Estrada, associates monopolize gambling

Glenda Gloria (Philippine Center for Investigative Journalism)

(Conclusion)

Friends and allies of Pre-sident Estrada have mono-polized the most lucrative gambling operations in the country, ranging from casinos to jai alai and bingo. If left unabated, the proliferation, with presidential encouragement, of gambling activities could make the Philippines the gambling capital of Southeast Asia.

Two of the companies granted gambling licenses — Power Management and Consultancy Inc. (PMC) and Best World Gaming and Entertainment Corp. (BW Gaming) — are directly linked to President Estrada and have been dragged into the ongoing impeachment trial against him.

Another company, Belle Corp., has as one of its directors a known close friend of the President, Jaime Dichaves. Belle likewise owns the exclusive Tagaytay Highlands, where three of Mr. Estrada’s supposed mansions are located.

PMC, owned by controversial presidential friend Charlie "Atong" Ang, is a dummy corporation for the President, according to
Ilocos Sur Gov. Luis "Cha-vit" Singson. One of the board directors of PMC, Victor Jose Uy, is named as an operator of masiao (illegal numbers game whose winning numbers are derived from jai alai results) in the watch list on illegal gambling prepared by the Philippine National Police (PNP).

"Uy is based in Manila but has always been on the PNP watchlist on masiao lords as Vic-Vic Uy. He acts as front for Ang," says a senior police official.

PMC bagged the consultancy to manage jai alai and Bingo-2 Ball. The Supreme Court recently declared illegal the continued operations of jai alai. It was Belle which won the franchise to operate jai alai, with PMC acting as its management consultant.

On the other hand, BW Gaming, owned by presidential crony Dante Tan, is a subsidiary of Best World Resources, which has been linked to a scam that rocked the stock exchange late last year. The President stands accused of having intervened in the probe on BW in an effort to spare Tan.

Six months after Mr. Estrada assumed office in 1998, BW Gaming won the exclusive contract to operate on-line bingo as well as to introduce Quick Pick-2, which is very similar to jueteng.

Alice Reyes, chairwoman of the Philippine Amusement and Gaming Corp. (Pagcor), later told a congressional hearing that BW Gaming got the on-line bingo license because "it had the endorsement of the Office of the President."

Pagcor by that time already had a cozy relationship with BW. As soon as Mr. Estrada took his oath of office in June 1998, Pagcor signed an agreement with BW, promising to transfer its corporate offices and three casinos to Sheraton Manila, BW’s planned entertainment and gaming complex in Manila.

A year later, Mr. Estrada inaugurated the first online bingo outlet at the Tutuban Mall in Divisoria, Manila.

BW Gaming claims in its corporate papers that it intends to be the leader in Southeast Asia in the gaming and entertainment industry by, among other things, acquiring state-of-the-art gaming equipment.

Also in November 1999, BW formed the Manila Jumbo Palace Inc. that was envisioned to operate a restaurant-cum-casino similar to the floating casino restaurant of Macau’s gambling tycoon Stanley Ho. One of Ho’s major partners in the Manila floating casino-restaurant is Dante Tan.

JV too?

Another firm that has ventured into gaming, AB Leisure Exponent Inc., was founded in 1994 by Alberto B. Benitez. The son of former human settlements deputy minister Jose Conrado Benitez, Alberto or Albee is a close friend and said to be a business partner of the President’s son, Jose Victor ‘JV’ Ejercito.

Under the Estrada administration, AB Leisure won a contract to operate commercial bingo halls and parlors nationwide. It acquired the business name Bingo Bonanza Co.

Company stockholder Raul Gerodias dismissed suggestions that the young Ejercito has a financial stake in AB Leisure. Gerodias is a senior partner at the De Borja Medialdea Bello & Gerodias law firm. "I know they (Benitez and JV Ejercito) are good friends. But JV is not a director, not a major stockholder," Gerodias said.

AB Leisure has retained the services of the De Borja law office, in which Edward Serapio, presidential assistant for political affairs, was a senior partner. Serapio has been named in previous PCIJ reports as the lawyer who formed shelf companies for the acquisition of real estate for the President’s families.

