March 9, 2017
WIN TRANSCRIPT - JACK LAM BRIBERY SCANDAL
Sen. Win: Magkano ang total na utang ni Jack Lam sa Gobyerno?
PAGCOR: Your honor, yan po ang na-determine namin sa pag-extrapolate sa kung prompt yung pagbayad niya at tsaka dapat nyang bayaran simula ng 2007 na kung saan meron nang ibang casino sa Clark na nagtayo na may bagong rates na. Ang na-compute naming nawala sa gobyerno sa kanyang kontrata ay 13.9 billion pesos po sir.
Sen Win: 13.9 billion pesos ang utang ni Jack Lam sa Pilipinas mula 2007.
PAGCOR: Sir, hindi po utang kundi yun po ang nawala nang e-extrapolate namin kasi nga po ang kanyang kontrata ay napakababa po ng mga sinisingil sa kanya.
Sen Win: Okay, I will go into that later on madam. Si Jack Lam po hindi lang 2007 nag start ang kanyang operation eh. Matagal na ho syang nag-ooperate dito tama po ba?
PAGCOR: Ang simula po ng kanyang operation ay 2001 pa po sir.
Sen Win: 2001?
PAGCOR: 2002 daw po Sir.
Sen Win: 2002? So pwede po bang mas malaki pa ang kanyang dapat bayaran sa Pilipinas po? It can be more than 13 billion pesos?
PAGCOR: Sir, ang promise po yata nang binigyan sya ng kontrata, halimbawa, sa junket 1% lang instead of 10% and so on and so forth po, ay sa dahilang pioneer daw po sya sa Clark at that time. Kaya lang po ang nakuha nyang kontrata, co-terminus po sa buhay ng PAGCOR. So, noon pong taong 2007 na may nagtayo nang mga casino, napagtanto po yata ng administration ng PAGCOR na napakababa naman ng ganyan. So, ginawa po nilang mas mataas na kamukha na po ng mga integrated resorts dito na nagsimula din ng 2007 o 2008. Ang amin lang pong kinompute ay mula nung meron nang ibang nagtayong casino. Parang hindi na kasi full level playing field nun kasi mataas na.
Sen Win: 2002 sya nag-operate until nangyari po ito, mas malaki pa ba sa 13 billion ang dapat nyang bayaran o 13 billion lang po based on your analysis and computation?
PAGCOR: Ang tingin po namin, yun po ang nawalang revenues. 13.9 billion po.
Sen Win: Itong 13.9 billion is only due to PAGCOR?
PAGCOR: Opo. Casino lang po. Casino operations po yan.
Sen Win: Lahat po ng kanyang operations?
PAGCOR: Lahat ng kanyang operations sa casino.
Sen Win: Pati online?
PAGCOR: Hindi po kasama yun. Wala daw po silang online eh. Pero sa amin po, just to make it clear, binigyan din sila ng internet gaming license na up to this time ay alive pa po ang nine IT addresses nila dahil--
Sen Win: Sino po yung nagbigay nang license nila?
PAGCOR: Yun pong una nilang kontrata, 2005 pa lang po meron na silang internet gaming.
Sen Win: And that was given by PAGCOR?
Sen Win: Okay. Madam, itong 13.9 billion ba ho ay missed opportunity ito noh
PAGCOR: Opo, missed lost income.
Sen Win: Makokolekta pa ho ba natin yan? Legally, can we still collect that?
PAGCOR: Sir, kasama po yan doon sa negotiation.
Sen Win: Ano ang ating negotiating demands? Needs?
PAGCOR: Nag-uusap pa ho kami na magbabayad po sila nang kahit hindi po nitong partial -- lost revenues, tapos po aming ire-review yung contract so that maging level na lahat ng fees.
Sen Win: And kelan nyo po na-detect from 2007 na this is grossly disadvantageous to the government?
PAGCOR: This was brought to my attention by our legal and monitoring team. Tsaka marami pong nagrereklamo.
Sen Win: What year was this Madam?
PAGCOR: I just assumed office Sir last July 1, 2016. Meron ho kasi kaming regular meetings so naghahanap kami ng kung ano ba yung mga naging problema? So sa briefing nila, this was one of the things that were brought up.
Sen Win: 2007-2016, was there any attempt from previous--?
PAGCOR: I think Sir, there was an attempt to revoke the contract in 2007 and it was brought up to the Supreme Court. The Supreme Court actually decided in favor of Jack Lam but the decision is that they did not follow the proper procedure in the revocation of the case. It did not discuss the merits of the case rather the procedure.
Sen Win: So we can correct the procedure?
PAGCOR: Yes Sir. Sen Win: Did we correct the procedure?
PAGCOR: Ahhh...Ngayon po, we followed the correct---
Sen Win: Kasi almost ten years. We had 10 years.
