THE Supreme Court En Banc, in a unanimous Decision penned by Senior Associate Justice Marvic M.V.F. Leonen, has ordered the Philippine Amusement and Gaming Corporation (PAGCOR) and Philippine Charity Sweepstakes Office to remit a portion of their income for the funding of the Philippine Sports Commission (PSC).
Josseler “Yeng” M. Guiao, former member of the House of Representatives (HOR) and vice chairperson of the HOR Committee on Youth and Sports Development, filed a petition for mandamus to compel PAGCOR, PCSO, and the Office of the President (OP) to remit funds to the PSC under Republic Act No. (RA) 6847, or the law creating the PSC. The non-remittance caused lack of funding for sports development projects.
Guiao claims that PAGCOR failed to comply with the funding requirements under Section 26 of RA 6847, specifically the automatic remittance of 5% of PAGCOR’s gross income to the PSC for the National Sports Development Fund. Guiao also claimed that PCSO failed to remit 30% representing the charity fund of the proceeds of six sweepstakes or lottery draws per year since 2006.
PAGCOR, on the other hand, argues that the PSC is not entitled to the full five percent of PAGCOR’s gross income as PSC’s share is still subject to deductions for the payment of 5% franchise tax, 50% share of the national government, and 10% subsidy to the National Power Corporation.
The PCSO for its part claims that PSC’s allocations are sourced from sweepstakes draws, not from lotto games.
The Court granted Guiao’s petition.
As to PAGCOR, the Court held that the remittance required under RA 6847 is unqualified, as the law does not state that the allocation to PSC is subject to deductions.
As to PCSO, the Court ruled that “lottery” has three elements: consideration, prize, and chance. Based on this definition, lottery as stated in the law covers the lotto draws conducted by the PCSO.
The Court thus ordered PAGCOR to account and remit the full amount of 5% of its gross annual income from 1993 to the present in favor of the PSC.
The Court also ordered PCSO to account and remit to the PSC 30% representing the charity fund of the proceeds of six sweepstakes or lottery draws per year, including its lotto draws from 2006 to the present. / Supreme Court PR