All You Need to Know About AFAB Gaming-License Issuance in the Philippines (A practitioner-oriented overview, updated to 15 July 2025)

1. Origins of AFAB’s Gaming Mandate

The Authority of the Freeport Area of Bataan (AFAB) was created by Republic Act No. 9728 (2009), converting the former Bataan Economic Zone into the Freeport Area of Bataan (FAB). Section 13 of the Act grants AFAB “internal customs, immigration, and licensing powers” within the freeport, including authority to regulate games of chance and to issue online-gaming licences as a revenue-generating activity meant to attract foreign investors and jobs to Mariveles, Bataan.

While PAGCOR remains the primary national gaming regulator, Congress deliberately modelled Section 13 on the special-economic-zone statutes of CEZA (Cagayan) and SBMA (Subic), both of which already ran separate interactive-gaming regimes. AFAB’s mandate therefore sits alongside—but not subordinate to—PAGCOR, subject only to:

the Constitution’s ban on games of chance without legislative franchise;
DOJ and Office of the President opinions requiring inter-agency coordination when gaming effects are felt outside the zone; and
general laws of nationwide application (tax, AML, data privacy, etc.).

2. Core Legal Instruments

Instrument	Key Points	Date
RA 9728 + Implementing Rules	Creates AFAB; empowers it to “regulate and license” gaming inside the freeport and through “internet channels”	2009–2010
AFAB Interactive Gaming Rules (IGR)	Establishes licence classes, technical standards, probity checks, fees; first issued 2019, overhauled 2021 & 2024
AFAB–PAGCOR Memorandum of Agreement	Lays out information-sharing & revenue-sharing when wagers originate from outside FAB	17 Sept 2020
RA 11590 (POGO Tax Law)	Imposes 5 % gaming-revenue tax plus withholding taxes on offshore gaming licensees of PAGCOR or any freeport, thus covering AFAB operators	22 Sept 2021
RA 11521 (AMLA 2021 amendments)	Brings “service providers of offshore gaming operators” into the AML framework; AFAB obliged to transmit suspicious-transaction reports to AMLC	27 Jan 2021
BIR RR No. 20-2021 & 13-2022	Implement RA 11590; set filing forms FAB-0100, payment timelines, and segregation of gaming vs. non-gaming income	2021–2022

3. Scope of Licensable Activities

AFAB’s 2024 “Comprehensive Gaming Licensing & Regulatory Framework (CGLRF)” now recognises five main licence categories:

Interactive Gaming Operator (IGO) – remote casino, sportsbook, RNG games, live-dealer, bingo, peer-to-peer card rooms.
Sports-Betting Operator – specifically fixed-odds sports & esports.
E-Casino Service Provider (ECSP) – platform & content suppliers to IGOs (no direct player exposure).
Ancillary or Support Service Provider – back-office, call-centre, payment facilitation, streaming studios.
Testing & Certification Laboratory – compliance testing for game fairness, RNG, cybersecurity.

Licences may be on-shore (serving players physically inside FAB), near-shore (Philippine players outside the zone) or off-shore (foreign-facing). Near-shore operations require PAGCOR concurrence; off-shore operations trigger the 5 % POGO tax under RA 11590.

4. Application & Due-Diligence Process

Step	Requirements	Timeline*
Letter of Intent → Provisional Certificate	• Freeport Enterprise Registration • US $50,000 application fee (refundable if denied minus admin costs) • Business plan, three-year financials, software architecture	10–15 working days
Probity & Fitness Tests	• UBO disclosure down to natural persons (≥5 % equity) • National & international criminal-record checks via Interpol & AMLC • Evidence of at least US $200,000 paid-up capital (IGO)	30–45 working days
Systems Audit & Sandbox Testing	• Independent lab report (ISO/IEC 17025 or AFAB-accredited) • Geolocation & age-verification controls • RNG & payout-ratio tests	15–30 working days
Financial Security & Licence Fees	• Bank guarantee or escrow: US $250,000 (IGO) / US $100,000 (ECSP) • Annual licence fee: US $150,000 (IGO) + US $10,000 per game vertical	Upon approval
Final Licence & Go-Live	• Posting of Responsible Gaming notices • Data-privacy compliance certificate • Integration with AFAB’s real-time GGR monitoring API	within 12 months of LOI

*Indicative; delays common for enhanced-due-diligence cases or incomplete submissions.

5. Ongoing Compliance Obligations

Gaming-Revenue Share
- 2 % of Gross Gaming Revenue (GGR) remitted monthly to AFAB.
- Additional 5 % GGR to BIR under RA 11590 (off-shore/near-shore only).
Taxes & Incentives
- 5 % Gross Income Earned (GIE) tax in lieu of all national taxes on non-gaming income (standard freeport incentive).
- Employees enjoy 5 % personal income tax within FAB.
AML / KYC
- Customer identification for wagers ≥ PHP 5,000 or equivalent.
- Transaction-monitoring thresholds: single or aggregated PHP 100,000 within 24 h triggers CTR; suspicious-transaction reports filed within 5 calendar days.
Responsible Gaming
- Self-exclusion programme interoperable with PAGCOR master list.
- Mandatory “pop-up” loss/frequency prompts every 60 minutes of play and at 50 % of declared daily limits.
Technical & Cybersecurity
- Quarterly vulnerability scans; annual penetration tests.
- All player data must be hosted on-premise or in a DICT-certified localisation facility within the Philippines; off-shore mirroring allowed only for redundancy with AFAB approval.
Regulatory Reporting
- Daily GGR feed via sFTP/REST; unauthorised downtime > 30 min reportable.
- Audited financial statements—IFRS or PFRS—due 120 days after fiscal year-end.
Renewal & Variation
- Three-year licence term; renewal application no later than 90 days pre-expiry, with reduced probity checks unless material change in ownership.
- Variation (new game, new brand, B2B supply) requires ₱ 250,000 filing fee and separate sandbox test.