PAGCOR: I don't know po the statement. But right now Sir, we have followed the proper procedure as dictated in the provisions for revocations in the contract. This is the reason why we wrote Jack Lam unless he pays what is due to the government, there is now legal way of revoking his license because he is now actually been found guilty of several violations of law.
Sen Win: To the best of your knowledge Madam, yung last ten years na yun, was there any attempt from PAGCOR? Kasi 10 years was a long time. If we can collect half of that 13 billion within that 10 years, malaking bagay na ho sa atin yan. Was there any attempt from PAGCOR? Ang procedure naman, it can be corrected.
PAGCOR: We found no record or report. The only attempt was that 0f 2007, they tried to revoke.
Sen Win: So pinabayaan lang po ng past management?
PAGCOR: I cannot make a judgment on that Sir.
Sen Win: Again, to the best of your knowledge Madam no, when you came in, ilan po ang nag-ooperate nang casino just like Jack Lam na mas mataas sa kanya ang binabayaran based on contract?
PAGCOR: Lahat po ng casino na nag-ooperate during my time ay pina-follow na po ang 25%/15%.
Sen Win: So mas mataas na ho?
PAGCOR: Opo. Malaking kataasan po.
Sen Win: So siya lang po talaga ang binigyan ng preferential rate? For 10 years, hindi po sya pinakialaman?
PAGCOR: Opo. Yung lang po ang alam ko to the best of my knowledge as you have said Sir.
Sen Win: So what are we collecting now?
PAGCOR: Can my lawyer answer Sir?
Sen Win: Yes. What are we collecting from him? Is that legally possible?
PAGCOR: Your honor, they are now closed so wala na ho tayong kinokolekta ngayon. Before closing the Fontana, we are collecting 1%.
Sen Win: Hindi. Yung mga utang niya or missed opportunities. Are we collecting anything from that? Of the 13 billion?
PAGCOR: That is subject of our negotiation your honor
Sen Win: So it's a negotiation but not a collection?
PAGCOR: Including the collection.
Sen Win: So meaning, you subscribed to the goodness of his conscience to somehow give us part of the 13 billion?
PAGCOR: No your honor. Siguro magbibigay din siya.
Sen Win: Yung 13 billion hindi pa atin yun.
PAGCOR: Hindi pa ho. Hindi pa. In fact your honor, hindi nya utang yun. Lost opportunity lang natin yun.
Sen Win: So ano ang kanyang motibo para bayaran yun? Ano ang kanyang incentive para bayaran yung 13 billion?
PAGCOR: Mabubuksan sya kapag nagbayad siya.
Sen Win: So that's about it.
PAGCOR: Yes your honor.
Sen Win: Let me just go to the online gaming because ito yung pinaka-brand nitong issue na ito. This online gaming where 13, almost 1,300 illegals were found in that online gaming. Was that issued by PAGCOR? Was that license issued by PAGCOR? Paano ho nangyari na naka-operate siya?
PAGCOR: No your honor. 2005 meron na siyang license sa online gaming sa amin pero unfortunately, hindi niya ginamit ang lisensya naming. He chose to use the CEZA license.
Sen Win: Why CEZA license kung meron naman sa inyo?
PAGCOR: We don't know your honor.
Sen. Win: CEZA license?
PAGCOR: Yes your honor,
Sen. Win: why is CEZA license ginamit kung meron naman sainyo?
PAGCOR: We don't know your honor.
Sen. Win: analyzing the entire thing, why did he use his CEZA license, where in fact he's not inside CEZA he's in Clark. Ano yung naging advantage niya to use that license?
PAGCOR: your honor, I will be speculating. I really don't know your honor.
Sen. Win: MAgkano binabayaran niya sa CEZA? Do you know?
PAGCOR: we don't know your honor.
Sen. Win: isn't it pag outside of CEZA dapat po pumasok na ang PAGCOR to regulate? CEZA is for CEZA but obviously they have been operating outside of CEZA, so dapat pumasok na dito ang PAGCOR--
PAGCOR: that is our position your honor, pero tinago niya samin yung operations niya.
Sen. Win: Pero meron kayong tao sa Clark ah, you have people monitoring these casinos, diba dalawa yan? Casino and online business. So obviously you have people monitoring land base casinos. Masasabi naman sainyo na meron 1,300 na tao nag-ooperate ng casino. I know this is beyond your time, but is there any record?--
Domingo: Pinapa-investigate ko nga bakit di ko pa na report yan kasi ang Casino is 1km away from the place where there was a raid and this place, I only saw it last weekend, is really separated and is surrounded by a gate. The thing is, we are not part of the Anti- illegal gambling Task Force who are supposed to be tasked to go into fact finding, go into intelligence gathering, so we are not equipped.
