STL operators cheat PCSO of P50B, says NBI

OPERATORS of Small Town Lottery (STL) have defrauded the state-run Philippine Charity Sweepstakes Office (PCSO) of at least P50 billion yearly through the nondeclaration of actual sales, according to a report by the National Bureau of Investigation.

The government started STL in 1987 in hopes that it would stamp out “jueteng,” an illegal numbers racket. Both involved betting on two-number combinations.

The NBI finding was confirmed by PCSO Chair Erineo “Ayong” Maliksi, who said he had asked the agency to investigate STL operations following reports that some STL operators were using their licenses to conduct jueteng operations and not declaring actual sales to the PCSO.

“Approximated income from STL alone is P50 billion per annum nationwide, but the average income being declared by the STL operators in the past years is only around P4.7 billion,” Maliksi said.

He said that “based on the Gaming Product Development and Marketing Sector of the

PCSO, the potential income of all illegal games, including the illegal declaration from STL, could be approximately P100 billion a year.”

Front for ‘jueteng’

The NBI report, submitted recently by then Deputy Director for Regional Services Edward Villarta to Director Virgilio Mendez, was based on investigations of selected STL operations in the provinces of Bulacan, Zambales, Olongapo, Laguna, Batangas, Nueva Ecija and Quezon.

The Philippine National Police earlier said that STL was being used as a front for jueteng.

The NBI said STL operators in the seven provinces were using “papelitos” or “lastillas” (jueteng bet sheets), and not the PCSO official paper.

Unsupervised draws

The NBI also said that the conduct of actual draws was allegedly not being supervised by the PCSO, making it impossible for the PCSO to monitor the actual sales of STL operators.

Maliksi, a former Cavite governor and close ally of President Aquino, said the NBI report had been forwarded to the Office of the Ombudsman and the Commission on Audit.

“The implementing rules and regulations (IRR) of STL lack countermeasures in the system of recording of bets, collection and auditing, making [the system] vulnerable to manipulation and exploitation … to the damage and prejudice of the government,” the report said.

No point of sale

The NBI said STL license holders were not using point of sale terminals (POSTs) in their operations, allowing operators to underreport their sales.

The report said the terminals should be used in recording bets, in creating the corresponding tickets or receipts and in transmitting the record of the bets to central data center.

“This means that recording of bets is done manually by the sales agents while their accounting is through a portable register,” the NBI said.

Instead of using the terminals in collecting bets, all sales agents chanced upon by the NBI team were using white papelitos, it said.

Not covered by IRR

The NBI noted that the use of papelitos were not covered by the implementing rules and regulations governing STL.

In lieu of the nonavailability or nonoperation of the terminals, the rules called for the use of PCSO printed tickets.

“With this type of setup, it is highly improbable for the PCSO to determine the actual amount of sales per draw, per day, per week and per month being generated from the STL games,” the NBI said.

Registered ‘rebisahan’

“This could hinder proper recording and auditing, which may be used to defraud the government and avoid the payment of taxes, fees and remittances should there be misdeclaration of actual sales,” it added.

The report also said that because there was no mention in the IRR of authorized or registered “rebisahan” (where the bets are brought), it was difficult to distinguish legitimate STL outlets from “bookies” operations. (Bookies take illegal bets on horse races, fights and sports games.)

The NBI report also stated that draws were conducted in areas other than those stipulated in the PCSO permit.