Games and Amusements Board supervision
- Section 1 requires all races conducted by the grantee to be under the supervision and control of the Games and Amusements Board.
- Section 1 mandates the Games and Amusements Board to enforce laws, rules, and regulations governing horse racing, including Republic Act No. 309 as amended.
- Section 1 requires all racing officials and personnel employed by the grantee to be duly licensed by the Games and Amusements Board under Section five of Republic Act No. 309.
Franchise term and approval date
- Section 2 sets the term of the franchise at twenty-five (25) years.
- Section 2 provides that the 25-year term is computed from the date of approval of this Act.
- The Act is approved October 23, 1972.
Exclusive right to take bets
- Section 3 authorizes the grantee (or its duly authorized agent) to offer, take, or arrange bets within the premises where races are held and in other places where betting branches are duly established.
- Section 3 prohibits any other entity or person other than the grantee or its duly authorized agent from taking or arranging bets on any horse participating in races conducted by the grantee.
- Section 3 also prohibits any other person or entity from maintaining or using a totalizator or any other betting device, method, or system within the grantee’s premises or outside those premises in the course of races operated by the grantee.
Penalties for betting violations
- Section 4 penalizes any person found to have violated Section 3 with a fine of not less than PHP 2,000 but not more than PHP 5,000, or imprisonment of not less than one month but not more than six months, or both, at the Court’s discretion.
- Section 4 provides that if the offender is a corporation, partnership, or association, criminal liability devolves upon its president, managing partner, or manager responsible for the violation.
Required race control and integrity equipment
- Section 5 requires the grantee to provide specified mechanical and/or computerized devices to achieve orderly, clean, and honest horse racing.
- The required equipment includes:
- photo patrol and/or other electronic devices or camera;
- automatic starter;
- electric totalizator;
- photo finish devices;
- a machine connected to a computer in a display board for sale of daily double, llave forecast, and/or "quenella" tickets, including tickets sold from off-track stations;
- facilities or devices for tattoo-branding of horses for proper identification;
- facilities, laboratories and instruments for "test for drugs";
- weighing machines and devices for measuring horses;
- a modern sound system and loud speakers;
- facilities for safety, security, comfort, and convenience for the public;
- modern intercommunication devices; and
- other facilities, devices, or instruments that ensure clean, orderly and honest racing.
- Section 5 requires completion and installation of the listed equipment within three years from the approval of this Act.
- If the grantee fails to provide and install any required equipment within the three-year period, Section 5 directs that the Games and Amusements Board shall forthwith suspend and prohibit the holding of races until the required equipment is provided and installed.
Betting supervision and dividend controls
- Section 5 directs the Games and Amusements Board to assign auditors and/or inspectors to supervise and regulate:
- the placing of bets;
- the proper computation of dividends; and
- the distribution of wager funds.
Distribution of wager funds and breakage
- Section 6 requires distribution of wager funds or gross receipts from total sales of betting tickets during the entire racing day.
- Section 6 mandates that 84% be distributed as dividends to holders of betting tickets:
- in pari-mutuel or regular races, dividends go to ticket holders of win, place, and show horses; and
- for daily double, forecast and/or races, dividends go to ticket holders of winning combinations (including: two horses that won first place in the two races for daily double; and two horses that won first and second places for forecast/"llave" as the case may be).
- Section 6 requires the remaining 16% be distributed as:
- 8 1/4% as the grantee’s commission conducting the races;
- 6 3/4% for stakes or prizes of win, place and show horses and the authorized bonus for jockeys;
- 1/2% for the Jockeys and Horse Trainers, Injury, Disability and Death Compensation Fund created under Republic Act No. 309, as amended; and
- 1/2% as a special fund for use by the Games and Amusements Board to cover its expenses and other purposes authorized under Republic Act No. 309.
- Section 6 governs breakage (receipts from betting corresponding to fractions of less than ten centavos eliminated from the dividends) by requiring it be set aside as:
- 25% for the operations expenses of the Philippine Amateur Athletic Federation;
- 25% for charitable institutions within the Municipality of Makati; and
- 50% for the rehabilitation of drug addicts, as provided in Republic Act No. 6425.
Allowed racing days and limits
- Section 7 authorizes the grantee to hold horse races on all Saturdays, Sundays and official holidays of the year except official holidays where law expressly provides that no horse races are to be held.
- Section 7 permits the grantee to conduct races on the eve of any public holiday, starting not earlier than 5:30 in the afternoon, but not to exceed five days a year.
- Section 7 requires allocation of racing days to follow the rules in Republic Act No. 309, as amended.
Franchise tax and in-lieu-of taxes
- Section 8 requires the grantee to pay the National Treasury a franchise tax equal to 25% of its gross earnings from horse races authorized under the franchise.
- Section 8 provides that this is equivalent to 8 1/4% of the total wager funds or gross receipts from sale of betting tickets during the racing day, as mentioned in Section 6.
- Section 8 directs that the franchise tax be apportioned as:
- 5% to the National Government;
- 5% to the Municipality of Makati;
- 7% to the Philippine Charity Sweepstakes Office;
- 6% to the Philippine Anti-Tuberculosis Society; and
- 2% to White Cross.
- Section 8 requires payment of the tax monthly.
- Section 8 states the tax is in lieu of any and all taxes (except income tax) on the grantee’s properties (real or personal), whether barrio, municipality, city, provincial, or national, that would otherwise be levied, established, or collected—because the grantee is expressly exempted from those taxes.
Restrictions on transfer or assignment
- Section 9 prohibits the grantee from leasing, transferring, granting the usufruct of, selling, or assigning the franchise, or the rights or privileges under it, to any person, firm, company, corporation, or other commercial or legal entity.
- Section 9 prohibits the grantee from merging with another person, company, or corporation organized for the same purpose without prior approval of the Congress of the Philippines.
- Section 9 provides that any corporation to which the franchise is sold, transferred, or assigned must be subject to Philippine Corporation laws, whether existing or later enacted.
- Section 9 requires that the transferee (person, firm, company, corporation, or other entity) remains subject to all conditions, terms, restrictions, and limitations of the franchise as fully and completely as if the permit had been originally granted to it.
Incorporation and automatic repeal of inconsistent rules
- Section 10 incorporates Republic Act No. 309 to the extent it is not inconsistent with Republic Act No. 6632.
- Section 10 provides that any provisions of any Act, Executive Order, or Administrative Regulation that are inconsistent with Republic Act No. 6632 are automatically repealed.
Effectivity upon approval
- Section 11 provides that Republic Act No. 6632 takes effect upon its approval.
- The Act was approved June 17, 1972 by President Ferdinand E. Marcos.