In June 1999, Benitez with lawyers Pablo de Borja and Gerodias formed the Dragon Gaming and Entertainment Corp. "Pero walang nangyari sa Dragon (Nothing came out of Dragon)," says Gerodias, also a stockholder of the firm. Last July, Benitez, along with Gerodias, also set up the Strategic Tabs and Games Exponent Inc., a leisure and gaming company.

Pagcor also granted the Sports and Games Entertainment Inc. (SAGE), a partner of AB Leisure Exponents, exclusive license to put up Internet gambling facilities in the country. SAGE launched its Internet casino last August. Henry Sy Jr., top official of SAGE, is a stockholder of AB Leisure.

Jai alai, masiao

Under the Estrada administration, jai alai – banned in 1986 by former President Corazon Aquino – was given a new lease on life. The Philippines is the only country in Asia that is host to the Basque sport.

In June 1999, Pagcor entered into a partnership with Belle Corp. and Filipinas Gaming Entertainment Totalizator Corp. (Filgame) to manage and operate jai alai. Among Belle’s directors is Dichaves, who has also fronted for the purchase of real estate, including the "Boracay" mansion in New Manila, Quezon City, for the President’s mistresses.

The Metro Manila Turf Club Inc., owned by Belle Corp., has also been granted a franchise to develop and operate a race track in Batangas and establish off-track on-line betting shops in any part of the country, SEC records show.

Late last year, Belle hired the services of Ang’s PMC to help manage jai alai. "At that time Atong and the President already had a falling out," recalls a gambler-friend of Ang’s for more than 10 years. "He was able to convince Ramon Lee (one of Belle’s directors) and Alice Reyes of (Pagcor that he can increase the earnings of jai alai to P10 million a day."

A confessed gambler, Ang has been known in illegal gambling circles as a masiao operator in Mindanao, according to former PNP chief Roberto Lastimoso. In a report on illegal gambling in the second quarter of this year, the PNP command in Central Visayas said Ang was monitored as having been at a meeting with masiao lords in Cebu in August where he reportedly proposed the legalization of masiao under Belle’s auspices.

Under his proposal, Ang said Belle will "act as financier and that (the) representative of Pagcor shall be appointed area manager" of legalized masiao, according to the declassified report. The report said masiao lords present in the meeting, some close associates of Ang, refused the planned legalization since "there will be shortfall in their usual proceeds of (sic) their income."

Ang’s proposal to legalize masiao in the Visayas coincided with the President’s approval of Ang’s Bingo-2 Ball, which Pagcor and Ang say was aimed at eradicating jueteng, the illegal numbers game that is rampant mainly in Luzon.

Bingo-2 Ball is very similar to jueteng except that the former will be under the strict supervision of Pagcor, according to Ang’s plan. Ang’s Power Management and Consultancy Inc. will get 23 percent from the daily earnings from Bingo-2 Ball, based on an agreement with Pagcor.

Full backing

Bingo 2-Ball was allowed to operate for close to a month – without any written contract with Pagcor – until Singson’s jueteng expose. Pagcor says Bingo 2-Ball generated P43 million from its Sept. 18 to 30 trial run.

Previously, it was BW that had bagged the contract to operate Quick Pick-2, a game very similar to jueteng. But Reyes said BW gave it up because it could not compete with the popular illegal numbers game.

This is not the first time that the government attempted to legalize jueteng by coming out with a legal game similar to it. During the Aquino administration, small-town lottery was introduced purportedly at the behest of a presidential relative. Later, with the sponsorship of the Ramos administration, lotto became popular.

But Ang had the open, full backing of Mr. Estrada and the PNP in Bingo-2 Ball. "Yung jai alai, kay presidente din yon (Jai-alai belongs to the President)," Singson said in an interview. "Hindi naman mabubuksan yon kung wala siya doon eh (It would never have been reopened without his backing)."

According to Lastimoso, Ang was in several meetings with local PNP officials to explain the need for them to operate against jueteng in order to pave the way for a "legal" activity, Bingo-2 Ball.

