BUSINESS

NGO files court challenge of PAGCOR’s online authority

TAGs: CEZA, PAGCOR, Philippines

pagcor-court-challenge-online-gambling-authorityAnti-online gambling groups in the Philippines aren’t giving up on their hope of convincing the courts of revoking the local gaming regulator’s ability to issue online gambling licenses.

On Monday, a local advocacy group calling itself the Anti-Trapo Movement of the Philippines (ATM) petitioned the country’s Supreme Court to issue an injunction preventing the Philippine Amusement and Gaming Corporation (PAGCOR) from issuing online gambling licenses.

ATM chairman Leon Peralta (pictured, delivering his petition) has asked the Court to revoke the 35 Philippine Offshore Gaming Operator (POGO) licenses that PAGCOR issued last fall as part of the regulator’s efforts to centralize control over the country’s online gambling industry.

The ATM’s petition further claims that PAGCOR’s POGO program “is violative of” Philippine President Rodrigo Duterte’s Executive Order #13, “which specifically defined and clarified the individual authorities granted under the laws by which it was created to each government agency.”

The ATM isn’t the only one trying to get the Court to scuttle PAGCOR’s POGO program, as a different NGO filed a similar petition last December. More recently, Philippine Sen. Francis Escudero voiced the rather silly argument that, since PACGOR’s charter was written before online gambling was invented, the activity remains outside PAGCOR’s scope of influence.

Last week, Philippine Sen. Richard Gordon suggested forming a new regulatory body whose sole area of influence would be online gambling. At present, PAGCOR shares that responsibility with a number of the country’s special economic zones, including the Cagayan Economic Zone Authority (CEZA).

Throughout these challenges to its authority, PAGCOR has consistently maintained that it has both the right and the capacity to regulate online gambling operations in keeping with Duterte’s wish to restructure the industry and boost government tax revenues.

CEZA DENIES PAGCOR CLAIMS RE LAM, TAX DODGING
Meanwhile, Friday saw CEZA issue yet another statement denying having issued an online gambling license to Jack Lam, who (until recently, at least) runs the Fontana Casino inside the Clark Freeport Zone. The legality of Lam’s online operations has been the subject of massive investigation after over 1,300 illegal Chinese workers were arrested in the Freeport last November.

As it originally stated last December, CEZA reiterated that Philippine law restricts it to operating within the Cagayan Economic Zone and therefore CEZA is “not authorized to issue licenses and/or accreditations to companies that intend to operate within the Clark Freeport.” (For what it’s worth, the ATM filed a graft complaint against Clark Freeport officials last December for tolerating illegal gambling under their noses.)

CEZA also took issue with PAGCOR chairperson Andrea Domingo’s testimony last week to a Senate committee investigating the Lam affair, at which Domingo claimed that the government “has been losing at least P6b (US $119.3m) annually from unregulated online gambling franchises granted by CEZA” such as those run by Lam.

CEZA claimed that Domingo’s P6b estimate was “exaggerated” and that CEZA was “a consistent top taxpayer in Region II and a consistent dividends remitter.” CEZA claimed it had provided the government with over half of the P4b earnings that CEZA received from its gambling licensees between 2005 and 2016.

The First Cagayan Leisure and Resort Corporation is fighting for its life following Duterte issuing his EO #13, which requires online gambling licensees to base their entire operations within the confines of the economic zone that issued their license. First Cagayan has been lax about keeping its technology infrastructure up to date and now finds itself scrambling to upgrade its facilities in a bid to hold on to its dwindling list of licensees.

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