Regulatory Supervision
- The Philippine Racing Commission (Philracom) supervises and regulates the horse racing operations, including race scheduling, race track safety, prize allocation, and security.
- The Games and Amusements Board (GAB) supervises and regulates betting activities and licenses all racing officials and personnel.
Term Extension
- The franchise term granted to PRCI is extended by twenty-five (25) years beyond the original expiration date in October 1997.
Exclusive Betting Rights
- PRCI or its duly authorized agents exclusively may offer, take, or arrange bets on horse races conducted within or outside the Philippines.
- Betting may be done in person or through electronic and other transaction processing means across the country.
- It is unlawful for any other person or entity to conduct betting activities or use betting devices on PRCI horse races.
Penalties for Unauthorized Betting
- Violation of exclusive betting provisions results in fines between P2,000 and P5,000, imprisonment from one to six months, or both.
- Corporate offenders hold the president, managing partner, or responsible manager criminally liable.
Required Facilities and Technology
- PRCI must provide and maintain advanced mechanical, electrical, or computerized devices including:
- Photo patrol and electronic cameras
- Automatic starters
- Electric totalizators
- Photo finish devices
- Computer-connected ticket sale display boards
- Horse tattoo branding facilities
- Drug testing laboratories and instruments
- Weighing and measurement devices
- Modern sound and broadcasting equipment
- Continuous and backup power supply
- These facilities are mandatory within three years; failure results in suspension of racing activities by Philracom.
- GAB will assign auditors and inspectors to oversee betting and wager fund distribution.
Betting Ticket Terms and Fund Distribution
- Terms and conditions for betting ticket sales must be clearly published and displayed.
- Gross wager receipts from ticket sales are distributed as follows:
- 82% as dividends among winning ticket holders
- 8.5% as PRCI commission fee
- 8.5% for stakes (prizes) and jockey bonuses
- 1% allocated for the Philippine Racing Commission
- Breakage funds (from less than ten centavo fractions) are apportioned in equal 25% shares to:
- Local hospitals where the race track is situated
- Drug rehabilitation programs
- Philippine Racing Commission for prize enhancement and capital outlay
- National Stud Farm for horse breeding activities
Racing Schedule Restrictions
- PRCI is authorized to hold races at least two days per week, Saturdays, Sundays, and official holidays except those with legal race prohibitions.
- Night races on public holiday eves allowed, not exceeding five days annually and starting no earlier than 5:30 PM.
- Racing days allocation must align with provisions under Republic Act No. 309.
Documentary Stamp Tax on Betting Tickets
- A documentary stamp tax of 10 centavos applies per ticket.
- For tickets exceeding one peso, an additional 10 centavos per peso or fraction is imposed.
- For double, forecast/quenella, and trifecta bets, the tax is 5 centavos per peso.
Franchise Tax and Revenue Allocation
- PRCI shall pay a 25% franchise tax based on gross earnings from authorized horse races, equivalent to 8.5% of gross betting receipts.
- Tax distribution:
- 5% to national government
- 5% to province/city/municipality hosting the race track
- 7% to Philippine Charity Sweepstakes Office
- 6% to Philippine Anti-Tuberculosis Society
- 2% to White Cross
- Monthly tax payments are mandatory and this tax replaces all other local property taxes except income tax.
Tax on Winnings
- Winners pay 10% tax on winnings after deducting ticket cost; for double, forecast/quenella, trifecta bets, tax is 4%.
- Winning racehorse prize tax is 10%.
- Operators must withhold tax before paying winnings and file returns with the Bureau of Internal Revenue within 20 days.
Restrictions on Franchise Transfer
- PRCI is prohibited from leasing, transferring, selling, assigning, or merging its franchise or related rights without Congressional approval.
Incorporation and Repeal of Conflicting Laws
- Provisions of Republic Act No. 309 not inconsistent herewith remain effective.
- Any conflicting laws, executive orders, or regulations are automatically repealed.
Effectivity
- The Act takes effect 15 days after publication in at least two newspapers of general circulation in the Philippines.