Court orders PCSO to lay off STL operation in Bohol

A Regional Trial Court decision promulgated on August 22, 2018, will enable the beleaguered lone Small Town Lottery (STL) operator in Bohol to continue their operations which were ordered terminated by the Philippine Charity Sweepstakes Office (PCSO).  

PF3 Games and Entertainment Corporation was granted a writ of certiorari and prohibition by the RTC Branch 211, Mandaluyong City directing the PCSO, Bohol Branch Office, Officer-in-charge (OIC) Roberto PioCinco to “cease and desist” from implementing the termination order as well as the forfeiture of the cash bond of PhP200 million.

NO DUE PROCESS

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The nine-page decision by RTC Branch 12 Presiding Judge Ofelia L. Calo resolved that the termination order of the PCSO did not observe the requirements of due process which is the right to notice and hearing.

The court also ruled that the PCSO failed to comply with the terms and conditions under the Deed of Authority that provides an arbitration clause in accordance with Republic Act 9285 known as the Alternative Dispute Resolution of 2004 in cases where disputes could not be settled amicably.

The acts of the PCSO Board of Directors to terminate PF3’s Deed of Authority without resorting to arbitration amounted to a grave abuse of discretion or in excess of its jurisdiction, according to the decision.

FAILURE TO REMIT

The authority of PF3 to operate a small town lottery (STL) in Bohol as an authorized agent corporation (AAC) on March 4, 2016 was canceled by the PCSO by virtue of  Board Resolution No. 0023 series of 2018 for its failure to achieve its Proposed Monthly Retail Receipt (PMRR) of PhP30 million a month.

The PMRR is the amount determined by the PCSO as the presumed monthly sales of an authorized agent corporation (AAC) that is subject to a monthly review.

According to PF3 Operations Manager Miguel Ortiz, the PMRR is computed as 30% of the total voting population of the municipality where the AAC operates multiplied by the bet of PhP1.00 multiplied by 3 daily draws multiplied by 30 days.

Ortiz told the Chronicle that their PMRR was based on the 30% of the total registered voters of 798,768 for Bohol during the 2016 general elections. 

LGU NON-COOPERATION 

“Only fifteen out of 47 towns and one city allowed the STL to operate – Tagbilaran City, Dauis, Panglao, Baclayon, Loay, Bilar, Carmen, Loon, Tubigon, Inabanga, Ubay, Talibon, Jagna, Candijay, and Dimiao,” said Ortiz.

Theoretically, the PMMR of PF3 was calculated at PhP30 million a month or PhP1 million a day, however with only 15 towns participating, the PMMR would only add up to PhP23 million.

According to the 2016 Revised Implementing Rules and Regulations (IRR) for the STL Lottery operations of the PCSO, factors to be considered in the selection of areas where STL will be conducted will include the projected viability of an STL operation in the area and the previous existence of illegal numbers game in the locality.

Local Government Units (LGU’s) are also encouraged to support the STL operations to help raise revenues for the government.

LEGAL AND FINANCIAL WOES 

Seven months into its operations, the PCSO started sending letters to PF3 reminding them of its failure to meet their agreed PMRR that eventually led to the termination of their accreditation as an AAC.

PF3 operations in Bohol was terminated by the PCSO General Manager Alexander Balutan, its Board of Directors through Anselmo Simeon P. Pinili and Bohol Manager Cinco.  

PF3 sought legal remedies from the courts thru the assistance of former Integrated Bar of the Philippines (IBP) Bohol Chapter Presidents Atty. TeodoroLagang and Atty. MenedioThadeusBernido.

When the hearing of the case was held before the RTC in Mandaluyong City, Lagang and Bernido requested the assistance of a Boholano colleague, Atty. Julius Gregory Delgado, former Senior Associate of Villaraza Cruz Marcelo and Angangco, known in legal circles as “The Firm”.  

PF3, represented by its Operation Manager Miguel Ortiz secured a temporary restraining order (TRO) on April 13, 2018, after posting a bond of PhP200 thousand.

WIDESPREAD ILLEGAL GAMBLING

Ortiz admitted in court that “they had a hard time complying with the PMRR which they submitted many letter requests for reduction.”

The PF3 operations manager blamed the rampant and uncurbed proliferation of illegal gambling in Bohol as the main reason for their failure to meet their monthly quota.

According to Ortiz, their average daily sales at the start was PhP20,000 per day up to PhP60,000 but it took them two years into their three-year contract to arrive at PhP1 million a day.

PF3, according to Ortiz suffered losses at around PhP50 million including the cash bond of PhP10 million and costs of operation for their fifteen stations with five employees for each station.

According to the PCSO IRR, a charity fund which is 30% of net sales shall be distributed to the City/Municipality – 3.00%, Congressional District – 0.25%, Provincial Government – 0.75%, PNP Provincial Office – 0.60%, Local PNP Station – 0.60% and the Provincial CIDG – 0.10%.

There are 83 reported AAC’s operating STL’s in the country with half of these operators facing difficulty remitting their monthly PMRR to the PCSO due to the “peryahanngbayan” or illegal gambling activities, politics, lack of police support and LGU intervention, according to sources in the know.

The STL was created to entice illegal gambling operators to form corporations to make their illegal activities legal while paying taxes to the government. (Chito M. Visarra)



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