Operating expenses and funding source
- Section 3 provides that the operating expenses of the Office are paid from its receipts.
Charity sweepstakes horse races—rules
- Section 4 requires the Office to hold charity horse race sweepstakes under regulations promulgated by the Board in accordance with Republic Act No. 309.
- Section 4 allows the Board to determine a procedure for the distribution of prizes in the most just, equitable and expeditious manner when holding a sweepstakes race to determine prizes is impossible due to war, public calamity, or other unforeseen or fortuitous event, or when there is no sufficient number of horses to determine the major prizes.
- Section 4 provides that horse races and the sale of tickets in the sweepstakes are exempt from all taxes, except that each ticket must have a twelve-centavo internal revenue stamp.
- Section 4 directs that 1.5% of the total prize fund (from the proceeds of ticket sales) is deducted and paid to the Bureau of Internal Revenue not later than ten days after each sweepstake; this payment is described as the income tax “heretofore collected from stakes prize winners.”
- Section 4 provides that any payments taken from the resulting prize fund after the 1.5% deduction are exempt from income tax.
- Section 4 requires that the tickets be printed by the Government and declares them government securities for purposes of penalizing forgery or alteration.
Eligibility, registration, and race entry limits
- Section 5 sets five kinds of races based on horse height thresholds:
- races for horses of less than 54 inches in height;
- races for horses of 50 inches or more but less than 56 inches in height;
- races for horses of 56 inches or more but less than 58 inches in height;
- races for horses of 58 inches or more but less than 60 inches in height;
- races for horses of 60 inches or more in height.
- Section 5 limits participation: only native horses may participate in any sweepstakes race.
- Section 5 requires a horse intended for races under the Act to be registered within 30 days after its birth with the treasurer of the municipality in the Philippines where it was born.
- Section 5 requires a second registration within 1 year after birth, stating identification data such as brand, sex, color and cowlicks.
- Section 5 provides a cut-off: 3 years after this Act takes effect, no horse may participate unless it is registered.
- Section 5 bars repeat prize participation: only horses that have not run for a prize previously in any race in the Philippines may participate in any sweepstakes race under the Act.
- Section 5 requires registration with the Philippine Charity Sweepstakes Office at least 30 days before the holding of the race for all horses participating.
- Section 5 limits entries: no horse owner may register more than one entry that may participate in any sweepstakes race.
Disposition of gross receipts and charitable allocations
- Section 6 directs the disposal of gross receipts from sale of tickets for races held under the Act according to fixed percentages and allocations.
- Section 6 mandates that 10% is applied to operating expenses of the Office.
- Section 6 requires that after deducting operating expenses and setting aside a reserve fund:
- the reserve fund shall not exceed PHP 1,000,000 at any given time for the purchase of real estate and machineries for the Office’s own use and/or improvement of the same and/or to meet future losses and contingent liabilities.
- Section 6 provides that after these deductions, the balance plus the proceeds from the races after deducting expenses of the draw and races in sweepstakes is added to the portion described in Section 6(c).
- Section 6 sets prize allocations: 58.5% is applied to the payment of prizes, including prizes for owners and jockeys of winning horses.
- Section 6 requires the structure for the three main prizes for horses: each of the three main prizes for horses must be 10% of each of the three main prizes for winning tickets, respectively.
- Section 6 mandates public-health and welfare allocations:
- 6.5% is allotted to provinces and cities in the Philippines except the City of Manila, in proportion to collections therein; the allotted amounts must be expended for the maintenance of provincial, city and municipal hospitals, and for other health, social welfare, and charitable work in their respective jurisdictions.
- Section 6 establishes the Board-controlled charitable distribution pool:
- the remaining 25% together with receipts for holding sweepstakes races and proceeds from holding lotteries (as provided later in the Act) is apportioned—except as otherwise provided—by the Board with the approval of the President of the Philippines and paid to institutions or organizations engaged in charitable, relief, and health work, or work for improving conditions of the indigent Filipino masses in the country or abroad.
Restrictions on recipient organizations and fund use
- Section 6 restricts charitable funding: no aid from sweepstakes proceeds may be given to any charitable organization not granted a special charter by law unless it first complies with the Board’s rules and regulations approved by the President governing disposition of the sweepstakes fund.
- Section 6 requires an additional by-laws condition for eligible organizations: by-laws must provide that:
- any property acquired or which the organization may acquire from the funds given to it under the Act shall not be sold or otherwise disposed of without the approval of the President of the Philippines; and
- upon dissolution, all such properties shall be transferred and automatically become the property of the Philippine Government.
- Section 6 limits use of granted funds: funds given to an institution under this section must be used for no other purpose than those authorized by the Board of Directors.
Board reporting requirement
- Section 7 requires the Board to submit, during the month of July of each year, a report of the Office’s activities to the President of the Philippines and to both Houses of Congress.
Penalized acts and imprisonment terms
- Section 8 penalizes the listed acts with imprisonment for not less than one month and not more than three years.
- Section 8 penalizes any person who, without being a duly authorized agent of the Office, sells tickets of the Office.
- Section 8 penalizes an authorized agent who sells tickets, fractions, or coupons that are not issued by the Office but represent or tend to represent an interest in tickets issued by the Office.
- Section 8 penalizes any person who sells tickets issued by the Office at a price greater than the price stated on the ticket.
- Section 8 penalizes any officer or employee of a hospital or other charitable or hygienic institution or organization who uses funds obtained from the Office under the Act for purposes other than those authorized by the Act.
Lotteries—authority, timing, and Board powers
- Section 9 authorizes the Philippine Charity Sweepstakes Office to hold lotteries once a month during months when there are no sweepstakes draws and races.
- Section 10 requires the Board of Directors, with the approval of the President of the Philippines, to promulgate rules and regulations for holding lotteries.
- Section 10 requires the Board (with Presidential approval) to fix:
- the number and price of tickets;
- the number of tickets usually given gratis to ticket vendors;
- the number and amount of prizes;
- the date when the sale of tickets shall close;
- the dates and place or places where lotteries will be held.
Repealing clause and effectivity
- Section 11 repeals Act No. 4130, as amended by Commonwealth Acts Nos. 301 and 506 and Republic Acts Nos. 72 and 574, and repeals all other Acts or parts thereof except Commonwealth Act No. 595 and Republic Act No. 620 to the extent they are inconsistent with the provisions of Republic Act No. 1169.
- Section 12 provides that the Act takes effect upon approval.
- Republic Act No. 1169 was approved June 18, 1954.