Following investigations into lapses in the payment of taxes in small town lottery (STL) in the Philippines, the Department of Justice (DOJ) has decided to crack down on illegal online casinos. The move comes shortly after President Rodrigo Duterte ordered Vitaliano Aguirre II, the Justice Secretary, to conduct a complete investigation into the allegations of underpayment or nonpayment of taxes by small town lottery operators throughout the nation.

According to the justice secretary, the objective was to increase tax revenue after it was observed that during the previous administration the Philippine Charity Sweepstakes Office (PCSO) were being paid only 10 to 15 percent by STL operators. A special task force was set up to determine why the collection was so low. A team led by Executive Secretary of the Philippines Salvador Medialdea and Secretary of Finance Sonny Dominguez also held discussions with officials from the PCSO to identify how tax revenue from STL could be increased.

As per Aguirre II, the collections increased significantly in the first few months of STL operations when the Duterte administration took over. The new administration increased the minimum remittance via an IRR or implementing rules and regulations issued to STL operators.

The DOJ has also set up a special task force to investigate allegations that the government is potentially losing a trillion pesos in revenue due to misreporting by legal online gaming casinos in economic zones.