Tax hike is pushing players offshore, fast

H2 Gambling Capital published a report finding that onshore licensed operators lost an estimated 5% market share to offshore, unlicensed channels between 2019 and 2025. The report directly links this shift to tax increases on licensed operators. Although the H2 report focuses on the UK market, the mechanism it describes, where higher tax burdens on licensed operators widen the price and odds gap with unlicensed offshore sites, is directly applicable to the Philippine context, where GGR tax rates on onshore operators have been a recurring legislative target.

The Philippine offshore-to-onshore dynamic is already fragile. PAGCOR's licensed onshore operators compete against a grey and black market that faces zero compliance costs, no AML obligations, and no responsible gambling overhead. Every percentage point added to the GGR tax rate increases the cost differential between licensed and unlicensed play. Players respond to price signals, better odds, higher return-to-player percentages, and lower fees on unlicensed platforms are direct consequences of that cost gap.