Question & AnswerQ&A (Republic Act No. 1169)
The Philippine Charity Sweepstakes Office (PCSO), referred to as the Office, is the government agency authorized to hold charity sweepstakes, horse races, and lotteries. Its Board of Directors is composed of five members appointed by the President of the Philippines with the consent of the Commission on Appointments. The President also fixes their compensation and term of office.
The General Manager has the direction and control of the PCSO in all matters not specifically reserved for the Board of Directors. With Board approval, the General Manager appoints personnel, except for the Auditor and his/her personnel, who are appointed by the Auditor General.
Operating expenses of the PCSO are paid from its receipts derived from the sale of sweepstakes and lottery tickets.
When holding a sweepstakes race is impossible due to war, public calamity, unforeseen or fortuitous events, or insufficient number of horses to determine major prizes, the Board may determine an equitable, just, and expeditious procedure for prize distribution.
Sweepstakes tickets are exempt from all taxes except each ticket must bear a twelve-centavo internal-revenue stamp. From the total prize fund, 1.5% must be paid to the Bureau of Internal Revenue within 10 days after each sweepstakes draw in lieu of income tax on prize winners. Any prize paid after this deduction is exempt from income tax.
The five kinds of races are classified based on horse height: (a) less than 54 inches; (b) 54 inches or more but less than 56 inches; (c) 56 inches or more but less than 58 inches; (d) 58 inches or more but less than 60 inches; and (e) 60 inches or more.
Only native horses can participate. Horses must be registered within 30 days after birth with the municipal treasurer of the birthplace, and again within one year with identification data such as brand, sex, color, and cowlicks. After three years from the law's effectivity, only registered horses can participate.
The allocation is: 10% for operating expenses; a reserve fund (not to exceed one million pesos) for real estate, machinery, improvements, and contingencies; 58.5% for prize payments; 6.5% for health and charitable work funding by provinces and cities excluding Manila; and the remaining 25% plus proceeds from sweepstakes races and lotteries are distributed to charitable, relief, and health institutions by the Board with the President's approval.
Any person who sells PCSO tickets without authorization, or sells tickets, fractions, or coupons not issued by the PCSO, or sells tickets at prices higher than posted, faces imprisonment from one month to three years.
Yes, the PCSO is authorized to hold lotteries once a month during months without sweepstakes draws and races. The Board of Directors, with the President's approval, sets rules on ticket prices, number of tickets, prizes, ticket sale cut-offs, dates, and places for lotteries.