PAGCOR Chair Issues Warning on 2026 Gross Gaming Revenue Decline Tied to Regional Conflicts

Alejandro Tengco, chair of the Philippine Amusement and Gaming Corp, delivered a direct forecast during recent industry briefings that gross gaming revenue across the country could fall by as much as 19 percent in 2026, and he linked that potential drop to rising cost pressures generated by ongoing tensions in the Middle East.

The statement places the Philippine casino sector under renewed scrutiny because operators already navigate tight margins while they expand integrated resorts and online platforms, yet Tengco emphasized that external geopolitical factors now threaten to compound those existing strains.

Context Behind the Revenue Projection

Philippine gaming regulators track gross gaming revenue as the total amount wagered minus player winnings, and this metric serves as the primary indicator of sector health for both land-based casinos and emerging digital offerings. Tengco’s projection arrives at a moment when the industry continues its post-pandemic recovery trajectory, although observers note that fuel and supply-chain expenses have climbed steadily since the escalation of conflicts in the Middle East earlier this decade.

Those cost increases affect everything from transportation of gaming equipment to daily operational logistics at major resorts in Entertainment City and Clark, which means operators may face higher overhead even before revenue figures are tallied. Tengco framed the 19 percent figure as an upper-bound scenario rather than a baseline expectation, yet he urged stakeholders to prepare contingency plans because prolonged instability could push actual results toward that ceiling.

Operational Pressures Facing Philippine Operators

Integrated resort developers have invested billions in new properties that opened between 2023 and 2025, and many of those projects still carry substantial debt service obligations that become harder to meet if revenue contracts sharply. Rising energy prices tied to Middle East supply concerns directly inflate electricity and cooling costs inside large casino floors, while shipping delays for imported gaming machines and replacement parts add further friction to maintenance schedules.

Smaller licensed operators, particularly those running electronic gaming stations in provincial areas, often lack the scale to absorb sudden spikes in input costs, which leaves them vulnerable to margin compression should the forecasted decline materialize. Tengco highlighted that PAGCOR continues to monitor monthly revenue reports closely, and the agency plans to adjust licensing fees or tax schedules if data collected through mid-2026 shows consistent downward trends.

Broader Sector Implications

The warning arrives ahead of the June 2026 reporting cycle, when PAGCOR will release its first-half performance data and allow analysts to compare actual results against earlier optimistic projections. Industry consultants who track Southeast Asian gaming markets have already begun modeling scenarios that incorporate higher oil benchmarks, and those models indicate that a sustained 15-to-19 percent revenue dip could delay several planned expansions announced by major concessionaires.

Employment figures within the sector, which currently exceed 150,000 direct positions nationwide, may also face pressure if operators respond to lower revenue by trimming shifts or deferring new hires. Tengco noted during his remarks that PAGCOR maintains open channels with both operators and government fiscal planners, because any significant shortfall in gaming taxes would affect national budget allocations that support infrastructure and social programs.

Online gaming platforms licensed by PAGCOR face a somewhat different cost profile, since they rely more heavily on digital infrastructure and payment processors rather than physical venues, yet they still encounter elevated transaction fees when regional banking systems experience volatility linked to geopolitical events. Tengco’s forecast therefore encompasses both traditional and digital segments, underscoring that the entire licensed ecosystem shares exposure to these external variables.

Regulatory Response and Industry Preparation

PAGCOR has scheduled follow-up consultations with concession holders throughout the remainder of 2025 to review cost-mitigation strategies, including bulk procurement arrangements for fuel and equipment that could offset some of the projected increases. Tengco stressed that the agency will continue to enforce existing responsible-gaming measures even while operators seek efficiencies, because any revenue downturn must not translate into relaxed oversight of player protections.

Foreign investors who hold stakes in Philippine gaming projects have begun requesting updated risk assessments that factor in Tengco’s 19 percent scenario, and several have indicated they may pause additional capital commitments until clearer data emerges from the first quarter of 2026. This cautious stance reflects the broader pattern observed across other Asian gaming jurisdictions that have faced similar external shocks in recent years.

Conclusion

Tengco’s warning crystallizes the intersection between geopolitical developments and domestic gaming economics in a single, quantifiable projection that regulators and operators alike must now address. The 19 percent potential decline in 2026 gross gaming revenue stands as a concrete benchmark against which future performance will be measured, and the Philippine sector’s ability to navigate those pressures will depend on coordinated responses developed in the months ahead. Data collected through the June 2026 reporting window will determine whether the forecast remains an upper-bound estimate or becomes a realized outcome that reshapes investment and operational strategies across the industry.