Sen. Win: Sino po ang head ng task force?
Domingo: PNP po ata yung sa Republic Act number, hindi po kasama sa listahan--
Sen. Win: so sino po ang nag-ooperate niyan, yung online niya kelan po nag start mag-operate?
PAGCOR: Sir, hindi po nga namin alam dahil sa CEZA po kami.
Sen. Win: going to that direction din no, I know there are some casinos operating outside of CEZA. Meron pa bang ganun sa ngayon? Meron pa bang online gaming operating outside CEZA? Licensed by CEZA to operate?
PAGCOR: meron po sir, CEZA registered locators, and we have been asked to fact find about this and we have given as report about this, about 84 locators who are still in places like RCBC plaza.
Sen. Win: So as we speak meron pa pong 84 locators licensed by CEZA but they're not inside CEZA?
Domingo: Yes I think so sir,
Sen. Win: And who regulates them?
Sen. Win: So CEZA has an office here in Metro Manila that regulates them.
Domingo: We are not aware of that sir.
Sen. Win: Madam, I saw two Memorandum of Agreements or MOA's signed by PAGCOR and CEZA precisely to oversee this type of operation. Yung pangawalang MOA na sinign mo which was dated in 2011. Is this still active?
Domingo: No sir, actually, first it was not implemented, the 2011, then expired last October 2016.
Sen win: so this MOA is precisely the governing document over those, which allows PAGCOR to govern, even though personally it is illegal for them to operate outside of CEZA but it gives you a legal personality to govern to oversee this.
Domingo: It would have sir if it were implemented--
Sen. Win: Was it implemented or was it expired?
Domingo: it was not implemented until it expired.
Sen. Win: Why was it not implemented?
Domingo: Sir again, Hindi ko po masasagot--
Sen. Win: to the best of your knowledge--
Domingo: Yung PAGCOR dati, siguro makakasagot niyan--
Sen. Win: Atty, sana how bingiyan kayo ng power eh to regulate and oversea, pero hindi ho na implement ang MOA unfortunately.
PAGCOR: Unfortunately your honor, during the last administration I was on floating status kaya di ko po--
Sen win: to the best of your knowledge? Atty bakit pinabayaan na lang tong 84 na mag operate pero wala pala nag reregulate?
PAGCOR: Di po pinayagan ni President Aquino to implement that MOA.
Sen. Win: Hindi pinayagan ni President Aquino ang PAGCOR to regulate?
PAGCOR: Yes, your honor.
Sen. Win: so in effect, no one is regulating them? Because CEZA is in Cagayan.
Gordon: Why do you think hindi pinayagan ni President Aquino?
PAGCOR: I don't know your honor.
Domingo: Pero eto sir, hearsay, nagtanong tanong lang po kami bakit hindi pinayagan, parang na insulto yata si President Aquino dahil napaka liit ng binigbigay ng CEZA. .5% of their self-declared revenue.
Gordon: but in fariness to CEZA Kung wala yan, walang CEZA, because it's out of the way, it's very far away.
Domingo: kaya sir, hindi siya na develop, dito po na develop, sa Makati--
Gordon: I'll assume on that later,
Sen. Win: according to the CEZA law they are mandated to pay 5% of their gross revenues. We'll make this very simple, yung gross earnings nila, times 5% yun ang babayaran nila. If they get a license from PAGCOR, is it the same 5%? Magkano bayaran ho nila? Yung 84 na yun. Just give an idea?
PAGCOR: under PAGCOR charter sir, we are required to remit 50% of whatever earnings we get from online games.
Sen. Win: so right now these games, supposedly is applying 5% of gross to CEZA. Supposedly, under the CEZA law and also the PEZA law, magkano ang dapat bayaran.
PAGCOR: We're still in the process of procuring 3rd party audit platform so we can determine in real time --
Sen. Win: Just a concept--
PAGCOR: for now sir were just imposing fixed rates, 10k per table game and 5k for RNG based games and 40k for sports betting.
Domingo: we have been able to get from audited financial statements of CEZA their contribution from their online game to the national government. And in 2006 it was 79 Million, I'm just rounding it off, 2007, we can give you a copy of this sir, and 121, 575, in 2008 178, 746,00, until 2005. It came up to 72, 305, 866 and this is for between 140 to 200 licensees for a total for 11 years. For 10 years they were able to contribute 2,754, 294, 496 in pesos sir. I just going to give you an idea of, we just have started in December, partially, operation of 35 licensees, and this is what PAGCOR have already collected. Just to compare.
Sen. Win: But in the previous administration, our PAGCOR administration, what was the license regime, or the tax regime, or tariff regime for this type of operation.
Domingo: It has not yet been established, because--
Win: So there's no such thing?
