Philippine Gaming Industry

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Despite the surge of Pagcor income that has succeeded immensely in supporting the cash-strapped government, several lawmakers, nongovernment organizations and especially the religious sector are still firmly against government engaging in the business of operating casinos.

Edward King, spokesman for Pagcor chairman Efraim Genuino, told The Manila Times that first and foremost, one thing that people should remember is that Pagcor is a creation of law.

Pagcor, a government-owned and controlled corporation was established to regulate all games of chance in the Philippines.

It was born in 1976, created by then-President Marcos to oversee the operation of gaming casinos, to generate funds for the government’s developmental projects and to help curb illegal gambling.

An unaudited Pagcor report shows that Pagcor, “a vital arm of the government in nation building, “ netted P25.4 billion in income making it one of the biggest earners for 2006.”

So is Pagcor a proof that casinos and legalized gaming can be a valuable source of government funding and an effective engine for national development?

“We are created by law, we are just following what the law orders us to do. It is not a question that is up to us to decide. We must obey the law,” King said.

Under the law, he explained, Pagcor is required to run casinos.

He said that the most important thing about the government running casinos is that all funds that generated from Pagcor goes back to the government “100 percent.”

“We are operating the casinos but here is where everything lies: 100 percent of the income that we generate goes back to the government,” King said.

The state-run gaming firm surpassed its earlier record-breaking P21.9-billion total annual income in 2004 and breached its target income of P23.41 billion for 2005. It surpassed the P24.5 billion target for 2006 as well.

Pagcor’s 2005 total income of P23.4 billion was 6.8 percent higher than the P21.9 billion it posted a year before.

The issue of privatizing Pagcor is also very controversial, with several lawmakers pushing for it and even more congressmen against it.

King said that while the act can be considered purely from the noble and idealistic viewpoint that government should not be in the business of gambling, one has to think from the point of view of generating funds for the government.

He said that if the government would privatize Pagcor, then all income goes to the private sector leaving only a small amount in taxes being paid to the government coffers.

“If you give Pagcor to the private, they will just be paying taxes. There is a huge difference between a fraction of income from taxes to 100 percent,” King said.

An official from Pagcor who requested anonymity even claimed that perhaps the lawmakers have their own personal agenda. Maybe they want to be the ones who will buy and operate Pagcor, they said.

“Its simple, privatize Pagcor they get the income, the lawmakers may perhaps be getting their own kickbacks from certain lobby groups who want Pagcor for their personal purpose,” the official said.

King merely laughed at the statement of the official adding that he did not want to comment, not wanting to get into trouble with the congressmen.

King, however, added that if Pagcor is run privately, all measures such as that of the antimoney laundering might be removed and the private personalities owning it may use the gaming for the bad purposes that the antimoney-laundering council wants to prevent.

“Pagcor is created by law with the purpose of bringing much needed funds to the government. Certainly if you are run privately mahirap bantayan. How can you impose legislation on it which means how can we protect ourselves now from money laundering, how do we prevent this money going out of the country,” he said.

“We are able to ensure that these things do not happen since the protective mechanism are all in place here. ’Yung mga private casinos for...
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