the beginning of the year,” Nam remarked according to Asia Gaming Brief, attributing the downturn to the disappearance of POGOs. “I think they close down the online gaming, POGO, that’s one of the reasons,” he stated, highlighting the sector’s once-strong dependency on online gaming outfits.

Nam further emphasized the POGO sector’s influence, noting that many operators were top-tier casino clients. “They are VIPs of the casinos because they’re making a lot of money from POGO. They play a lot on the games,” he said. This shift, combined with declining tourism from key markets, has dealt a significant blow to overall gaming activity.

VIP Gambling Declines While Tourist Numbers Drop

The contraction in the Philippines’ slot machine segment has been underpinned by a sharp fall in VIP gaming activity. At major casino resorts such as Okada Manila and Solaire, earnings from high-stakes gambling have dropped markedly. Okada Manila’s operator posted a JPY7.56 billion net loss in the first quarter of 2025, with overall sales falling nearly 21%. Solaire experienced a similar dip, reporting an 18% decline in total gross gaming revenue, matched by an equal drop in VIP turnover, which reached PHP87.7 billion.

Industry insiders point not just to POGO-related issues, but also to dwindling Chinese visitor numbers. From being the Philippines’ second-largest source of foreign tourists in 2019, China has dropped to fourth as of 2024, with only 312,222 visitors. The first four months of 2025 saw Chinese arrivals fall further, down 34.4% year-on-year to just 92,659. In contrast, South Korea remains the top contributor, sending 468,337 tourists in the same period, though even this figure marked an 18% annual decrease.

Suppliers Struggle as Revenue and Orders Collapse

According to figures from the Philippine Amusement and Gaming Corporation (PAGCOR), slot revenues in the second quarter of 2025 plummeted by 42% year-on-year, landing at just ₱13.4 billion ($240 million). The POGO shutdown’s impact has been severe, leading to the loss of 9,200 jobs and the bankruptcy of 14 domestic gaming suppliers. POGO-linked venues, which previously hosted 68% of slot placements, are now functioning at just 19% of their former capacity.

The fallout has also affected companies along the supply chain. For example, Pacific Gaming, a key local manufacturer, saw a 73% drop in orders, while Novomatic paused a ₱1.5 billion factory project in Cavite. Operators like PhilWeb and Sun International wrote down ₱3.2 billion in losses, with ₱8.7 billion in slot assets stranded in areas such as Aseana and Bay City.

Amid this downturn, neighboring countries have picked up the slack. Cambodia’s NagaCorp saw a 22% boost in slot revenues, while Laos welcomed 17,000 additional slot machines—many sourced from Philippine operators offloading their equipment. Even Myanmar’s black-market border casinos are estimated to have absorbed ₱2.1 billion worth of refurbished machines.

Regulation Misfires and Black Market Expansion

PAGCOR’s attempts to contain the damage have yet to yield meaningful recovery. A ₱5 billion support package and tax relief for integrated resorts have not been enough to offset the vacuum left by POGOs. While new rules require casinos to dedicate 30% of their floor to locally made machines, brands like Aristocrat still dominate installations, outnumbering local models four to one at properties such as Solaire.

A troubling consequence of the sector’s decline is the surge in illegal gaming operations. In the second quarter alone, authorities shut down 136 unauthorized parlors and confiscated ₱1.9 billion in illicit slot machines—mostly repurposed POGO units. Yet this is only a fraction of the problem, according to the Anti-Money Laundering Council. Senator Risa Hontiveros voiced her alarm during a Senate hearing: “We’re subsidizing crime through inaction.”

Manufacturers are attempting to pivot toward markets like Vietnam, which is in the midst of a $1.6 billion gaming expansion. However, steep tariffs and growing competition from Belt and Road-backed Chinese suppliers are eroding prospects. New technologies such as blockchain slots and AI-based games have shown lukewarm results, with retention rates as low as 18% in pilot programs.

A Sector at a Crossroads

With its regional influence waning, the Philippines now accounts for just 6.2% of Asia’s $153 billion gaming equipment market—down sharply from projections of 15% market share by 2025. Kangwon Land’s Nam noted that while the Philippines remains appealing due to its openness to international suppliers and lower costs compared to Macau, the current environment is less welcoming.

“The Philippine market offers a wide variety of games, featuring suppliers like Aristocrat, Light & Wonder, Jumbo, and others,” Nam said. He added that high-stakes Korean tourists had found value in Philippine casinos: “Even if you play $10,000, you can get a room and many services. In Macau, you get nothing.”

As POGOs vanish and the domestic slot sector struggles to redefine itself, the future of gaming in the Philippines appears uncertain. Without effective reforms or a viable replacement for the POGO-driven economy, the industry may find itself caught in a game increasingly played elsewhere.