Domingo: No Sir.
Sen. Win: eh bakit ho it's all over the country, how come?
Domingo: sir di ko po masasagot yan, kasi well I'm very new at gaming and I'm very new at this job. I can tell you is in 10 years this what CEZA remitted for online however, right now--
Sen. Win: Madam, just to cut you off 5% of gross nila?
Domingo: Sir declared ho yan eh--
Sen. Win: Compared to what you are imposing now, ano ang mas malaki po.
Domingo: Mas malaki po yung sa PAGCOR sir
Sen. Win: Mas malaki? By how much? Double? Triple?
Domingo: Triple ho sir,
Sen. Win: So in your own estimate, triple? Ang ano ko lang ho, nakikita ko kasi maraming itong online casinos all over Metro Manila for a very long time. Kung kikita tayo ng triple, many years ago bakit ho di natin inimplement many years ago? Bakit ngayon lang ho in 2016? Missed opportunity na naman to, missed revenue na naman to, we're depriving of our country. We need that revenue for many basic services.
Domingo: Particularly sana po ito hindi po siya issue sa society natin because 100% foreign ang players, no Filipinos are allowed to play.
Win: My initial thoughts is you could impose triple the amount. How come hindi po to ginawa in the past. Yun ang aking thoughts. And again no, were talking about missed opportunities. If its 13B pesos for Jack Lam alone, but we have 84 other operators. May estimate ho kayo? How much we missed in that 84.
Domingo: Sir yung Jack Lam may operations po yun eh, di po online--
Sen. Win: out of the 84 do we have an estimate? If we followed the license regime? Magkano ang sana satin?
Domingo: Estimate po namin, this is really because we're new hear and we're studying the system we could conclude that anywhere between 5-6B per annum is being lost, but if you take in full all of the 200 licensees that may increase drastically.
Sen. Win: so from your estimate po between 5-6 Billion per year ang nawawala in missed revenues? In lost opportunities? Ewan ko kelan sila nag start but if nag start sila 5 years ako that's almost 25B pesos more or less.
Domingo: 2005 po sila nag start.
Win: So 10 years?
Domingo: 12 years po.
Win: let's round it off no, so that's about 60B--
Domingo: Sir, baka may rank up sila ng period sir eh, 2005.
Win: So in other words we missed 60B pesos, dito po sa 84 na nag ooperate. More or less.
Domingo: more or less po sir.
Sen. Win: Going forward, what is the plan of PAGCOR kasi nag expire na itong MOA II it should be used to govern all of this online casinos, which were issued by CEZA. Moving forward ano po ang gagawin natin sa 84?
Domingo: meron na pong EO no. 13, that defines, this, we can give you a copy.
Sen. Win: So itong 84 po ba ay ipapasara?
Domingo: kung susunduin po ang EO, papabalikin po dun sa jurisdictions APECO--
Sen. Win: Dapat bumalik sila sa or mag apply sila sainyo? Anong timeframe po yun Ma'am?
Domingo: Wala po kasing nakalagay na timeframe dun sa EO--
Sen. Win: pero EO is active now?
Domingo: yes sir--
Sen. Win: So kayo na po ang magpapatakbo ng EO--
Domingo: Hindi po, meron po sa EO na provision na meron representative and Presidente, na siyang magpapa implement ng EO.
Sen. Win: who's the implementing agency.
Domingo: It is Undersecretary Kitain who works in the office of the President. it's not an agency. It's not PAGCOR , we are under that, we work alongside APECO and CEZA.
Sen. Win: wala pong timeframe kung kelan? Because every year we're losing 6B pesos that's 2016. We already lost 6B pesos, if you don't move forward we'll lose another 6B in 2017.
Domingo: Our partner sir, in accordance to the EO we have actually opened our application period, for application for all who are interested in getting a license because now we feel confident that after talking to our procurement department, we will be able to put in place two very important control aspects, one, independent third party auditing service and the other one is probity check--
Win: Just to cut you off I did some simple calculations, we are losing 60M pesos a day, because of these 84 unregulated licensees or online casinos, if we don't move ahead we're depriving the Filipino 60M pesos a day.
Domingo: Yes sir, actually ang projection namin para dun sa 35 licensees ngayon by the end of the year, we'll be collecting over 3B pesos. So kung 200 ang licensees ng CEZA, dapat ho yung 3B na yun, yung 200 divided by 35 would be almost 6, that should be 3B times 6, that would be 18B pesos a year.
Sen. Win: Madam I think that I would like to urge PAGCOR to really implement this EO 13. Saying 60M a day marami ho tayong magagawa diyan and the mechanisms are already there and hindi lang ho na implement. I would like to urge you through the office of the President to implement this right away.
Domingo: Thank you sir we need all the support.
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