Weighing in on the effects of regulating e-sabong in PHL

Quarantine restrictions on traditional cockfighting have forced people to shift to “e-sabong” or online cockfighting. This influx of online players and operators led the Philippine Amusement and Gaming Corporation (PAGCOR) to impose stringent regulations against violators such as scammers and illegal overseas bettors and streamers. Meanwhile, debates have been raised regarding the economic and social implications of the online betting game in the country, as the House of Representatives granted a 25-year franchise to e-sabong operator Lucky 8 Star Quest Inc. 

Alongside the fast-paced transition of the cockfighting industry’s setup, gambling addiction and mental health problems were some of the concerns that are being voiced out by those against the legalization of the game’s online counterpart.

E-sabong, explained

Cockfighting or sabong is a game wherein two roosters fight in a closed space as spectators bet between the “llamado”—the rooster with more bets—and “dehado” or the underdog. Bettors have certain qualifications, like the rooster’s breed and stature, in choosing which one to bet on. Afterward, the bet collector will determine which will be the llamado and dehado based on the number of bets.

Sabong eventually found its way to the virtual environment as online gambling took off in the country. E-sabong is slightly different from traditional sabong mechanics, however, as bettors wager on live cockfighting matches, events, and activities through online or remote means. This is with the aid of operators that bridge the bettors and cockpits with agents that wire the bettors’ wins through virtual wallets.

The move to regulate e-sabong was first considered in 2018 by Congress when Abra Lone District Representative and incumbent Chairperson on the House Committee on Games and Amusements Joseph Bernos passed House Bill No. 6983 that intends to amend the 1974 Cockfighting Act, so that the Games and Amusement Board (GAB) could regulate online cockfighting. Despite early backlash, the 18th Congress is vigorously pushing for its development at present.

As the pandemic doomed gambling establishments and exhausted government funds, the clamor and efforts to catalyze the growth of the gambling game have doubled. The still ongoing health crisis has led to a sharp decline in PAGCOR’s net profits, dipping from P80 billion in 2019 to less than P30 billion in 2020. As such, the agency resorted to collecting revenues from off-site gambling, including e-sabong.

Accordingly, PAGCOR projects an estimated e-sabong revenue amounting to P7.2 billion in 2022. Half of their total earnings, in turn, will be used by the national government to fund its numerous socio-civic and national development programs. For instance, 50 percent of the national government’s share of PAGCOR’s total income is remitted to PhilHealth’s Universal Health Care program.

Moreover, PAGCOR Chairman and CEO Andrea Domingo notes that the local gaming industry contributes directly to the national economy by offering employment opportunities to about 132,000 Filipinos.

As of January 20, there are seven licensed e-sabong operators and 24 registered websites. In relation, as of December 7 of last year, there are seven licensed cockpit locations and three registered websites from two e-sabong auxiliary operating companies. 

A risky fix

At present, PAGCOR’s current regulatory framework sets a three or 10-year license validity to registered companies. This framework also provides an extension option of three or 10 more years, which “widens business prerogatives” for those in the e-sabong industry. They also affirmed that it is an “economic incentive in return for their continued and long-term commitment to comply with the stringent regulations formulated.”

However, last September 2021, the Congress made an uncharacteristic move of pushing for 25-year licenses to e-sabong companies when they granted Lucky 8 Star Quest Inc. a franchise to operate off-site betting stations anywhere in the country. This raised debates on the possible implications of e-sabong.

Online cockfighting, for example, received criticism from opposition groups and lawmakers, including Taguig-Pateros Rep. Alan Peter Cayetano, who called the move as something that “destroys the moral fiber of our society.” Presidential aspirant Sen. Ping Lacson has also been vocally hesitant in supporting e-sabong, repeatedly citing that “social costs” must first be assessed since the tax revenue that could be generated only is a secondary benefit. 

But PAGCOR clarifies that they are currently studying the feasibility of imposing betting limits on players, as well as a requirement for e-sabong operators to install account banning or exclusion mechanisms. They further stressed that current gaming standards prescribe that bettors cannot play on credit for security purposes. 

Bird’s-eye view

An alarming number of online cockfighting-related suicide cases were raised in a Senate Public Services public hearing last December 9. It was revealed during the hearing that a bettor took their own life due to their incapability of living through the consequences of the game, particularly incurring heavy losses and debt. Citing this problem, among others, led e-sabong opposers to believe that the increased accessibility of gambling stimulated by the sudden 25-year grants may jeopardize the well-being and overall state of society in an attempt to boost the economy. 

But with curiosity and the alluring idea of extra income, first-time players Niño*, Charmaine*, and Miggy* decided to start betting at the height of the pandemic, learning how to play the game through their friends and online sleuthing. On good days, Niño wins as much as P4,000, while Charmaine earns an average of P1,500 per game, which happens occasionally. 

But not all days are lucky. Niño says that he lost as much as P6,000 in one game while Charmaine shares that she can lose an average of P700 per log-in. On the contrary, as an undergraduate student, e-sabong and sports betting only added to Miggy’s* expenses, losing up to P1,500 in just four days and only gaining P200 a day after.

All four agree that e-sabong operators should be given 25-year licenses as it protects both operators and players and would be beneficial for economic growth of the country and offers more employment opportunities in the future. Miggy justifies that online cockfighting is “the same as five-star casinos.”

“If they are not violating [any] laws, then renewal of licenses should not be a problem,” Niño said.

In a public address last June 2020, Domingo stated that e-sabong, along with the local gaming industry, would stimulate the economy as soon as gaming stations and casinos reopen. Prior to this, the industry directly employed around 132,000 hires.

However, for those like Luis* who betted in traditional cockfighting pre-pandemic, betting in online cockfighting may be unreliable because it is more susceptible to scamming than its traditional counterpart. He also shares the sentiments of e-sabong opposers that betting may be addictive and may bring any player into certain financial ruin.

But for their part, PAGCOR discloses that they are currently coordinating with several government agencies—including the Philippine National Police, National Bureau of Investigation, and the Department of Information and Communications Technology—to combat online scams and unauthorized online gambling activities.

With the onset of the pandemic and the national revenues generated by off-site betting, it seems that e-sabong is here to stay. However, due care must be exercised by lawmakers before granting 25-year franchises to a number of e-sabong operators to ensure that the financial benefits of this endeavor would outweigh its social costs. Similarly, concerned government units must ensure that e-sabong operators constantly adhere to the regulatory guidelines set by PAGCOR. After all, online games—especially online cockfighting—should only be considered “as a form of entertainment and not as a primary way to make money.”

*Names with asterisks (*) are pseudonyms.