Case Summary (G.R. No. 144463)
Petitioner
Senator Robert S. Jaworski, in his capacity as Chairman of the Senate Committee on Games, Amusements and Sports, challenged PAGCOR’s grant to SAGE of authority to conduct online gambling.
Respondents
- Philippine Amusement and Gaming Corporation (PAGCOR), a government-owned and controlled corporation created by Presidential Decree No. 1869.
- Sports and Games Entertainment Corporation (SAGE), a private entity granted the authority to operate sports betting and internet gaming.
Key Dates
• July 11, 1983 – Issuance of P.D. 1869 establishing PAGCOR’s franchise.
• March 31, 1998 – PAGCOR Board approves the “Grant of Authority and Agreement” with SAGE.
• September 1, 1998 – PAGCOR and SAGE execute the agreement.
• October 10, 2005 – En banc decision rendered by the Supreme Court under the 1987 Constitution.
Applicable Law
• Presidential Decree No. 1869 (PAGCOR’s legislative franchise).
• 1987 Philippine Constitution (governing Act).
• Rule 65, Sections 1–2, Rules of Court (certiorari and prohibition).
Procedural Posture and Remedies
Petitioner filed a petition for certiorari and prohibition directly with the Supreme Court under Rule 65, seeking nullification of PAGCOR’s grant of authority to SAGE. Respondents moved to dismiss for lack of standing and improper invocation of extraordinary remedies.
Legal Standing of Petitioner
The Court held that although members of Congress ordinarily must show personal and legislative impact, the issues’ public significance justified waiving strict standing requirements. Petitioner was deemed to have sufficient interest to challenge the grant on behalf of public welfare.
Jurisdiction Under Rule 65
Respondents argued PAGCOR’s licensing function is neither judicial nor quasi-judicial, thus outside Rule 65. The Court reiterated its discretion to entertain matters of transcendental importance and characterized the petition as one for prohibition to prevent enforcement of the contested agreement.
Scope of PAGCOR’s Franchise
Under P.D. 1869, PAGCOR’s franchise authorizes it to operate casinos, clubs, sports pools, and other forms of gambling “on land or water within the territorial jurisdiction of the Republic.” Internet gambling was not contemplated in 1983 and transcends national boundaries, thus falling outside the enumerated activities.
Reservation of Franchise and Non-Delegability
A legislative franchise is a special privilege that may not be arbitrarily assigned or shared. The principle delegata potestas non delegari prohibits PAGCOR from transferring or sharing its franchise. While PAGCOR may enter management contracts, it cannot vest franchise rights in another entity absent express legislative authorization.
Precedents on Joint Venture
...continue readingCase Syllabus (G.R. No. 144463)
Facts of the Case
- PAGCOR is a government-owned and controlled corporation created under Presidential Decree No. 1869 (July 11, 1983) with authority to centralize and integrate games of chance and to operate casinos, clubs, sports gaming pools, and other forms of recreation within Philippine territory.
- Section 1 of P.D. 1869 declares the State policy to centralize and integrate all games of chance and to eradicate malpractices in gambling by placing operations under government supervision.
- Section 10 grants PAGCOR a 25-year renewable franchise to operate gambling casinos, clubs, sports gaming pools (basketball, football, lotteries) and other amusement places on land or sea.
- Section 14 limits PAGCOR’s operations to the territorial jurisdiction of the Republic of the Philippines.
- On March 31, 1998, PAGCOR’s board approved a “Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming,” authorizing SAGE to operate sports betting stations in PAGCOR casinos and to conduct Internet gaming for local and international bettors, subject to safeguards ensuring integrity and fairness.
- The agreement was executed on September 1, 1998, by PAGCOR Chairperson Alicia Ll. Reyes and SAGE Chairman Henry Sy, Jr., and President Antonio D. Lacdao.
- SAGE commenced Internet gambling operations on a trial-run basis, issuing prepaid cards and redeeming winnings at Bingo Bonanza outlets.
- Senator Robert S. Jaworski filed a petition for certiorari and prohibition under Rule 65 seeking nullification of PAGCOR’s grant of authority to SAGE.
Relevant Statutory Provisions
- P.D. 1869, Section 1(b)(3): Centralize and operate games of chance to eradicate evils and corruptions in private gambling.
- P.D. 1869, Section 10: Grants PAGCOR a 25-year renewable franchise to operate and maintain casinos, clubs, sports gaming pools, and other amusement places on land or sea.
- P.D. 1869, Section 14: Limits PAGCOR’s conduct of gambling activities strictly within Philippine territory.
Petition and Grounds for Relief
- Petitioner contends PAGCOR committed grave abuse of discretion and exceeded its jurisdiction by authorizing SAGE to operate Internet gambling.
- He argues that P.D. 1869 did not contemplate Internet gambling in 1983, as the Internet was non-existent and gambling was confine