Tengco Points to Gaming BPOs as PAGCOR's Next Revenue Source. Here's What That Means for B2B Suppliers.

Signal Spotlight · Philippine gaming regulation, B2B services and PAGCOR revenue

What happened

In an interview with BusinessMirror, PAGCOR Chairman Alejandro Tengco was asked what could become another source of revenue for the regulator. He pointed to business process outsourcing for gaming operators. "I think that will be a strong revenue generator," he said. "I think that will be the next-generation source of revenue." BusinessMirror reports that more than a hundred Special Class BPO (SCBPO) firms are applying for business-to-business licenses from PAGCOR. Applicants are categorized by business feature and charged annual fees, and Tengco expects SCBPOs to contribute about ₱2.5 billion to ₱3 billion in revenue to PAGCOR this year. Jessa Mariz Fernandez, PAGCOR's assistant vice president for remote operations and ancillary services, said SCBPOs can become revenue drivers. Tonet Quiogue of Arden Consult is also quoted, saying that beyond license fees, the jobs and purchasing power SCBPOs provide are important.

The context is falling PAGCOR income. BusinessMirror notes the regulator's revenues are declining because of weak gaming activity and higher mandated contributions to the national government. According to iGaming Business, PAGCOR's 2025 revenue fell with the loss of POGO license fees and shrinking land-based revenue, and Tengco has said it could fall again in 2026.

What an SCBPO is

SCBPO stands for Special Class Business Process Outsourcing, and these firms are not player-facing venues. Under PAGCOR's regulations, an SCBPO services legitimately licensed gaming operators abroad and does not handle betting. It does product marketing and customer relations, and it cannot service PAGCOR offshore licensees. Tengco described them in February 2025 as the same as regular BPOs, except that they support the operations of legitimate gaming companies overseas with human resources, marketing, graphic design, accounting, and other back-office work. The sector employed close to 5,000 Filipinos at the time. PAGCOR's amended regulations also allow an SCBPO to service multiple licensed operators abroad, up to a maximum of five. PAGCOR has repeatedly distinguished SCBPOs from banned POGOs.

A practical example: Pronet Gaming became the first internationally licensed B2B company in the industry to set up an SCBPO-accredited operation in the Philippines, through Claymore Solutions, which provides employer-of-record services and serviced office space. The setup lets a company operate locally without handling bets or payments.

Why it matters

The signal is about PAGCOR's revenue mix. With POGO license fees gone and land-based revenue under pressure, the regulator is pointing at a B2B services segment that sits inside its existing perimeter and brings in annual fees. That fits the wider push this year to widen oversight to B2B providers and Special Class BPOs, which PAGCOR's Fernandez described at the CiG iDEA Summit alongside GSA transition guidelines, cashback rules, and tighter KYC.

The scale is worth keeping in view. This is our comparison, not PAGCOR's: ₱2.5 billion to ₱3 billion is small next to online gaming license fees, which PAGCOR reported at ₱69 billion in the first seven months of 2025. SCBPOs are a growth line, not a replacement for the revenue lost with POGOs.

The segment is also not a competitor to domestic operators. SCBPOs serve gaming companies abroad and do not take bets, so they do not draw from the same player pool as casinos or licensed online platforms. The relevance is to B2B suppliers, to international operators weighing a compliant Manila hub, and to any licensed business that outsources marketing or customer service.