(AsiaGameHub) –   Asia’s gambling industry is starting to feel the effects of Middle East tensions, as rising living costs and declining tourism have contributed to falling gambling revenues in the Philippines.

The Philippine Amusement and Gaming Corporation (PAGCOR) Chair and Chief Executive Officer Alejandro Tengco explained that the beginning of 2026 saw a challenging start due to ongoing conflict between the US, Israel, and Iran, which has increased inflationary pressures and reduced consumer spending power.

iGaming loses momentum in 2026

PAGCOR reported total revenue of P104.12bn (£1.26bn) for the first quarter of 2026, marking a decline of 15.87% compared to the same period in 2025. This drop was mainly driven by a 22.43% (£483.7m) year-over-year decrease in e-games revenue, which fell to P39.9bn.

The Philippines’ iGaming sector had previously been a major growth driver for the country, expanding by 30% in 2025 despite economic challenges faced by land-based gaming.

Tengco stated: “We attribute the first quarter dip to several factors, including softer discretionary spending amid geopolitical tensions in the Middle East, and rising inflationary pressures.”

In 2025, iGaming accounted for more than half of all gaming revenue, but this trend has not continued into 2026.

PAGCOR-licensed casinos made up 50.83% of total revenue in Q1, while e-games contributed 45.55%, with PAGCOR-operated casinos providing the remaining 3.62%.

A global effort to offset macroeconomic pressures

Tengco had earlier called for closer cooperation among global gambling regulators to address challenges brought on by the Middle East conflict, which has caused oil prices to surge amid ongoing supply disruptions.

“This is not a good time for everyone,” he said during the Manila After Dark conference in April. “Gaming jurisdictions worldwide are experiencing the impact of the oil crisis, and even progressive regions like Singapore, Macau, and the United States are not immune.”

“It’s essential that we unite, maintain these discussions, and support one another within the industry.”

Concerns about the impact on Asia’s gaming sector are expected to grow further after negotiations between the US and Iran appear to have stalled over the terms of a potential peace deal.

Despite uncertainty around the timeline for peace, Tengco expressed confidence in the future of the Philippines’ gaming industry.

“We remain hopeful that once geopolitical tensions ease, consumer confidence and discretionary spending will gradually recover, leading to improved industry performance,” he added.

This month, PAGCOR remitted P5.67bn to the government under the Dividends Law, which mandates that all government-controlled entities contribute at least half of their annual net earnings to the state.

Tengco noted that these ‘much-needed’ funds will enable the government to ‘alleviate the effects of the global oil crisis and pursue initiatives focused on meaningful economic and social transformation’.