QuestionsQuestions (Republic Act No. 1169)
The Philippine Charity Sweepstakes Office (the “Office”) has general powers referred to in Section 13 of Act No. 1459. Its Board of Directors is composed of five members appointed by the President of the Philippines with the consent of the Commission on Appointments, with compensation and term fixed by the President.
The General Manager directs and controls the Office in all matters not specifically reserved for action by the Board. With Board approval, the General Manager appoints the personnel of the Office except the Auditor and the Office personnel of the Auditor, who are appointed by the Auditor General.
The operating expenses of the Office are paid from its receipts.
When holding a sweepstakes race to determine prizes is impossible due to war, public calamity, or other unforeseen/fortuitous events, or when there is no sufficient number of horses to determine the major prizes, the Board may determine the procedure to distribute prizes in the most just, equitable, and expeditious manner.
The horse races and sale of tickets are exempt from all taxes except that each ticket must have a twelve-centavo internal revenue stamp. Also, from the total prize fund from ticket sales, 1.5% is deducted and paid to the Bureau of Internal Revenue within ten days after each sweepstakes as a substitute for the income tax previously collected from prize winners; any payout from the resulting prize fund after the 1.5% deduction is exempt from income tax.
Tickets shall be printed by the Government and shall be considered government securities for purposes of penalizing forgery or alteration.
There are five kinds of races, classified by the horses’ height ranges: (a) less than 54 inches; (b) 54 or more but less than 56 inches; (c) 56 or more but less than 58 inches; (d) 58 or more but less than 60 inches; and (e) 60 inches or more.
Only native horses may participate in any sweepstakes race under the Act.
A horse must be registered within 30 days after birth with the treasurer of the municipality where it was born. Another registration must be done within one year after birth, stating identification data (e.g., brand, sex, color, cowlicks). After three years from effectivity, no horse may participate unless properly registered.
Only horses that have not run for a prize previously in any race in the Philippines may participate in a sweepstakes race under the Act.
No horse owner shall be permitted to register more than one entry that may participate in any sweepstakes race.
Ten percent for operating expenses of the Office. After deducting operating expenses and after setting aside a reserve fund not exceeding P1,000,000 for specified purposes, the remaining is added to the proceeds for prizes and other allocations as provided. Fifty-eight and one-half percent for prizes (including owners and jockeys). Six and one-half percent for provinces and cities (excluding Manila) in proportion to collections, for hospital maintenance, health, social welfare, and charitable work. The remaining 25% plus receipts from sweepstakes lotteries and lottery proceeds are apportioned by the Board (with President approval) to eligible charitable/health/relief/improvement-of-indigent-conditions organizations, subject to eligibility restrictions.
The Act states that there are three main prizes for horses, each equal to ten percent of each of the three main prizes for winning tickets, respectively.
Aid cannot be given to an organization without a special charter by law, unless it has complied with Board rules/regulations approved by the President. Also, the organization’s by-laws must provide that properties acquired from the funds cannot be sold or otherwise disposed of without President approval, and that upon dissolution such properties automatically become property of the Philippine Government.
Funds given to any institution may be used for no other purpose than those authorized by the Board of Directors.
The Board must submit a report during July of each year to the President and to both Houses of Congress on the activities of the Office.
RA 1169 provides imprisonment for not less than one month and not more than three years for: (1) any person who sells tickets without being a duly authorized agent, or an authorized agent who sells tickets/fractions/coupons not issued by the Office representing an interest in Office tickets; (2) any person selling tickets at a price higher than the stated price; and (3) any officer/employee of a hospital or other charitable/hygienic institution who uses Office funds for purposes other than authorized.
Once a month during months when there are no sweepstakes draws and races, the Office is authorized to hold lotteries.
The Board of Directors, with the approval of the President, promulgates the rules and regulations for lotteries. The rules must address: number and price of tickets; number of tickets usually given gratis to vendors; number and amount of prizes; closing date for ticket sales; and dates and places where lotteries are held.