Penalties for Operating Illegal Online Casinos in the Philippines

(All laws cited are in force as of 30 April 2025. Always verify whether later enactments or regulations have changed the figures or procedures.)

1. Why an “illegal online casino”?

An online casino becomes illegal once it accepts bets from players located in the Philippines without any of the following:

A licence or provisional authority issued by
- PAGCOR (Presidential Decree 1869 as amended by R.A. 9487); or
- CEZA, APECO or another economic-zone gaming regulator and a no-objection clearance from PAGCOR when the service reaches players outside the economic zone.
Registration with the Bureau of Internal Revenue (BIR) for gaming-tax and income-tax compliance.
Registration with the Anti-Money Laundering Council (AMLC) as a “covered person” under R.A. 9160, as amended by R.A. 10927.

Without all three, every spin, deal, or wager is an act of illegal gambling.

2. Core criminal statutes and their penalties

Statute	Offence	Basic penalty	Online aggravation (R.A. 10175 §6)
P.D. 1602 (stiffer penalties for illegal gambling)	“Maintaining, operating, financing or conducting any game of chance”	Prisión correccional, 4 yrs 2 mos & 1 day – 6 yrs and/or ₱1,000 - ₱6,000 fine. Recidivists: prisión mayor (8 - 10 yrs).	Penalty is one degree higher → prisión mayor (6 - 10 yrs) for a first offence; recidivists face reclusión temporal (12 - 20 yrs).
R.A. 9287 (numbers-game variant)*	Maintaining/financing small-scale numbers games	Graduated – up to 16 - 20 yrs imprisonment plus ₱3 - ₱5 M fine if gross bets ≥ ₱10 M.	One degree higher (e.g., 20-40 yrs if committed online).
R.A. 10175 (Cybercrime Prevention Act)	“Illegal gambling” performed through ICT	No stand-alone penalty; instead adds one degree to the underlying offence (see table).	—
R.A. 11590 (POGO tax law)	Failure to pay 5 % gaming tax, or 25 % withholding on alien employees	Closure + ₱500,000 fine and/or 6 mos imprisonment. Alien workers may be deported.	—
R.A. 9160/10927 (Anti-Money Laundering Act)	Failure to register, file CTRs/SARs, or implement AML controls	6 mos – 7 yrs & ₱100,000 – ₱3 M per transaction; daily administrative fines ₱10k – ₱500k; possible asset freeze & forfeiture.	—
NIRC 1997 (Tax Code)	Tax evasion, willful failure to file returns	2 – 4 yrs or 6 – 10 yrs + fine equal to taxes + 25 % surcharge + interest; BIR may padlock premises (Oplan Kandado).	—
R.P.C. Art. 315 (Estafa)	Defrauding bettors through rigged software or non-payment of winnings	Prisión correccional – reclusión temporal depending on amount defrauded.	One degree higher if via internet.

*Although R.A. 9287 targets “jueteng, masiao and similar numbers games,” jurisprudence treats online variants (e-sabong numbers draws, virtual masiao, etc.) as covered when played without licence.

3. PAGCOR & regulatory fines (administrative)

Violation	PAGCOR schedule of fines †	Ancillary sanctions
Operating without licence	₱300,000 per site per day (Memorandum Circ. 19-06, 2019)	Immediate cease-and-desist; IP black-holing; forfeiture of gaming equipment.
Gross gaming revenue understatement	5 % of under-declared GGR (minimum ₱500,000)	Suspension of e-certification; pag-test audit.
Failure to integrate with PAGCOR’s Casino Management System	₱50,000 per day of non-integration	Revocation after 30 days’ non-compliance.
Offering games to Filipino residents when authorised only as an offshore operator (POGO)	US $10,000 per day	Revocation of POGO certificate; deportation of responsible foreign directors.

†Schedules are periodically updated by PAGCOR Board Resolutions; verify the latest circular.

4. Immigration consequences

Foreign directors, key officers or employees of an illegal i-gaming site are subject to summary deportation under the Philippine Immigration Act (Commonwealth Act 613, §37) after completing any criminal sentence, or immediately upon arrest if the DOJ chooses to file only immigration charges. They are also black-listed from re-entry.

5. Money-laundering exposure

Casinos—whether land-based or online—became “covered persons” in 2017 (R.A. 10927). Unlicensed sites typically fail to:

register with AMLC;
file CTRs (≥ ₱5 M single transaction) and SARs;
conduct KYC or maintain a risk-based AML program.

