More than 60% of licensed gaming system administrators (GSAs) in the Philippines were operating below the regulator’s minimum revenue benchmarks during the second quarter of 2026, according to data from Arden Consult International.
The shortfall comes as the Philippine Amusement and Gaming Corp. (PAGCOR) applies a new Minimum Guaranteed Fee (MGF) designed to ensure licensed operators maintain a required level of economic activity. The policy is increasing pressure on companies with weak or limited revenue, with some now considering additional capital, consolidation or an exit from the market.
According to Manila Bulletin, Marie Antonette “Tonet” Quiogue, founder and CEO of Arden Consult, said the firm’s operator-level data showed that more than 60% of licensed GSAs remained below the relevant revenue threshold based on second-quarter run rates.
The wider market has also weakened. PAGCOR reported domestic gross gaming revenue of ₱88.1 billion in the second quarter, compared with ₱110.6 billion a year earlier. The decline was linked primarily to weaker electronic gaming revenue.
Arden Consult estimated Philippine online GGR at approximately $1.19 billion during the first half of 2026, representing a 31% year-on-year decline.
Minimum Fees Increase Pressure on Operators
The first phase of the MGF came into effect on July 1 and will remain in place through the end of 2026.
Under the current framework, a GSA offering electronic casino games must pay whichever is higher between the percentage-based regulatory fee and a monthly MGF of ₱9 million. The fee corresponds to a minimum monthly GGR benchmark of ₱30 million.
GSAs without electronic casino games face a ₱3 million monthly minimum based on a ₱15 million revenue benchmark.
The thresholds will increase from January 1, 2027. For electronic casino operations, the revenue benchmark will rise to ₱35 million, with the MGF increasing to ₱10.5 million. Operators without electronic casino games will face a ₱20 million benchmark and a ₱4 million minimum fee.
Because the fixed fee remains payable when actual revenue falls below the applicable benchmark, maintaining an inactive or underperforming accreditation can become increasingly costly.
Quiogue described the policy as a mechanism that could encourage weaker companies to reassess their operations.
‘In practical terms, it is part of the regulator’s clean-up: weaker or non-operational holders must recapitalize, consolidate, pursue an approved transaction, or exit,’ Quiogue wrote.
She added: ‘The Philippine market is not becoming less relevant to foreign capital; it is becoming more selective about the capital it will accept.’
The current conditions have prompted distressed operators to seek rescue funding, potential mergers and other approved transactions. Arden said the pressure has also contributed to a rise in offers marketed to foreign investors as opportunities to acquire access to the Philippine online gaming sector.
Scarcity Pushes Accreditation Offers Higher
PAGCOR has kept new GSA applications in abeyance since March 2024. That restriction has reduced the avenues available to foreign companies seeking direct entry and has contributed to high asking prices for existing operators.
Arden reported that some existing accreditations have been marketed for between $3 million and $15 million.
Quiogue warned that investors should carefully distinguish between acquiring a company and purchasing a PAGCOR accreditation itself.
‘There is no such thing as buying a PAGCOR “license”,’ she wrote. ‘A Certificate of Accreditation for a GSA is a non-transferable privilege issued to a specific corporation or legal entity.’
Any transaction involving a change in ownership, beneficial ownership or control requires prior approval from the PAGCOR Board and a full probity review.
Arden also identified approaches involving dormant companies, website URLs and partnership structures in which a new party would finance and operate a business while existing shareholders remained its nominal owners.
Such structures could create regulatory concerns if they effectively transfer control without approval or attempt to bypass the application moratorium.
‘Do not structure first and disclose later,’ Quiogue wrote, adding that the ownership, control and operating arrangements presented to PAGCOR should match how the business will function in practice.
Investors Face Regulatory And Historical Risks
An acquisition can also expose investors to the existing operator’s regulatory and financial record. Arden highlighted potential liabilities involving unpaid PAGCOR fees, performance-deposit deductions, player balances, tax matters and anti-money laundering findings.
Unapproved brands and contracts with unaccredited service providers could also form part of an acquired company’s history.
The advisory firm therefore cautioned investors against treating an existing accreditation as a simple market-entry asset. The potential liabilities attached to an operator may affect the value of a transaction alongside the scarcity premium created by the application freeze.
‘The present scarcity is regulatory and may be temporary,’ Quiogue wrote.
Arden also warned prospective foreign investors about intermediaries claiming they can guarantee regulatory approval. Such arrangements can involve significant financial and legal exposure, particularly where brokers request facilitation payments or success fees linked to a promised outcome.
“Pagcor does not recognize arrangements with brokers or ‘fixers’ who purport to sell influence or guarantee an approval, and investors should treat such representations—particularly requests for facilitation payments or success fees tied to a supposedly guaranteed outcome—as serious red flags.”
The firm said foreign investors may find it safer to wait for clarity on the moratorium rather than use unauthorized structures. Attempts to circumvent the regulatory process could lead to license revocation, forfeiture of deposits and criminal prosecution under the Anti-Dummy Law.
PAGCOR has not stated when it may resume GSA applications. Arden said the possibility of reopening should remain part of investment assessments while the regulator evaluates existing operators and the impact of the new fee structure.