Franchise for Hapi Jockey Club horse racing

The Philippine Racing Commission (PHILRACOM) supervises and regulates the conduct of races, including race scheduling, track safety, prize allocation, and race security as per Presidential Decree No. 420.
The Games and Amusements Board (GAB) retains authority over betting operations as stipulated in Republic Act No. 309.

Only the Grantee or its authorized agents may offer, take or arrange bets, including electronically and via off-track stations, on races conducted inside or outside the Philippines.
Unauthorized betting on races conducted by the Grantee is prohibited.

Violators face fines ranging from ₱20,000 to ₱100,000, imprisonment up to six months, or both.
If the offender is a corporate entity, liability attaches to responsible officers.

The Grantee is authorized to implement mechanical, electrical, and computerized technologies essential to efficient operations such as:
- Photo patrol, automatic starters, computerized totalizators, and photo finish devices.
- Facilities for horse identification, drug testing, weighing, and measurement.
- Telecommunications and broadcasting equipment for live race and betting information.
- Backup power systems and any other devices ensuring safety, security, and fair racing.
PHILRACOM may suspend races if required facilities are not installed within three years.
GAB personnel will supervise betting and dividend distribution.

The Grantee must clearly publish and display terms and conditions for betting ticket sales in appropriate locations.

82% of gross receipts go as dividends to winning ticket holders.
8.5% allocated for horse prizes and jockey bonuses.
0.5% allocated to PHILRACOM; in pari-mutuel races, this goes to GAB and the Jockeys and Trainers' Compensation Fund.
0.5% allocated for drug testing and facility rehabilitation.

Breakage (fractional amounts under ₱0.10) is allocated as follows:
- 50% to PHILRACOM for additional race prizes and horse breeding activities.
- 25% to hospitals in the racetrack locality.
- 25% to drug rehabilitation centers as per the Comprehensive Dangerous Drugs Act.

Authorized to hold races at least twice weekly, including all Saturdays, Sundays, and official holidays except those prohibiting races by law.
May hold up to five days of races on the eve of public holidays starting no earlier than 5:30 PM.
Race days allocation follows Republic Act No. 309 provisions.

The Grantee must pay:
- Documentary Stamp Tax on betting tickets at specified rates based on ticket cost.
- Franchise Tax: 25% of gross earnings from authorized horse races, divided among national government, local government units, municipal hospitals, and charitable organizations.
- Exemptions from other property taxes except income tax.
- Taxes assessed monthly, subject to audit under the National Internal Revenue Code.
Winnings tax imposed on recipients at 10% (or 4% for certain bets), exempting amounts ₱10,000 or less.
Operators must withhold and remit taxes within 20 days.

Franchise valid for 25 years from effectivity.
Revoked automatically if Grantee fails to:
- Begin operations within three years of operating permit approval.
- Begin operations within five years of the law’s effectivity.
- Operate continuously for at least two years.

Grantee absolves national and local governments from claims arising from injuries or property damage during construction or operation.

Franchise or controlling interest cannot be sold, leased, transferred, or assigned without Congressional approval.
Disclosure to Congress required within 60 days post-transaction.
Failure to report results in ipso facto revocation.
New holders are subject to same conditions.

Grantee must offer at least 30% of outstanding capital stock via Philippine securities exchanges within five years.
Alternative public participation methods required if public offering is not applicable.
Noncompliance results in ipso facto revocation.

Annual reports must be submitted to Congress by April 30 each year, including operations updates, audited financials, and certifications from PHILRACOM and GAB.
The report is prerequisite for permit applications and operations certifications.

Any horse racing franchise advantages granted elsewhere apply equally to the Grantee, excluding territorial coverage, term, or service type.

Invalidity of any provision does not affect the validity of remaining provisions.

Inconsistent laws, decrees, orders and regulations are repealed, amended, or modified accordingly.

The Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.