Press Release
February 2, 2017


The tricky issue of who really regulates the country's online gaming sector is depriving the government of its rightful revenue share, Senator Chiz Escudero said.

"We need to address this issue with finality so we can finally plug the loopholes in foregone revenues from offshore gaming and put to rest the issue of the legality or illegality of its operation in the country" Escudero said at the regular Kapihan sa Senado today.

Currently, the Philippine Amusement and Gaming Corporation (PAGCOR) is asserting authority over online gambling in the country with emphasis, based on a statement it issued that all online licensing "fall within the bound of its charter to operate, authorize and license games of chance, games of cards and games of numbers in the Philippines."

The senator, who chairs the Senate Committee on Banks, Financial Institutions and Currencies, sees the position of PAGCOR as "a question of correct interpretation of the law" that needs to be clarified and decided on with finality.

"When PAGCOR was created under Presidential Decree No. 1602, the concept of gaming in its charter is territorial and land-based; internet was nowhere near the grasp of anyone yet at that time. Only during the framing of CEZA (Cagayan Economic Zone Authority) and APECO (Aurora Pacific Economic Zone and Freeport Authority) was online gaming specifically included in their charters."

Escudero added that PAGCOR's basis for issuing licenses to online gaming operators was anchored on the authority granted to CEZA and APECO.

"There are approximately 200 online operators in the country. Most of them registered in CEZA, some of them in APECO. They expanded this and gave out another 35 licenses and each can accommodate 10 sublicenses. I asked PAGCOR for the list, both for the licensees and the list of regulations. And also their basis on how to regulate these operators," he said.

PAGCOR officials said applicants must pay US$50,000 in application and processing fees for e-casino and US$40,000 for sports betting. They must pay another US$200,000 for an e-casino license and US$150,000 for a sports betting license upon approval by PAGCOR.

Noting that there are already pending cases filed with the Supreme Court questioning the authority of PAGCOR, Escudero wants to know what will happen to these fees once the High Court decides against PAGCOR.

"During the Senate hearing on the alleged bribery at the BID (Bureau of Immigration and Deportation) involving casino tycoon Jack Lam, I asked PAGCOR officials what will happen to these fees and they said, 'Ay wala na po iyon, fees po iyon.' Imagine that vague answer, they don't even know what to do," the senator said.

According to Escudero, in online gaming, the games are here but the bettors are outside of the country. The game servers are here but the payouts are done outside the country.

"There is no way to monitor how much they should pay the government. Walang nakakapag-monitor noon. So ano po ba talaga iyong dapat nilang bayaran? Kung sa ilalim ng batas 1 percent ba yan of gross, 5 percent ba yan of net? How do we compute? This is part of what we should look into," he pointed out.

"Ang pinag-uusapan natin dito ay sugal. It must always be resolved against gambling and not against any other reason. So kung ang pag-uusapan mo ay liability ng gaming operation, it should always be resolved in favor of the national government, not in favor of the entity or any of the entities engaged in gambling," Escudero added.

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