Creation of National Gaming Commission

Core functions and regulatory powers

Section 2 requires the Commission to grant permits to qualified persons to operate gaming activities authorized by law, based on the Commission’s rules and regulations.
Section 2 authorizes the Commission to revoke permits when the gaming activities, under the Commission’s rules and regulations, justify revocation.
Section 2 mandates the Commission to supervise and regulate all gaming authorized by law (including protection of the betting public and promotion of tourism), expressly covering casino gambling, horse racing, jai alai and cockfighting.
Section 2 empowers the Commission to authorize the use of gaming equipment, paraphernalia, and other facilities by gaming establishments.
Section 2 empowers the Commission to prohibit the use of improper devices, drugs, stimulants, and other means that artificially affect game results.
Section 2 authorizes the Commission to suspend or revoke a license or permit for a reasonable cause.
Section 2 directs the Commission to prepare its budget and to fix the number and compensation of its personnel in accordance with law.
Section 2 empowers the Commission to recruit, appoint, suspend, or terminate personnel in accordance with law.
Section 2 allows the Commission to delegate licensing and regulating powers over cockfighting to any national or local agency.
Section 2 empowers the Commission to issue rules and regulations necessary to carry out the Decree.

Jurisdiction over authorized gaming

Section 3 sets the Commission’s jurisdiction to cover all forms of authorized gaming.
Section 3 places sweepstakes races and lotteries under the jurisdiction of the Philippine Charity Sweepstakes Office.
Section 3 places boxing, wrestling and professional basketball under the jurisdiction of the Games and Amusement Board.

Initial funding and appropriation

Section 4 appropriates P1,000,000 from the National Treasury not otherwise appropriated for the initial year of operation of the Commission.
Section 4 provides that thereafter, the amount necessary for operation shall be included in the annual appropriation.

Casino taxes and permit fees

Section 5 imposes taxes and fees collected from the grantee.
Section 5 requires an initial permit fee of P1,000,000.
Section 5 requires an annual permit fee of not less than P50,000 nor more than P200.000, to be determined by the Commission.
Section 5 imposes a weekly fixed tax, consisting of:
- (1) not less than P2,000 nor more than P5,000 for each type of game per table; and
- (2) not less than P300 nor more than P500 for each slot machine or similar devices, to be determined by the Commission.

Tax on chips and casino betting controls

Section 6 imposes a tax on every sale of chips by the casino operator to a player.
Section 6 sets the chips tax at five per centum (5%) of the value of the chips sold.
Section 6 provides that the chips tax is in lieu of income tax for which the player may be liable on winnings.
Section 6 requires that no bets be allowed in the casino except through chips purchased from the Cashier’s box inside the casino.
Section 6 prohibits casino operators and players from buying chips on the gaming table.
Section 6 prohibits casino chips being borrowed from another player inside the casino.

Casino gaming employees’ annual license fees

Section 7 imposes an annual license fee of P75 on every casino manager and pit boss.
Section 7 imposes an annual license fee of P50 on every dealer and other similar gaming employee of the casino.

Player annual license fee and qualification rules

Section 8 imposes a player’s annual fee of F500 on every person who enters and takes part in gambling games in the casino.
Section 8 requires the Commission to prescribe the qualifications of persons who may apply for a player’s license.
Section 8 prohibits issuance of a player’s license to a person whose annual net taxable income, as shown by the latest income tax returns, is less than P50,000.
Section 8 allows a tourist from broad to enter and play in the casino without complying with the income/tax qualification requirements, upon presentation of a valid passport.

Payment timelines, penalties for nonpayment, and collection mechanics

Section 9 requires the grantee to file a true and complete return of types of games per table and slot machines or similar devices under Section 5(b).
Section 9 requires the grantee to pay the tax to the Bureau of Internal Revenue on or before the first business day of the following week.
Section 9 constitutes the grantee as a withholding agent for collecting the Section 6 chips tax.
Section 9 requires the grantee to submit a weekly return of the amount of chips sold and remit the chips tax due to the Bureau of Internal Revenue on or before the first business day of the following week.
Section 9 requires all taxes and fees under Sections 5(a), 7, and 8 to be paid to the Bureau of Internal Revenue on or before the 31st of January.
Section 9 imposes 25% additional tax (increment “to be a part of the tax”) if the tax or fee is not paid within the prescribed time.
Section 9 imposes interest of 14% per annum from the original due date if the tax or fee is not paid on time.
Section 9 adds a surcharge of 50% of the tax or deficiency tax for willful neglect to file the return within the period prescribed or for a willfully made false or fraudulent return, when payment has been made on the basis of such returns before discovery.
Section 9 requires collection of the added surcharge at the same time and in the same manner as part of the tax unless the tax was already paid before discovery of falsity or fraud, in which case the added amount is collected in the same manner as the tax.

Revenue apportionment

Section 10 requires apportionment of proceeds from taxes, fees, and licenses collected under the Decree.
Section 10 allocates the taxes under Section 5 to the Metropolitan Manila Authority.
Section 10 allocates the proceeds of the taxes and fees under Sections 6, 7 and 8 to the National Government.

Importation of gaming paraphernalia and devices

Section 11 prohibits importation of gaming paraphernalia and devices except when importation is made by the grantee for its exclusive use in the casino and is duly authorized by the Commission.
Section 11 requires the imported items to be subject to a tariff duty of 100% ad valorem of the dutiable value.
Section 11 requires the imported items to be subject to a 70% compensating tax.
Section 11 provides that existing laws inconsistent with these taxes on importation do not prevail.

Recordkeeping, invoices, and inspection

Section 12 requires the grantee to keep books of accounts and other accounting records for daily transactions.
Section 12 requires the grantee to issue invoices or receipts for every sale of chips.
Section 12 requires that books and accounting records, invoices, or receipts be duly registered with the Bureau of Internal Revenue.
Section 12 provides that the registration and related requirements follow Sections 334 to 337 of the National Internal Revenue Code and the regulations thereunder.
Section 12 requires the books, records, invoices, or receipts to be open for inspection and examination by the Commission and the Bureau of Internal Revenue.

Criminal penalties for violations

Section 13 imposes criminal penalties on any person who violates rules and regulations promulgated by the Commission under the Decree.
Section 13 provides that conviction results in a fine of not less than P2,000 nor more than P5,000 and imprisonment of not less than one year nor more than three years.
Section 13 provides that if the offender is a juridical person, the penalties are imposed on its President or Vice President, or the officer or officers responsible for the offense.
Section 13 provides that if the offender is an alien, after payment of the fine and service of the sentence, the alien suffers additional penalty of deportation without the necessity of further proceedings instituted by the Commission on Deportation and Immigration.

Transitory turnover of regulatory functions

Section 14 provides that, pending issuance of implementing letters of instructions to effect turnover of functions, the Games and Amusements Board, the Philippine Racing Commission, and agencies presently regulating cockfighting continue performing their respective functions.

Repeals and effectivity

Section 15 repeals or modifies all Acts, Decrees, Executive Orders, proclamations, rules and regulations, or parts thereof, inconsistent with the Decree’s provisions.
Section 16 states the Decree takes effect upon approval.
Date and signature: The Decree is July 09, 1976, signed by FERDINAND E. MARCOS as President of the Philippines, with JACOBO C. CLAVE signing by the President.