Just in the nick of time.
Philippines-based gaming technology provider PhilWeb Corporation gets a lease – albeit a short one – of life after the Philippine Amusement and Gaming Corporation (PAGCOR) has granted its request to extend its operation license in the island nation on Monday.
The renewal of Philweb’s license, which expired on Monday, came more than a week after PAGCOR Acting Chairperson Andrea Domingo announced a freeze on the issuance of new licenses. The freeze was pursuant to the directive of President Rodrigo Duterte to stop the proliferation of online gambling in the country.
In her July 8 letter addressed to Philweb President Dennis Valdez, Domingo pointed out that the new license issued to the gaming technology provider will only be until August 10, 2016.
“This has reference to your request dated July 8, 2016, for extension of Philweb IPLMA contract with PAGCOR on a month-to-month basis or other short term basis until the presentation regarding Philweb can be provided to the President and his directive regarding online gambling can be clarified,” Domingo said.
Duterte, who took his oath of office as the 16th President of the Philippines on July 1, wanted online gambling in the country to be stopped and revoke all existing licenses. He cited the difficulty of collecting taxes as one of the minor reasons why he wanted online gambling to stop.
“I really do not want the proliferation of gambling all over the country,” Duterte emphasized.
Following the President’s announcement, the value of the publicly-listed technology firm’s shares tumbled by 22 percent. The company voluntarily suspended trading of its shares on the Philippine Stock Exchange last week, citing the “unverified material information” circulating in the wake of Duterte’s pronouncement.
On the other hand, IP-E Game Ventures Inc., an online gaming firm also listed in the Philippine Stock Exchange, remains bullish on the prospects of the Philippines as a business process outsourcing hub for foreign gaming companies that are outsourcing game development and customer service and back-office functions in the country.
“IP E-Games is not involved in PAGCOR-related online gambling and thus do not foresee our video gaming business being affected by policy statements regarding online gaming (gambling),” Jaime Enrique Y. Gonzalez, founder and Chief Executive Officer of IP E-Games, said in a statement to GMA News.
PAGCOR owes gov’t US$507.45M
In another PAGCOR news, Philippines’ Commission on Audit claimed that the state gaming regulator failed to remit more than P24 billion (US$507.45 million) to the government.
Citing the state auditor’s 2015 report, ABS-CBN news reported that PAGCOR’s remittance to the Bureau of Treasury from 2011 to 2014 was short by P24,053,929,055.82 (US$ 508,59 million).
Under PAGCOR’s charter, the government must 50 percent share in the aggregate gross earnings of the corporation after deducting 5 percent franchise tax. The money will be allocated for infrastructure and socio-civic projects in Metro Manila.
However, COA said the funds PAGCOR submitted to the government was insufficient due to BTr’s failure to account and bill the corporation of its under-remittances despite the audit agency’s recommendations to do so in recent years.
BTr also allegedly failed to require PAGCOR to submit the certified monthly statements of gross earnings.