This was confirmed by a retired police general who now acts as security chief of a top politician from the North. "Even during Marcos, gambling was kanya-kanya (decentralized). This time it’s different. You have these conferences attended by a known illegal gambling operator and police officials," the general said.

After the decision to implement Bingo 2-Ball, the PNP had been relentless in its drive against jueteng. From January to September this year, the police conducted 8,411 raids in jueteng bailiwicks and arrested 11,562 people involved in the illegal numbers game, including police officials.

At the same time, PNP officials accommodated efforts of Ang’s team to fully explain to law enforcers how Bingo 2-Ball operates.

Sen. Raul Roco has said Pagcor virtually usurped its powers when it delegated to a private agency, in this case Ang’s PMC, the function of coordinating with the police and local government agencies the implementation of Bingo 2-Ball.

Ang’s Bingo-2 Ball angered Singson, who is known to tolerate jueteng in Ilocos Sur. "If you think about it, President Estrada is facing the worst crisis in his political life because of one man, Atong Ang, and one plot, Bingo-2 Ball," says a gambler-friend of Ang’s.

Tussle with Congress

Pagcor’s liberality in issuing gambling contracts has baffled Congress, which has the sole authority to grant franchise to private corporations. In fact, since 1987, Congress had rejected all applications for a gambling franchise by a private corporation.

After Singson’s expose, however, Mr. Estrada promised to privatize gambling and ordered Pagcor to suspend the gambling licenses it issued. But it is precisely under his term that gambling has been privatized at break-neck speed. And the gambling firms had said they would question the President’s order in court.

In quick succession, Pagcor issued a license to Belle to operate the jai alai fronton in Manila, then to SAGE for the management of on-line casino operations, and later, Ang’s firm was allowed to run Bingo 2-Ball without any contract. Except for Reyes, all eight other Pagcor board directors are Estrada appointees.

Congessmen went to the Supreme Court to question the jai alai license and the high tribunal recently declared the license illegal.

Also being probed in Congress is the license given SAGE. With the high court’s ruling against Belle in jai alai, Pagcor’s contract with SAGE should also be terminated, says Bukidnon Rep. Miguel Zubiri.

Pagcor’s charter allows it to regulate all games of chance authorized by existing franchise "or as permitted by law." To be sure, the liberal interpretation of Pagcor’s charter began under the Ramos government with the decision to set up private casinos in Clark (Mimosa) and Subic (Legenda), because these were located in special economic zones with international airports.

"Under Mrs. Aquino, we were quite conservative in our interpretation of our charter," said a director of Pagcor under the Aquino administration. "No casinos were allowed to operate as private entities and there were only eight casino branches nationwide."

Under Mr. Estrada, Pagcor "relaxed" its rules further and gave away gambling licenses to corporations, he said. Several Pagcor-run casinos were also put up in hotels.

Singson said this would not have been possible without the President’s imprimatur, Pagcor being directly under his office. "Lahat ng instruction ni President sinusunod niya (Reyes)," Singson said. "Pinag-uusapan namin eh. Hindi magbibigay ng license kung walang go-signal ang President (Reyes followed all of the President’s instructions. We would talk about these matters. No gambling license is ever issued without the go-signal of the President)."

Pagcor boasted, however, that its liberality has paid off. In 1999, the company reported earnings of P12.42 billion, exceeding its 1998 income by 3.6 percent.

Commercial bingo halls likewise proliferated under the Estrada administration, with Pagcor earning profits from 67 bingo grantees operating in 82 areas nationwide.

Pagcor collected a total of P564.64 million from these grantees in 1999, P33.77 million of which came from the on-line operations of BW Gaming. With its combined in-house and franchise bingo operations, Pagcor said it earned P935.32 million in 1999, nearly a 100 percent increase in its 1998 income from bingo.

Intelligence officials, however, see a link between privatized gambling with illegal activities. "Several of this new breed of gambling entrepreneurs are linked with organized smuggling activities," said a veteran intelligence agent. This is why the intelligence community has been on a tight watch over the private sector’s ventures into legal gambling.

"You must remember that legal and illegal gambling is the heartland of organized crime. That’s what the experience of other countries has shown. That’s what we fear is happening now in the country," the intelligence official noted.