This Week in Asia

China holds the cards as online betting booms in the Philippines

The promises are irresistible to any young Chinese jobseeker: a work visa in the Philippines, with wages of up to 10,000 yuan (US$1,458) a month in the first year, rising to 14,000 yuan and 17,000 yuan in the second and third years.

Education and work experience is not required. There's free accommodation in an upscale condominium; five meals a day; and 15 days of annual leave with return flights provided. And don't worry about not speaking any English.

Welcome to the online gambling world of the Philippines. It's flush with hot cash courtesy of gamblers from China because gaming is illegal there except for state-run lotteries. In response to the sheer number of Chinese gamblers, online casinos in the Philippines have gone on a hiring spree for Chinese nationals to cater to their biggest group of customers.

"We can definitely get you a work visa," a Manila-based recruiter promised in a message on the Chinese messaging and social media app WeChat.

"Young man, you should make more money," the recruiter added.

The promised wages are indeed enticing. According to China's National Bureau of Statistics, the average wage of urban employees in the country's private sector was 45,761 yuan a year in 2017, or 3,813 yuan a month.

Staff in customer services work 12 hours a day, the recruiter said. She sent over photos of a swimming pool at the staff residence, a spacious bedroom with bunk beds, and an office with rows of desks and computers that resembled a call centre.

The Philippines is one of the few places in Asia that has legalised gambling. Photo: AP

"You don't need to understand English. There are [mostly] Chinese in the company, so you just need to be able to speak Mandarin," she said, adding that the company has about 1,000 employees.

Soon after Rodrigo Duterte became president in June 2016, he declared that "online gaming must stop". But by the end of the year, the Philippine Amusement and Gaming Corporation (Pagcor) began issuing a new licence called Philippine Offshore Gaming Operators (Pogo). Duterte later said it was better to tax online gaming companies than to fight them.

At present, there are 57 Pogos in the Philippines, one of the few places in Asia that has legalised gambling, other than Macau. Last year, online gambling revenue in the Philippines reportedly hit US$184 million, a 14 per cent increase from 2016.

When asked, the recruiter did not go into details of the jobs. But Chinese nationals are usually hired to be dealers on the live-streaming platforms on Pogo websites. Some are recruited to find potential customers by posting on Chinese social media platforms. Others are in customer service, helping Chinese gamblers with any problems they might have with the platforms. All of these are done within the confines of the office buildings.

The workers described the Pasig City building they worked at " home to numerous online gambling companies and guarded by security personnel with guns " as an "Oriental prison".

The prospective office awaiting future employees at an online gambling business in the Philippines. Photo: Handout

BEHIND THE FACADE

Four years ago, the company had 200 to 300 staff and occupied just one floor. Now it has about 600 staff, 70 per cent of whom are local.

"Our main target is China. That's why you can see all the brochures we have are all in Chinese," said Jeffrey Suck, Oriental Game's digital marketing supervisor, while he smoothed out a pamphlet. "The goal is, in 2020, we want to be No 1 in Asia."

More than 50 per cent of the company's business currently comes from mainland China, with the rest coming from Thailand, Vietnam, Cambodia, Taiwan, and domestically.

But while businesses such as Oriental Game are counting their profits, Filipinos are accusing the Chinese of stealing their jobs.

The influx of Chinese workers has driven up property prices and even prompted a Senate inquiry last month. Officials told the inquiry that about 50,000 of the 116,000 foreigners issued an alien employment permit (AEP) " a requirement for foreigners to work in the country " from 2015 to 2017 were Chinese.

Chinese nationals had been able to gain employment in the Philippines without having to apply for these AEPs, the officials said, by arriving on tourist visas and then applying for special work permits intended for short-term assignments.

About 119,000 of these special permits were issued from 2015 to 2017, mostly to Chinese working in the online gambling industry.

The problem with Chinese nationals placing bets on overseas gambling websites, even if the sites are licensed overseas, is that doing so still "cannot be legal" in China, said Li Xiaobing, associate professor of law at Nankai University in Tianjin.

Ben Lee, managing partner of the Macau-based gaming consultancy iGamix, also said such bets were illegal in mainland China.

