The situation in the online gaming or gambling industry continues to simmer. This week, the Bangko Sentral ng Pilipinas (BSP) ordered all electronic wallets, such as Maya and GCash, to remove in-app gambling assets, including links that lead direct users to gaming or gambling websites. This is just a suspension pending the finalization of BSP’s guidelines on online gaming payment services.

The BSP is only one of four regulatory hurdles that the online gaming industry is facing. The first is the executive branch via the Office of the President (OP) and the Philippine Amusement and Gaming Corporation (PAGCOR). The position of the President has mostly been clarified with the non-mention of gaming in the State of the Nation Address (SoNA) and the subsequent view that the issue needs to be further studied.

The Philippine Stock Exchange (PSE) being a self-regulating organization (SRO) was also a regulatory hurdle given the inclusion of a major online gaming company in the PSE Index. However, the risk has disappeared since the company was included in the PSEi. This was a good decision, in my view, considering that the inclusion was based on index construction rules.

With these developments, the only remaining regulatory risk area is Congress. Several senators have pushed for a total ban on online gaming since the issue broke a few months ago. With the SoNA silent on the issue, Congress is free to decide whether or not to prioritize regulations on online gaming.

Current hearings in the Senate suggest that, at least for one chamber of Congress, the issue is a priority. For investors interested in the outcome of the online gaming issue, this regulatory area is material for the short- to medium-term. Congress can still implement a ban, although legislating one will take longer than a direct policy from the direct regulator.

The most material information that increases the probability of robust regulation being crafted in Congress is the report that 32 million Filipinos are engaged in electronic gaming based on PAGCOR data as of July 2025. This figure is nearly four times the number at the end of 2024. This report was shared at the Senate hearing last week.

Given that the number of Filipino online gamers has been cited as an alarming number by the Senate, it is reasonable to assume that any policy or regulation to be developed would consider the size of the user base.

The online gaming issue is complex because it involves trade-offs at both the macro and the policy levels.

The goal of policy, however, is to optimize welfare, which basically means that it is limited not only to economic benefits but also to the overall well-being of society.

Given this, it is reasonable to assume that the government will choose to regulate and apply some form of police power that ultimately will determine the growth path of the industry.

Regardless, the issue is a lesson in factoring in environment, social, and governance risks when evaluating an industry. In this case, this would fall under S or social risk. Industries need to view their customers not only as markets but also as the communities that they serve.

Recognizing both the potential benefit and the harm to communities will greatly influence the alignment of interests with long-term investors. If regulators can see this move to align, we may actually see an amicable resolution to the online gaming welfare puzzle.

Disclaimer: The views and opinions expressed in this document are solely my own and do not necessarily reflect those of related parties. Any content provided is my own personal opinion and should not be interpreted as representing the views, strategies, or opinions of my related parties.