House probes PAGCOR issuance of e-games provisional accreditation

The House committee on games and amusement has asked PhilWeb Inc., the dominant service provider for internet cafes of the Philippine Gaming Corporation (PAGCOR), to submit its financial statement for the last five years in the next hearing of the committee, in view of the under-remittance to the government by PAGCOR.

Per the Commission on Audit (COA) 2015 Annual Audit Report on the Bureau of Treasury, PAGCOR's remittance to the BTr fell short by 24.053 billion from 2011 to 2014, which is well within the operative years of PhilWeb Inc.'s Intellectual Property License and Management (IPLM) Agreement with PAGCOR.

PAGCOR attributed the under-remittance to the varied interpretation of "gross earnings" by the COA and PAGCOR.

The committee is conducting an inquiry, in aid of legislation, on the procedure of PAGCOR in granting provisional certificates of accreditation to electronic gaming system (EGS) service providers and the manner of selecting and awarding the privilege to operate internet gaming cafes.

It was learned during the hearing that businessman Roberto Ongpin has sold his 53.76 percent stake in gaming technology provider Philweb Inc. to Gregorio Araneta for P2 billion.

Rep. Gus Tambunting (2nd District, ParaAaque City), committee chair, said the committee was interested to know the status of PhilWeb Inc., especially on how it was able to secure a third party audit service provider for e-games.

Based on House Resolution 1394, the service provider for the internet cafes dedicated to casino gaming is mandated to be selected in accordance with Republic Act 9184 or the Government Procurement Reform Act.

Oaminal said PhilWeb had become the dominant service provider for internet cafes of PAGCOR for 13 years, this after its IPLM Agreement expired on August 10, 2016.

When President Rodrigo Duterte assumed office, he declared war on on-line gaming for not remitting the correct taxes and later on reconsidered his decision to stop on-line gaming operations on the condition that correct taxes should be paid.

With regards to the under-remittance of government share, Commission on Audit (COA) cluster director Wilfredo Agito said upon their confirmation with the Bureau of Treasury, the financial documents that they gathered from PAGCOR showed there were four additional years of under-remittance from 2006 to 2010 .

These documents are part of our earlier position paper that we are reiterating now. These additional documents show that the computation of under remittance to the national government for the years 2006 to 2010, in addition to our earlier submission from 2011 to 2016, said Agito.

It appears that COA is standing firm with their position on the under-remittance made by PAGCOR in this particular issue, said Oaminal.

PAGCOR assistant vice president Atty. Arnold Salvosa said they were standing firm on the position paper they submitted to the committee.

Per the COA 2015 Annual Audit Report on the Bureau of Treasury, PAGCOR's remittance to the BTr fell short by 24.053 billion from 2011 to 2014, which is well within the operative years of PhilWeb Inc.'s IPLM with PAGCOR.

PAGCOR attributed the under-remittance to the varied interpretation of "gross earnings" by the COA and PAGCOR.

After the President's pronouncements, PAGCOR rejected PhilWeb's last-minute appeal to renew its IPLM. But PAGCOR eventually issued a provisional certificate of accreditation to PhilWeb last August 18, 2017.

Salvosa said former president Corazon Aquino created a task force consisting of the Department of Justice (DOJ), COA and former Congressman Carmelo Lazatin, particularly to look into the income of the government in the casinos.

He further said there was no irregularity or issue that was discovered by the task force regarding the remittance of PAGCOR being limited only to the casino income.

The committee then asked PhilWeb officials to submit the company's financial statement for the last five years.

Source: House of Representatives

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