Oriental Game's live-streaming platform, which allows gamblers to interact with dealers, has proved popular with punters. Photo: Tory Ho

"In fact, most if not all the traffic goes into China via Hong Kong so one can argue that the [telecommunications companies] in Hong Kong are aiding and abetting illegal gambling activities. Marketing is conducted through the triads with payments collected through the same channels," he said.

Registering an account on a gambling site and making a deposit into the account is as simple as a few mouse clicks.

In April last year, the Chinese embassy in Manila issued a statement warning Chinese nationals against working in the online gambling businesses. The embassy said these workers could be arrested when they returned to mainland China.

Suck from Oriental Game said the company had started a new live-streaming feature about four months ago. "You can chat with different MCs while playing the games. You can communicate with them, you can ask them to sing," he said.

On Oriental Game's live platform, gamblers can browse numerous gambling tables, choosing between Filipino or Chinese dealers hired for their attractiveness or ability to sing to keep gamblers entertained as they placed their bets.

"Marry me when it snows in the Philippines," one gambler wrote.

The dealer smiled at the camera and sent a message in reply: "I haven't heard that it snows in the Philippines."

The live streaming is conducted on site at the Ecoplaza building in Makati. Business has picked up by 20 per cent to 30 per cent this year from last year, Suck said.

"We are getting some good feedback about live streaming because most of the players do not want to get bored," he added.

The influx of Chinese workers has driven up property prices in places like Makati City. Photo: Shutterstock

Last month, Philippine police arrested 108 Chinese nationals allegedly involved in illegal online gambling over two raids.

After the arrest, and following Duterte's November meeting with Chinese President Xi Jinping in Manila, the Philippine leader said the crackdown against illegal Chinese workers should be conducted with caution.

"They should be deported. But in the same manner, you should be careful because when you point to the Chinese ... there are so many thousands of Filipinos working there or ... are inside China as tourists and working there," Duterte said.

According to Monique Cornelio Pronove, chief executive of Manila-based property consultancy firm Pronove Tai, 40 per cent of Makati's office space is now occupied by online gambling businesses. The figure is 48 per cent in Cebu, 38 per cent in Laguna province and 21 per cent in Cavite province.

She described Pogos as the industry's "unsung heroes", as they took up a lot of office space last year when there was a slowdown in demand from the information technology and business process management sectors.

The Pogos were so generous they did not bother negotiating rents with the landlord, Cornelio Pronove said, adding that a Pogo usually needs 2,000 to 15,000 square metres of office space. "When you open up your economy, you open it up to foreign investment. They have indeed been driving the rentals and capital values to high levels. It's good for the investors, the owner, it's not good for other occupiers," she added.

Lester Yupingkun, managing director of Strongbond Products Philippines, which provides structural repair and retrofitting services, said his company's gross revenue rose 33 per cent this year from 2017, mostly from projects that served the online gambling businesses.

"I believe the industry will continue to grow, based on the demand from China for gambling platforms to be made available to them. The only thing that could mitigate the growth of this industry altogether is if the Chinese government were to legalise all gambling operations in China," he said.

Observers are questioning how tolerant Philippines President Rodrigo Duterte will be towards the online gambling industry as he looks to forge closer ties with China. Photo: AP

As the Senate inquiry put the spotlight on the ways Chinese workers obtain work permits in the Philippines, the question now is how tolerant the Duterte administration will be towards the industry.

Professor Maria Ela Atienza, from the political science department at the University of the Philippines Diliman, said while the country was developing warmer relations with China, the debate on the influx of Chinese was likely to continue as midterm elections approached next year.

"Opposition candidates are already pushing territorial disputes and the influx of the Chinese as election issues, suggesting more diplomatic and assertive actions in cooperation with Asean and other allies, while administration candidates are trying to defend the stance of the president and his administration, saying that we cannot go to war with China," she said.

Some voters may be watching how the administration will navigate between trying to bring the Philippines and China closer, while at the same time assuring Filipinos they have priority in local job markets.

"Filipinos fear that Chinese workers might be stealing jobs from them when Filipinos themselves want jobs. This also violates Philippine labour law, which states that as long as there are qualified Filipinos applying for certain jobs, they should be hired," Atienza said. "This may lead to an increase in racist sentiments directed against the Chinese that can affect even relations among Filipinos."

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2018. South China Morning Post Publishers Ltd. All rights reserved.

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