6. Interaction with Other Regulators

Regulator	Interface Point with AFAB Licensees
PAGCOR	Concurrence for near-shore markets; mutual recognition of self-exclusion; shared blacklists
BIR	5 % GGR tax under RA 11590; 25 % withholding on alien employees’ gross income
AMLC	Registration on goAML portal; STR/CTR filing
National Privacy Commission	DPIA submission; data-breach notification within 72 h
DICT / CICTC	Philippine-based cloud/server accreditation; cybersecurity audits
LGU Mariveles & Bataan Province	Building permits, environment compliance certificates for studio facilities

7. Jurisprudence & Administrative Opinions

DOJ Opinion No. 97 (2017) – PAGCOR may not absolutely bar freeport authorities from issuing interactive-gaming licences, but wagers accepted from outside a zone implicate national jurisdiction and therefore require PAGCOR coordination.
COA Decision (2022-018) – affirmed that AFAB’s share of GGR constitutes “proprietary revenue,” exempt from automatic remittance to the National Treasury, aligning with CEZA precedent.
Senate Blue-Ribbon Hearings on POGOs (2022–2023) – highlighted AML/terror-financing risks; AFAB testified it had suspended 28 licences and tripled on-site audits. Recommendations led to the 2024 CGLRF tightening capital thresholds and geolocation rules.

No Supreme Court case has yet squarely tested AFAB’s gaming authority; litigants generally resolve overlap disputes via the Office of the President or inter-agency MOAs.

8. Policy Debates & 2024–2025 Developments

POGO Moratorium Calls. A House Bill filed 15 Jan 2024 sought a two-year moratorium on new off-shore gaming licences across all regulators. As of July 2025, the bill remains at committee level; AFAB continues to process applications but now caps off-shore seats to 20,000.
Higher Labour Standards. DOLE-AFAB Joint Circular No. 1-2024 imposed minimum accommodation and language-training rules for Chinese and Vietnamese workers after multiple trafficking prosecutions in 2023.
Digital Peso Pilots. The Bangko Sentral ng Pilipinas (BSP) approved AFAB’s sandbox for whitelisted e-wallets using Project Agila CBDC—first deployment in the Philippine gaming sector, scheduled Q4 2025.
Green Data-Centre Incentives. A January 2025 Board Resolution grants up to 10-year income-tax holiday for licensees using ≥ 50 % renewable energy for server farms, supporting Bataan’s offshore-wind corridor.

9. Comparison with Other Philippine Gaming Regimes

Feature	AFAB	CEZA	PAGCOR (POGO)
Enabling Law	RA 9728	RA 7922	PD 1869, RA 9487
Territorial Focus	Freeport Area of Bataan	Cagayan Freeport	Nationwide
Primary Tax on GGR	2 % (AFAB) + 5 % (RA 11590)	2 % (CEZA) + 5 % (RA 11590)	5 % (RA 11590) + 2 % PFF*
Licence Fees (IGO)	US $150 k / yr	US $200 k / yr	US $200 k / yr
Capital Requirement	US $200 k	US $250 k	US $500 k
Near-Shore Play	Allowed with PAGCOR concurrence	Same	N/A (PAGCOR native)

*PAGCOR Processing & Regulatory Fee equivalent to 2 % of GGR.

10. Practical Tips for Applicants

Location Matters. Physical presence—whether a server rack or a 50-seat back-office—inside FAB is non-negotiable for incentives. Lease rates in Mariveles TechnoPark average ₱ 12–₱ 15/m², lower than Metro Manila.
Dual Licensing Strategy. Many operators secure both AFAB and PAGCOR “POGO” licences to hedge policy risks; however, duplication of AML and tax filings can offset savings.
Language Mix. Chinese-facing studios now account for < 40 % of new AFAB licensees; Vietnamese, Thai, and Japanese desks are growing fastest post-pandemic.
Plan for On-Site Inspections. AFAB’s Gaming & Licensing Department conducts at least two unannounced audits per year—budget for a dedicated compliance manager in Bataan.
Monitor Legislative Track. Any overhaul of the national Interactive Gaming Bill (re-filed March 2025) may consolidate all freeport gaming under a single “Philippine Online Gaming Commission (POGC).” Early movers with strong compliance histories are likely to receive grandfathering protection.

11. Conclusion

AFAB’s gaming-licence programme has evolved from a small freeport experiment into a sophisticated regime balancing investment incentives with tightening national oversight. For operators, it offers (i) fiscal perks of a special economic zone, (ii) moderate licence fees, and (iii) flexibility to serve both overseas and selected Philippine markets—provided they navigate the inter-agency web of PAGCOR, BIR, AMLC, and emerging legislative reforms. For counsel, staying current on the 2024 CGLRF, RA 11590 tax-compliance rulings, and impending “POGC” debates is critical to advising clients through 2025 and beyond.

This overview is for informational purposes only and does not constitute legal advice.