Each lapse triggers administrative fines per transaction (₱10k – ₱500k) plus criminal liability up to 7 years. AMLC may freeze e-wallets, bank accounts and even domain names for 20 days ex parte (Sec. 10, A.M.L.A.) extendible by court order, crippling the operation even before trial.

6. Tax violations

Besides the special 5 % GGR tax under R.A. 11590, unlicensed operators incur:

Value-added tax (12 %) on service fees;
30 % corporate income tax (or 25 % under CREATE);
Expanded withholding taxes on suppliers and contractors;
Documentary stamp tax on wagers (₱0.01 per ₱200 bet).

The BIR may issue a 30-day closure order and confiscate assets. Willful failure is economic sabotage when the amount exceeds ₱10 M in a taxable year.

7. Civil liability to players

Victims may sue for restitution and actual, moral and exemplary damages under Art. 19, 20 & 21 of the Civil Code. Courts have awarded the return of deposits plus 6 % legal interest from demand, especially where the operator lured players through false odds or refused to honor payouts.

8. How prosecutions proceed

Surveillance & test bets by PAGCOR, NBI-Cybercrime Division, or PNP-ACG.
Search Warrant Application under Rule 126 and Sec. 15 of R.A. 10175 (cyber-specific warrants).
Seizure of servers, mobile phones, payment gateways (search warrant or Sec. 12 “plain-view” seizure).
In-quest or regular preliminary investigation before DOJ. Multiple informations may be filed (illegal gambling, AMLA, tax, estafa).
Asset freeze & forfeiture proceedings in the Regional Trial Court (A.M.L.A.) and Bureau of Customs (if smuggled gaming devices).

Conviction rates are higher when agencies coordinate charges so that plea-bargaining on one count (e.g., PD 1602) does not extinguish liability for money-laundering or tax.

9. Recent legislative and policy trends

Senate Bills 1281, 2689 & 2297 (2023-2024) seek to ban all POGOs and criminalise landlords who knowingly lease to unlicensed operators.
PAGCOR’s Gaming Licensing and Regulatory Manual 2024 raised minimum paid-up capital for online casino licencees to ₱200 M and introduced a “fit-and-proper” test for shareholders.
DOF proposal (2024) to make unpaid POGO taxes a ground for immediate arrest without warrant under the Tax Code’s “economic sabotage” clause.
Growing jurisprudence applying R.A. 8799 (Securities Regulation Code) to tokenised “casino chips” sold to the public without secondary-trading disclosure.

10. Compliance checklist to avoid the penalties

Pillar	Minimum Philippine requirement
Licensing	Secure a PAGCOR Online Gaming Licence (POGL) or POGO Certificate; post ₱100 M performance bond.
AML/KYC	Adopt a risk-based manual, appoint a Compliance Officer, integrate with PAGCOR & AMLC data feeds, submit CTRs/SARs electronically.
Tax	Register with BIR, file monthly electronic GGR statements, pay 5 % gaming tax within 20 days of following month, withhold and remit 25 % on all foreign staff salaries.
Technology	Host servers in a PAGCOR-approved colocation; route play logs to the PAGCOR Gaming Data Warehouse; allow on-demand third-party RNG audits.
Player protection	Self-exclusion program, 21+ age gate, responsible-gaming pop-ups every 60 minutes, maximum deposit limits, dispute-resolution desk.

Key take-aways

Operating an online casino without a Philippine licence is a multi-statute crime, not just “illegal gambling.” Expect stacked charges (PD 1602 + RA 10175 + RA 10927 + Tax Code).
The Cyber-crime Act automatically aggravates the jail term by one degree; a first-time operator can face 6 - 10 years even before money-laundering and tax-evasion counts.
Fines multiply daily—₱300 k/day (PAGCOR) plus AMLC administrative penalties plus BIR surcharges.
Foreign nationals risk summary deportation and blacklisting.
Because enforcement agencies now coordinate raids, pleading guilty to a single offence will not foreclose liability under the others.

Practical advice: If you intend to service Philippine-based players, secure a PAGCOR licence first. If you intend only offshore business, obtain a POGO/CEZA authority and geo-block the Philippines. Anything less exposes you to criminal arrest, asset freezes and potentially decades in prison.

(This article is for general information only and is not legal advice. Consult experienced Philippine counsel for a full compliance roadmap or representation.)