Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1869)
The main policy objective is to centralize and integrate all games of chance into one corporate entity (PAGCOR) controlled and supervised by the government to generate revenue for infrastructure and socio-civic projects, create recreation facilities to boost tourism, and minimize evils and corruption in gambling.
The Philippine Amusement and Gaming Corporation (PAGCOR) is created as a government-owned and controlled corporation to regulate, operate, and conduct games of chance.
PAGCOR's authorized capital stock is divided into one million voting no-par value shares: 550,000 shares subscribed and paid for by the government, and 450,000 shares that may be subscribed by private persons or entities approved by the Board.
The Board is composed of five members: three from the government sector appointed by the President of the Philippines, and two from the private sector elected by stockholders who own at least one share.
The government shall receive 50% of the aggregate gross earnings of PAGCOR, after deducting a 5% franchise tax; however, if gross earnings are less than P150 million annually, the government's share shall be 60%.
PAGCOR can prescribe bylaws, own and dispose of properties, enter into contracts, employ personnel, acquire and maintain facilities, borrow money, invest funds, and do all acts necessary to fulfill its purpose of operating games of chance.
PAGCOR's imports for gaming operations are exempt from all customs duties, taxes, and imposts. PAGCOR is also exempt from all taxes except for a 5% franchise tax on gross revenues. Operators and contractors related to PAGCOR also enjoy exemptions on taxes from their earnings associated with PAGCOR operations.
Allowed players include tourists and foreigners not residing in the Philippines, residents with gross annual income of at least P50,000 certified by the BIR, and up to two guests of such qualified persons over 21 years old.
Government officials directly connected to government operations, members of the Armed Forces and Constabulary, persons under 21 years old, and students of any Philippine educational institution, except those employed by casinos or approved special guests.
PAGCOR is granted a 25-year franchise, renewable for another 25 years, to operate gambling casinos, clubs, and other amusement places within the Philippines.
All persons primarily engaged in gambling and related businesses with contracts or franchises from PAGCOR must register and affiliate their businesses with PAGCOR, subjecting them to its regulatory powers.
PAGCOR exercises powers similar to the Securities and Exchange Commission over affiliated entities, including authority to approve amendments of their articles of incorporation, bylaws, corporate structure, capitalization, and other operational matters except original incorporation.
The Commission on Audit or a government agency designated by the Office of the President shall audit PAGCOR specifically focusing on the 5% franchise tax and the government's 50% share of gross earnings. The auditor and staff salaries are paid by PAGCOR.
No. All positions in PAGCOR, whether technical, administrative, professional, or managerial, are exempt from the Civil Service Law and are governed only by personnel policies set by the Board of Directors.