Bill seeks to make Pagcor purely regulatory, grant Congress licensing powers 

Are there too many regulatory agencies in the gaming industry?

Party-list group One Patriotic Coalition of Marginalized Nationals (1-Pacman) has gotten the ball rolling on a priority measure to make the Philippine Amusements and Gaming Corp. (Pagcor) “purely regulatory” – and transfer licensing powers in the hands of Congress.

House Bill No. 6111 seeks to turn Pagcor into the Philippine Amusements and Gaming Authority (Paga), which would consolidate all regulatory functions in the gaming industry.

The proposed Paga would be “purely regulatory in nature” and “not be an operator of games of chance,” according to the bill filed by Reps. Enrico Pineda and Michael Romero.

The bill strips Pagcor of its licensing powers and transfers the authority to Congress. Under the bill, all casino, gaming and gambling operators would be required to secure legislative franchises, just like public utilities.

Existing licensees authorized by current laws would be given one year to secure the franchise under the bill. Otherwise, such operations would become illegal.

Consolidated regulation

The bill would transfer to Paga regulatory functions currently spread out among the Philippine Charity Sweepstakes Office (PCSO), the Games and Amusement Board (GAB), the Cagayan Economic Zone Authority (Ceza), the Aurora Pacific Economic Zone and Freeport (Apeco), and other special economic zones.

This would make PCSO a “purely charitable institution and a recipient of the share of funds from sweepstake operations” and repeal the authority of special economic zones over casinos and other gaming facilities.

GAB, which is mandated to supervise professional sports and combat illegal gambling, would be abolished under the bill as its functions would be absorbed by the proposed Paga.

Besides regulating all gaming and gambling activities and handling policy matters, the proposed Paga would be tasked with detecting offenses, receiving and investigating complaints, adjudicating disputes between operators and patrons, inspecting equipment, and selling related assets.

Paga would be governed by a five-member board of directors, whose members should be at least 30 years old and have at least two years of industry experience. Its proposed authority would also cover PCSO.

The bill does not prescribe term limits and simply states that each director “shall serve at the pleasure of the President.”

The board would have the power to appoint inspectors to monitor the operations of legislative franchisees.

Such inspectors would not only be empowered to inspect activities and require persons to answer questions, they would also be allowed to seize equipment as evidence for violations.

Charitable obligations

The charitable and social obligations of Pagcor, PCSO and GAB under pertinent laws would still be supported under the Paga bill.

The funds would be sourced from legislative franchisees, who would be subjected to a 5-percent franchise tax on aggregate gross earnings.

The PAGA board would be required to set a fixed amount of remittances that is equivalent or higher than the “existing value” remitted by Pagcor.

Explanatory note

The bill’s explanatory note cites that currently there are “too many regulators and regulatory regimes.”

It also points to the “inconvenience of having an agency which is a regulator and at the same time an operator of the industry it regulates.”

Thanks to their separate regulatory powers, the bill authors says economic zone authorities have been “used as a haven for the operation of illegal gambling activities.”

The bill, filed Aug. 2, is currently pending at the House games and amusements committee.

House Speaker Pantaleon Alvarez, during the opening of the second regular session of the 17th Congress on July 24, called on lawmakers to include the reorganization of Pagcor in the chamber’s priority agenda.

“An entity that has this power runs the risk of dealing itself a favorable hand while undercutting others,” Alvarez said in his July 24 speech. /atm