International gambling consultant Martin Purbrick recently warned that setting online gambling taxes at 25% to 30% of Gross Gaming Revenue (GGR) places the economy on a risky precipice.

The "Laffer Curve" Warning Behind High Taxes

Economic logic suggests that higher taxes do not always yield higher revenue. According to the Laffer Curve, when tax rates cross a critical threshold, players "vote with their feet." Gambling is highly price-sensitive; high taxes are ultimately passed to players through lower odds, driving them toward illegal platforms with better returns or forcing legitimate operators out of the market due to squeezed margins.

Unintended Risks Under the Guise of Protection

Policy-makers often assume high taxes deter gambling. In reality, they push players toward dangerous, unregulated markets. These underground platforms lack KYC checks, Anti-Money Laundering (AML) protocols, and responsible gaming interventions. While treasury coffers may seem to grow, an uncontrollable black market expands in the shadows, defeating the purpose of consumer protection.

The Philippine Regulatory Balancing Act

Transitioning from the total ban of POGOs to the PIGO framework, the Philippines is moving from a "regulatory laboratory" toward a high-tax model. Research indicates that black markets explode exponentially when GGR tax rates exceed 25%-30%. The ideal range suggested by experts is 10%-20%, a stark contrast to current Philippine policy.

Summary: Maximizing Tax Revenue ≠ A Healthy Market

When policy shifts from "regulating a market" to "extracting from it," the eventual cost is a loss of control and regulatory failure. Short-term fiscal gains should not come at the expense of long-term market health and public trust.