PAGCOR on the Hook for Massive Payment to the Philippine Sports Commission
The Philippine Supreme Court has issued a ruling that will hit the Philippine Amusement and Gaming Corporation (PAGCOR) hard. It has mandated that the gaming operator and state gaming regulator fulfill a financial obligation that has been pending for three decades.
Members of PAGCOR pose for a publicity photo. (Source: PAGCOR)
LISTEN TO THIS ARTICLE:This decision, which was disclosed on the court's website on August 22, requires PAGCOR to remit 5% of its gross income annually, post the deduction of its franchise tax, to the Philippine Sports Commission (PSC). The ruling underscores the PSC's longstanding deprivation of funds, which the court described as "neglected for decades."
Related: Philippine Bill Would Dissolve PAGCOR in Favor of PAGCOMAt the heart of the legal battle was the interpretation of the financial entitlements of the PSC. PAGCOR tried to argue that the PSC was not entitled to the full 5%, citing the need to account for other statutory deductions. These include a 5% franchise tax, a 50% share of its gross income to the national government, and a 10% subsidy to the National Power Corporation.
According to PAGCOR's calculations, these deductions would leave approximately 2.1% of its gross income payable to the PSC. This dispute was brought to the forefront by Josseler Guiao, a former member of the House of Representatives and its Committee on Youth and Sports Development.
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The implications of the Supreme Court's ruling are significant, given PAGCOR's reported revenue exceeding PHP220 billion (US$3.1 billion) over the past three years alone. The mandated payments, calculated from 1993 until now, represent a substantial financial commitment to the PSC.
The ruling also extends to the Philippine Charity Sweepstakes Office (PCSO), which has been ordered to make retroactive payments to the PSC from 2006 onwards. The PCSO, like PAGCOR, is a significant contributor to the nation's coffers and plays a pivotal role in funding various social programs.
This decision is a pivotal moment for the PSC, an institution that has struggled with financial constraints for years. The infusion of funds from the top online casinos in Philippines, in the face of PAGCOR and the PCSO, is expected to revitalize the commission's ability to support and develop sports in the Philippines. It's a step toward rectifying the years of financial oversight and bolstering the sports sector, which is vital for the nation's international representation and domestic sports development.
The Supreme Court's ruling not only addresses the financial dues of the past but also sets a precedent for future allocations. It clarifies the fiscal responsibilities of PAGCOR and the PCSO towards the PSC, ensuring that the commission receives the support it rightfully deserves.
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