The latest corruption allegations have come at an extremely unfortunate time for PAGCOR Chairman and CEO Alejandro Tengco, as the organisation seeks to stabilise the Philippines’ regulatory framework ahead of 2026.
The accusations, centred on an alleged conflict of interest involving Tengco’s family company, emerged at a time when the regulator is trying to keep the country’s gambling regulatory system on course ahead of 2026. Tengco has firmly rejected any suggestions that he influenced the awarding of government contracts to his family’s construction firm, Nationstar Development Corporation.
However, media investigations have revealed that Nationstar, founded by Tengco in 2015 and now owned by his children, has secured more than 14 government contracts worth Php 7.1bn (around £90m) since 2022, when he took up his role at PAGCOR.
Tengco stressed that he divested his stake in the construction company upon assuming leadership of the Philippine gaming regulator, having begun transferring ownership to his children as early as 2019.
“My position as Chairman and CEO of PAGCOR has no direct or indirect influence in the awarding of public works contracts to Nationstar,” said Tengco through a statement posted on PAGCOR’s website.
“There is no conflict of interest because under the Anti-Graft and Corrupt Practices Act (RA 3019) and the Code of Conduct of Government Employees (RA 6713), conflict of interest occurs when a public official has direct or indirect financial or pecuniary interest in any business contract or transaction in which they must intervene in their official capacity.”
This story caps a challenging year for the Philippine gambling industry, during which lawmakers repeatedly sought to restrict or completely ban regulated online gambling. The Senate is currently still considering several bills calling for a total ban on online gaming, citing the “silent epidemic” of gambling addiction in the Philippines.
PAGCOR has been forced to defend the rationale for supporting the regulated sector, highlighting the significant revenues the industry generates for the state. The organisation has also warned that any ban would “only drive players to illegal operators and result in the loss of revenue and jobs.”
“PAGCOR is committed to strengthening regulation and enforcement to ensure that only legitimate and properly monitored operators are allowed to operate,” said Tengco, speaking at a conference hosted by Light & Wonder.
“These illegal sites not only deprive the government of much-needed revenues but also expose Filipino players to numerous risks.”
Among the new regulatory measures are the mandatory delinking of online gambling platforms from mobile wallets and payment applications, as well as new accreditation requirements for iGaming service providers.
While the former was linked to a decline in revenue for leading operators such as DigiPlus in the third quarter of the year, these changes have been widely viewed as a vital step towards restoring trust in the industry.
“The delinking of e-wallets resulted in a short-term decline in activity toward the latter part of the quarter. However, these measures are vital to protect players and ensure secure, transparent transactions,” said Tengco.
Looking ahead to 2026, the fact that the above-mentioned bills were submitted as early as July and have yet to progress suggests that momentum behind efforts to ban online gambling has weakened. However, any rumours of impropriety within the sector risk reigniting debate about its role in Philippine society.
The coming months will be critical for PAGCOR as it seeks to stabilise and drive growth in an industry that is viewed as having the potential to become Southeast Asia’s second-largest gambling market after Macau, with projected revenues exceeding US$7bn in 2025.
In October, PAGCOR signed a memorandum of understanding allocating Php 50m (£639,125) to the National Bureau of Investigation (NBI), which is responsible for combating illegal gambling. According to PAGCOR, around 12,000 illegal sites are currently operating in the country, compared with just 77 licensed operators.
While tighter regulation may be seen by licensed operators as an additional burden, in the long term such measures are essential to clearly distinguish the legal market from the illegal one and should help build consumer confidence.
Keith McDonnell, Director of the KMI Group, previously told iGaming Expert: “What the Philippines needs most now is time to carefully consider how a regulatory framework and workable tax system can provide long-term benefits to the local economy while protecting the most vulnerable.
“Everyone knows an outright ban on [inland gaming operators] would drive things underground, leading to more social, economic and political problems.”
A knee-jerk reaction from any stakeholder could undermine the sector, and PAGCOR must lead the industry’s future with a cool head.
Don’t forget to subscribe to our Telegram channel!
