Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
SIXTEENTH CONGRESS

First Regular Session

HOUSE BILL NO.2743

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D. ROMUALDO.

EXPLANATORY NOTE

Several bills were filed in the 15” Congress seeking to amend Presidential Decree No. 1869, as
amended, commonly referred to as the charter of the Philippine Amusement and Gaming
Corporation (PAGCOR). These bills, in the main, sought to remove from the PAGCOR the authority
to grant franchises and licenses for the establishment and operation of gaming enterprises.
Consequently, persons who then wish to engage in such an enterprise must first obtain a franchise
from Congress. One of these bills was House Bill (HB) No. 5359 filed by the late Representative
Pedro P. Romualdo. The aforementioned bills were deliberated upon by the Committee on
Legislative Franchises, which prepared and presented for the consideration of the House of
Representatives a substitute bill, HB No. 5682. This bill was approved on third reading on 5 March
2012 and was transmitted to and received by the Senate on 8 March 2012. Unfortunately, the
Senate failed to take action on the matter.

This bill was patterned after and fashioned from HB No. 5682. Under this proposed measure, the
PAGCOR may issue licenses to operate gaming establishments; however, a prospective gaming
operator must first obtain a franchise from Congress. Unless and until the prospective gaming
operator is granted a legislative franchise, the PAGCOR cannot issue a license to operate.
Nonetheless, this bill provides that existing gaming franchises, licenses, contracts, and other similar
arrangements granted by or entered into by the PAGCOR shall remain unimpaired and shall
Continue in full force and effect until they expire or the term of the PAGCOR’s own franchise to
establish, operate, regulate, and issue licenses to operate to gaming establishments expires,
whichever comes earlier.

Gambling is widely considered to be reprehensible and even immoral. On the other hand, it is a
reliable source of revenue for the Government and a significant source of funding for social and
development projects and programs. Allowing the operation of gaming establishments in the country
is thus a policy question that involves a delicate balancing of interests, which should be decided by
the Members of Congress, who represent and are accountable to the people.

In view of all the foregoing, the support of the Members of Congress for the prompt and timely

passage of this measure is earnestly sought.

XAVIER JESUS “XJ” D. ROMUALDO.



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
SIXTEENTH CONGRESS
First Regular Session

House BILL Ne 243

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D. ROMUALDO.

AN ACT FURTHER
AMENDING PRESIDENTIAL DECREE NO. 1869 AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 3 of Presidential Decree No. 1869, as amended, is hereby further amended to
read as follows:

Section 3. Corporate Powers. ~ The Corporation shall have the following powers and

functions, among others:

(a) to presoribe its By-Laws;

(b) to adopt, alter, and use a corporate seal;

(c) to own real or personal property, to sell, alienate, mortgage, encumber, or
otherwise dispose of the same;

(a) to make contracts and to sue and be sued;

(e) to employ such officers and personnel as may be necessary or proper to carry on
its business;

() to acquire, lease, or maintain, whether on land, water, or air, personal property and
such other equipment and facilities as may be necessary or proper to carry out its
purposes;

(g) to import, buy, sell, or otherwise trade or deal in merchandise, goods, wares, and
objects of all kinds and descriptions that may be necessary or proper to carry out
the purposes for which it has been created;

(h) to enter into, make, conclude, perform, and carry out contracts of every kind and
nature and for any lawful purpose which are necessary, appropriate, proper, or
incidental to any business or purpose of the PAGCOR; [-ineluding-but net limited to
investment s,—joint_venture—ag ts, gement-agreements,
ageney_agreements,—whether_as-principal_or-as—an—agent, -manpower-supply



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SEC.

SEC.

(to borrow money from local or foreign sources as may be necessary or proper for
its operations;

@) to invest its funds as the Corporation may deem necessary or proper in any activity
related to its principal operation, including in any bonds or securities issued or
guaranteed by the Government of the Philippines;

(k) to perform such other powers and functions as may be provided by law; and

()) to do anything and everything necessary, proper, desirable, convenient or suitable
for the accomplishment of any of the purposes 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.

PROVIDED, THAT, NONE OF THE POWERS STATED ABOVE SHALL BE
UNDERSTOOD AS GIVING AUTHORITY TO PAGCOR TO GRANT LICENSES,
CONTRACTS, OR OTHER SIMILAR ARRANGEMENTS TO PRIVATE PERSONS OR
ENTITIES FOR THE ESTABLISHMENT OR OPERATION OF ANY GAMBLING OR
GAMING ENTERPRISE WITHOUT THE LATTER FIRST BEING GRANTED A
FRANCHISE FROM CONGRESS,

2, Section 8 of the same Decree is hereby amended to read as follows:

Section 8, Registration. ~ All persons primarily engaged in THE gambling OR GAMING.
BUSINESS, together with their allied businessES, with A [contract-orfranchise]
LICENSE TO OPERATE from the Corporation, shall OBTAIN A LEGISLATIVE
FRANCHISE BEFORE THEY CAN register and affiliate their businesses with the
Corporation. The Corporation shall issue the corresponding certificates of affiliation
upon compliance by the registering entity with the promulgated rules and regulations

thereon.

3. Section 10 of the same Decree, as amended, is hereby further amended to read as follows:


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SEC. 4. Non-Impairment of Existing Franchises, Licenses, and Contracts. — All franchises, licenses,
contracts, and other similar arrangements granted by or entered into by the Philippine Amusement
and Gaming Corporation (PAGCOR) with private individuals or entities for the establishment,
operation, and maintenance of gambling casinos, gaming clubs, and other similar recreation or
‘amusement places devoted to gambling and the playing of games of chance before the effectivity of
this Act shall remain in full force and effect until their expiration: Provided, that these shall not
exceed the term of the PAGCOR's franchise, Thereafter, such licenses, contracts, and other similar
arrangements shall not be renewed or extended, unless the licensee, contracting party, or grantee,
as the case may be, is granted a legislative franchise by Congress: Provided, further, any such

franchise may, by law, be altered, amended, or repealed when the common good so requires.

SEC. 5. Separability Clause. - If any provision of this Act is declared invalid or unconstitutional, the

other provisions not affected thereby shall remain in full force and effect,
SEC. 6. Repealing Clause, — All laws, decrees, executive orders, proclamations, rules and
regulations, and other issuances or parts thereof, which are inconsistent with the provisions of this

Act are hereby repealed or modified accordingly.

SEC. 7. Effectivity Clause. - This Act shall take effect immediately after its publication in two (2)

newspapers of general circulation.

Approved,