Cagayan gaming firm, Pagcor present sides

Nearly P2 billion more in casino earnings for sports development were diverted to two other prominent figures in 2007 to 2011. That’s separate from the P937 million that, documents show, went to one “Alan La Madrid Purisima.”

The payer identified by its letterhead is the First Cagayan Leisure and Resort Corp. The P1,752,646,976.05-total that went to the two persons were in monthly payments “representing five percent of casino operations.”

Sources of the papers say the funds should have gone instead to the Philippine Sports Commission (PSC). R.A. 6847, the 1990 law that established the PSC, entitled it to five percent of gross revenues of the state-owned Philippine Amusement and Gaming Corp. (Pagcor).

Pagcor has 11 in-house casinos and 14 private licensees. PSC financial reports to the Commission on Audit show that it receives the five-percent share for sports only from Pagcor’s 11 in-house units.

PSC insiders say that the five percent from the 14 licensees are withheld from the agency, one reason for the dismal growth of sports. “Incomplete funds equals incomplete athletes,” one remarks.

Details will have to wait for later. For fair play and balance, this space gives way to a rejoinder from First Cagayan. I reported the on-line gaming outfit Monday to have paid the P937,424,003.85 to “Purisima.” (see http://www.philstar.com/opinion/2016/03/02/1558607/purisima-collected-p1-b-casino-whom).

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From Atty. Bienvenido M. Santiago:

“We write on behalf First Cagayan Leisure and Resort Corp. in connection with the article entitled, ‘’Purisima’ collected P1B from casino – but for whom?’ FCLRC clarifies that it is not in anyway involved in the transactions attributed to it. Contrary to allegations in your article, FCLRC is not a licensee of Pagcor, and it does not own or operate a casino. It is therefore not under any legal obligation to make any mandatory or regular payments or contributions to Pagcor or the Philippine Sports Commission as erroneously stated in the article.

“FCLRC does not have any transaction whatsoever with a person named Alan La Madrid Purisima or the PSC. FCLRC did not make any payments to Purisima for any reason whatsoever, much less the alleged P937,424,003.85. FCLRC categorically denies having made or issued the alleged forty-one acknowledgment receipts on its letterhead covering the alleged payments to Mr. Purisima.

“FCLRC is a majority-owned subsidiary of Leisure and Resorts World Corp., listed in the Philippine Stock Exchange. As a subsidiary of a publicly listed company, FCLRC observes full transparency in all of its transactions and strictly follows guidelines on good governance. FCLRC is not and cannot be involved in any anomalous transactions as alleged in the article.

“Mr. Alfredo B. Benitez is not an officer or a member of the Board of Directors of FCLRC. He is a member of Congress, representing the 3rd District of Negros Occidental since 2010. He has no authority to represent FCLRC or to sign any document on its behalf particularly during the years when the alleged transactions with the PSC and Mr. Purisima took place.

“Considering the foregoing, may we respectfully request that a retraction on the reference to FCLRC and Mr. Benitez in your column be made as soon as possible to avoid any undue damage to our company and to Mr. Benitez.”

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Odd that Attorney Santiago wants me to retract in behalf of FCLRC and Congressman Benitez. Didn’t he just say that the latter is not an officer or board member, hence no authority to sign?

Santiago is a director of the mother Leisure and Resorts World Corp. Its chairman Reynaldo P. Bantug is the uncle of Rep. Benitez; Jose Conrado Benitez, the congressman’s father, was a director till his passing in Sept. 2015.

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Another rejoinder from Pagcor’s Maricar L. Bautista, Assistant VP for Corporate Communications:

“FCLRC is not regulated by Pagcor.  Its operation is under the jurisdiction of Cagayan Economic Zone Authority, a government owned and controlled corporation that was created in 1995 by R.A. 7922.

 “Since R.A. 6847 (PSC Income Share) was enacted into law, Pagcor has been consistently remitting its income share directly to the PSC.

“From 1990 to 2015 Pagcor has remitted a total of P11.13 billion to PSC. Pagcor’s contributions to PSC under the Aquino administration (July 2010-Dec. 2015) also ballooned to P3.9 billion – a P1.05-billion jump from the total remittance of P2.85 billion given by the former Pagcor management (Jan. 2005-June 2010).”

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Let’s first get a fix on the figures. PSC’s financial reports to the Commission on Audit show only P3.7 billion, not P3.9 billion received from Pagcor during the P-Noy tenure.

That Pagcor disavows control over FCLRC is another oddity. For, its Charter (P.D. 1869) states among its objectives: “To make Pagcor’s regulatory powers more effective, it is necessary that businesses primarily engaged in gambling operations be affiliated with Pagcor and become subject to its regulatory powers with respect to operation, capitalization and organizational structure.”

Section 1 elaborates: “Declaration of Policy. — It is hereby declared to be the policy of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by law in order to attain the following objectives:

“(a) To centralize and integrate the right and authority to operate and conduct games of chance into one corporate entity to be controlled, administered and supervised by the Government...”

Section 3 is the catch-all: “Corporate Powers. — The Corporation shall have the following powers and functions, among others:

“...l) to do anything and everything necessary, proper, desirable, convenient or suitable for the accomplishment of any of the purpose or the attainment of any of the objects or the furtherance of any of the powers herein stated, either alone or in association with other corporations, firms or individuals, and to do every other act or thing incidental, pertaining to, growing out of, or connected with, the aforesaid purposes, objects or powers, or any part thereof.”

In short, Pagcor must regulate all, whether brick-and-mortar casinos or on-line gaming. The CEZA law established a free-trade zone but did not alter Pagcor’s Charter. It is the surrender of Pagcor’s regulatory power that causes multibillion-peso leakages of revenues for sports into the hands of interlopers.

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