Creation and Purpose of Philippine Amusement and Gaming Corporation (PAGCOR)
- PAGCOR is established as a government-controlled corporate entity headquartered in Metropolitan Manila with authority to create branches throughout the Philippines.
- It aims to implement state policy on gambling regulation and revenue generation.
Powers and Functions of PAGCOR
- Prescribe bylaws, own and dispose property, enter contracts, employ personnel, acquire equipment, trade merchandise.
- Borrow funds locally or internationally, invest in government securities.
- Perform all acts necessary or convenient to fulfill its mandate.
Authorized Capital Stock and Ownership
- Capital stock is one million voting shares, no par value.
- Government subscribes to 550,000 shares at P200 each; private sector may subscribe to 450,000 shares.
- Voting power of government shares vested in the President or his designee; private shares voted by the stockholders.
Board of Directors and Governance
- Composed of 5 members: 3 government-appointed, 2 privately elected shareholders.
- Directors serve one-year terms.
- Board duties include approving budgets, allocating earnings for socio-civic projects, designating depository banks, submitting annual reports to the President.
Affiliation and Regulatory Authority
- All gambling entities with PAGCOR contracts/franchise must register and affiliate with PAGCOR.
- PAGCOR exercises regulatory powers akin to the Securities and Exchange Commission over affiliated entities (except original incorporation).
Franchise Grant and Duration
- PAGCOR granted a 25-year renewable franchise to operate casinos, clubs, amusement places, and sports pools within the Philippines.
- Authorized to enter management contracts, purchase foreign exchange for casino needs, and acquire/lease public or private land and maritime facilities.
Financial and Operational Conditions
- Government receives 50% of gross earnings after 5% franchise tax; if gross earnings fall below P150 million, government share increases to 60%.
- Earnings allocated to Metro Manila infrastructure and socio-civic projects, and possibly nationwide projects as directed by the President.
Tax and Customs Exemptions
- Importations for casino use exempt from customs duties and taxes.
- PAGCOR exempt from all taxes except a 5% franchise tax on gross revenue.
- Contracted operators and service providers benefit from similar tax exemptions.
- Dividend income to private shareholders subject to a 10% final tax, with exemptions if reinvested within six months.
Foreign Currency Transactions
- PAGCOR authorized to purchase and manage foreign exchange exclusively for casino operations.
- Only foreign citizens with valid travel documents may participate in foreign exchange gaming.
- Casino foreign exchange operations must comply with existing foreign exchange regulations and be overseen by a designated commercial bank agent.
Operational Limitations and Player Eligibility
- Casinos may operate anytime, located on land or water.
- Players allowed: tourists, foreigners, residents earning at least P50,000 annually, and limited number of guests.
- Prohibited players: government officials, members of armed forces, persons under 21, and students.
Government Audit and Oversight
- Commission on Audit or designated government agency appoints auditor for PAGCOR.
- Audit scope limited to franchise tax and government share of earnings.
Personnel and Civil Service Exemption
- All PAGCOR positions exempt from Civil Service Law.
- Board of Directors sets personnel policies.
- Casino employees classified as confidential appointees.
Transitory Provisions
- PAGCOR inherits assets, liabilities, contracts, and personnel from earlier decrees.
- Separated employees entitled to severance pay up to 24 months plus benefits.
Repealing and Separability Clauses
- Inconsistent laws and regulations are repealed or amended.
- If any provision is invalidated, other provisions remain effective.
Effectivity
- The decree takes immediate effect upon issuance.