Duterte open to return of online gambling if…

After denouncing online gambling, specifically its principal player PhilWeb Corp., President Duterte said yesterday he may reconsider his position and allow e- game firms to resume operations, provided they pay the right taxes that his administration can keep as trust fund for social services.

“Ibabalik ko (I’ll restore) online provided taxes are correctly collected and they are situated in places or districts where gambling is allowed, meaning not within a certain distance from church and school,” he said at a press briefing at the provincial police headquarters in Taytay, Rizal.

“Pay the correct taxes, gamble your wealth until your death, I don’t care. Just pay taxes and this will add to a special trust fund for medicine of poor people,” he added.

In his denunciation of oligarchs, Duterte singled out businessman and former finance minister Roberto Ongpin, who headed PhilWeb until he offered to donate 49 percent of his 53.76 percent share to Philippine Amusement and Gaming Corp. ( Pagcor) in hopes of having the firm’s license renewed.

The President’s softening of position came after Ongpin made another attempt to save PhilWeb – this time by offering to have his donation used exclusively for the establishment of a nationwide network of drug rehabilitation centers.

“I hope you will forgive me for this one final attempt at not only saving the livelihood of some 6,000 individuals and their families but also to make effective use of my donation, which has now been rejected by Pagcor,” Ongpin said in his letter to Pagcor’s board of directors and CEO Andrea Domingo early this week.

Ongpin said a comprehensive drug rehabilitation program should complement the Duterte administration’s war on drugs.

Also yesterday, Duterte said he is allocating P30 billion to P35 billion of Pagcor revenues to subsidize medicine for the poor.

PhilWeb is also seeking permission from Pagcor to operate a new SMS-based lottery business, which it said has nothing to do with online gaming.

In a letter to Pagcor’s Domingo yesterday, PhilWeb president Dennis Valdes said the company is reviving the so-called Pagcor Text Bonanza, proposed several years ago to the gaming regulator but was not acted upon.

The proposed business is an SMS-based scheme that would supplement the current lotto betting business in the Philippines, which is run by the Philippine Charity Sweepstakes Office (PCSO).

Under the proposal, lotto bettors can text their lottery numbers using their Smart mobile phones to Pagcor-PhilWeb servers based on a proprietary software developed by PhilWeb.

The bettors will then receive confirmatory message, which effectively becomes their ticket.

This has the potential to earn revenues of P50 billion to P100 billion, to be shared among Pagcor, PhilWeb and Smart, Valdes said.

Valdes said Smart has agreed to the text revenue sharing formula of 70 percent for PhilWeb and 30 percent for the mobile company in contrast to the normal sharing of 70 percent for Smart and 30 percent for the service provider.

“It should be possible also to include Globe in this project if they would agree to the same 70 percent PhilWeb and 30 percent to Globe formula,” Valdes said.

The existing Lotto, which is operated by the PCSO through the sale of thermal paper printed tickets in some 4,000 outlets nationwide, earns for PCSO approximately P30 billion per year.

The bettors are required to physically queue at Lotto outlets in order to purchase their tickets and during times when the lottery jackpot is large, the lines can extend up to a kilometer long, Valdes said.

“It is not difficult to see the advantage of Pagcor Text Bonanza. The potential revenue could easily hit P50 billion to P100 billion a year. Pagcor Text Bonanza could supplement government income many times over,” he said.

The P50 billion to P100 billion revenue estimate is based on a P15 bet price per text, which translates to P27.37 billion in revenues at five million text messages per day and P54.75 billion at 10 million text messages per day, according to PhilWeb’s proposal.

Of the amount, the net win is P4.275 per SMS or P7.80 billion per day at five million text messages and P15.60 billion per day at 10 million text messages per day.

Pagcor would then get 60 percent or P4.68 billion a day based on fi ve million text messages and P9.36 billion based on 10 million text messages.

PhilWeb’s share of 40 percent will be P3.12 billion a day based on five million text messages and P6.24 billion based on 10 million text messages.

“There is an existing Department of Justice opinion confirming that nothing prevents Pagcor from engaging in Pagcor Text Bonanza, which is nothing more than a sophisticated technology lottery, clearly allowed in the Pagcor chapter,” Valdes pointed out.

New gaming products

At the Senate, a Pagcor official said they expect the introduction of new gaming products as well as income from the new casinos to make up for the revenue loss from the phaseout of its e-games.

In a briefing to the members of the Senate Committee on Games and Amusement yesterday, Pagcor accounting head Sharon Quintanilla noted that the closure of all the e-games and electronic bingo ( e- bingo) operations as directed by the President would result in a loss of P10 billion in revenues for the government next year.

For this year, with the partial closure of the e-games and e-bingo stations, Quintanilla pointed out that a total of P3.65 billion in foregone revenues is expected.

Based on data from Pagcor, the projected revenue for 2017 of P46.74 billion has been adjusted to P36.63 billion to reflect the losses from the electronic gaming operations.

Pagcor’s Domingo said that there are around 169 e-bingo outlets, as well as some egames branches that have yet to close.

Domingo explained the remaining stations in operation have franchises that have not yet expired. But as soon as they expire, she said that they would no longer be renewed.

“The operation of PhilWeb is significant. They have 286 ( e- games) stations and then the bingo. All of these generate revenues for Pagcor,” Domingo said.

One of the ways being considered by Pagcor to recover its losses is through the introduction of new gaming products, led by one that is offshorebased.

Domingo explained the offshore gaming product would be exclusively for foreigners and that even overseas Filipino workers and Filipino expatriates would not be allowed to play.

“It will cover what we lost from e-games. In the initial six months, we expect to recover the P3.5 billion we will lose this year,” Domingo said.

She said the offshore game will be launched in September and they would use the first six months of its operation to fine-tune the operations.

“We will be implementing many products to recover the losses and at the same time, restrict Filipinos from accessing this. We want to keep these away from Filipinos who cannot afford (to gamble). We want to avoid this being addictive to people who cannot afford it,” she said.