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

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__ 4956

INTRODUCED BY REPRESENTATIVE PEDRO P. ROMUALDO

EXPLANATORY NOTE

The Philippine Charity Sweepstakes Office came into existence by virtue of Act
No. 4130 approved in March 1935 replacing the National Charity Sweepstakes.
Republic Act No. 1169, as amended by Batas Pambansa Big. 42 and Presidential
Decree No. 1157 were passed to strengthen and expand the capability of this
Office as the principal office mandated for raising and providing funds for
health programs, medical assistance and services, and charities of national
character.

Through ils 76 years of existence, the Philippine Charity Sweepstakes Office has
contributed to the coffers of the govemment from the receipts of its
sweepstakes operations. It was only after fifty (50) years of implementing the
tradifional sweepstakes that this Office has decided to introduce new
innovations in the number games in 1995 similar to what was being
implemented abroad. While it has drawn multitude of followers since its
operation, the “charity purpose" for spending a small amount for the tickets
have significantly changed the mindset and values of the people with the
introduction of these innovative games of chance such as the Instant
Sweepstakes, the Small Town Lottery, the Online Lottery varieties which includes
the Suertres Lotto and EZ2 Lotto.

Every day poor people are enticed to purchase the different lotto games and
they patiently queue on long lines using their hard-earned money fo bet on the
various lotto games instead of using these funds to purchase their basic
necessities like food, water, medicines and tuition for their children. This
gambling culture has seeped into the minds of many people especially the
marginalized people that the only solution to their problem is not to work hard
but just bet a mere ten pesos (P\ \10.00) or twenty (P\ 20.00) pesos and they
can be instant millionaires and then it would solve a lot of their problems.
Gambling also promoted the commission of crimes, like thievery just to have
money to bet in the lotto. Do we continue to promote this kind of gambling
addiction? The government has become a big gambling operator which licks
the poor of their money instead of providing them with adequate social
resources fo improve their quality of life.


the poor of their money instead of providing them with adequate social
resources to improve their quality of life.

It is for this reason that we are introducing these amendments which dwells on
reverting back to the traditional Sweepstakes draws and fo permanently stop
the online lotto operations. We strongly believed that the illegal numbers game
will dissipate if the Suertres Lotto and other PCSO Numbers-game will no longer
be implemented. Gambling has been in existence since time immemorial but
today it has grown into an industry worth billions of pesos if we combined other
kinds of gambling. It is hoped that the unconscionable betting of online lotteries
by many poor people will change and a shift to a more responsible and charity
contribution will ensue. The Board can continue to introduce reforms to the
traditional sweepstakes and utilize sill existing franchise outlets in promoting
these sweepstakes draws.

Aside from taking off this kind of lottery in the mandate of the PCSO, we are
also expanding the number of members of the PCSO Board to enable equal
representation from Luzon, Visayas and Mindanao to sit on the Board and tackle
problems besetting these areas which require also equal attention and concern
by the PCSO.

Included in this proposal is the increase of penalties of prohibited acts to
discourage nefarious activities of unscrupulous people in connivance with
individuals or officers of the PCSO who are representing important sectors
familiar with the aspects of charity, health and legal work and undertakings.

The approval of this bill is earnestly sought.

Ss Te)
Lone District, CAMIGUIN


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

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__ 4956

INTRODUCED BY REPRESENTATIVE PEDRO P. ROMUALDO

AN ACT
AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 1169 OTHERWISE
KNOWN AS THE CHARTER OF THE PHILIPPINE CHARITY SWEEPSTAKES.
OFFICE (PCSO) AND FOR OTHER PURPOSES

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

SECTION 1. Section 1 is hereby amended to read as:

“The Philippine Charity Sweepstakes Office. — The Philippine Charity
Sweepstakes Office, hereinafter [designated] REFERRED AS the “Office” shall
be the principal government agency for raising and providing for funds for
health programs, medical assistance and SOCIAL INTERVENTION services,
and REGISTERED charities IN GOOD STANDING of national character, and as
such shall have the general powers conferred in section thirteen of Act
Numbered One thousand four hundred fifty-nine, as amended, and shall

have the FOLLOWING authority:

A. To hold and conduct charity sweepstakes races, [lotteries,] and

similar activities, in such frequency and manner, as shall be


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determined, and subject to such rules and regulations as shall be

promulgated by the Board of Directors.

B. Subject to the approval of the [Minister of Human Settlements]
DEPARTMENT OF HEALTH, to engage in health and welfare-related
investments, programs and activities which may be profit-oriented,
by itself or in collaboration, association or joint venture with any
person [, association, company,] or JURIDICAL entity whether
domestic or foreign, except for the EXCLUSIVE activities mentioned
in the preceding paragraph [(A)], for the purpose of providing for
permanent and continuing sources of funds for health programs,
including the expansion of existing ones, medical assistance and
services, and/or charitable grants: [Provided, That such
investments will not compete with the private sector in areas where
investments are adequate, as may be determined by the National

Economic and Development Authority]

C. To undertake [any other activity] INVESTMENT ACTIVITIES that will
enhance its funds generation operations and funds management
capabilities, subject to the same limitations provided for in the

preceding paragraph.

D. It shall have a Board of Directors, hereinafter designated the Board,
composed of [five] SEVEN (7) members who shall be appointed,
and whose compensation and term of office shall be fixed, by the

President. THE PRESIDENT SHALL CHOOSE TWO (2) MEMBERS


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WHO ARE RESIDENTS FROM ANY LUZON REGIONS, TWO (2)
MEMBERS WHO ARE RESIDENTS FROM ANY VISAYAS REGIONS
AND TWO (2) MEMBERS WHO ARE RESIDENTS FROM THE
MINDANAO REGIONS. ALL MEMBERS OF THE BOARD SHALL HAVE
AT LEAST FIVE (5) YEARS EXPERIENCE IN CHARITY WORK OR
RELATED UNDERTAKINGS, OR MAY COME FROM THE LEGAL OR
MEDICAL PROFESSION WITH AT LEAST FIVE (5) YEAR RELEVANT

PRACTICE OR UNDERTAKING.

SECTION 2. Section 2 is hereby amended to read as:

“The general manager shall be appointed by the Board of Directors and
he can be removed or suspended only for cause as provided by law. He shall
have the direction and control of the Office in all matters which are not
specifically reserved for action by the Board. Subject to the approval of the
Board of Directors, he shall also appoint the personnel of the Office, except
the Auditor and the personnel of the Office of the Auditor who shall be
appointed by the [Auditor General] CHAIRMAN OF THE COMMISSION ON

AUDIT".

SECTION 3. Section 3 is hereby amended to read as:

“Operating expenses. — The operating expenses of the Office shall be
paid from its receipts AND SUBJECT TO REGULAR AUDIT. A REPORT OF THE
AUDIT SHALL BE DISTRIBUTED TO THE OFFICE OF THE PRESIDENT, THE

SENATE OF THE PHILIPPINES AND THE CONGRESS OF THE PHILIPPINES”.


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SECTION 4. Section 4 is hereby amended to read as:

“Holding of sweepstakes. — The Office shall hold charity horse race
sweepstakes under such regulations as shall be promulgated by the Board in
accordance with Republic Act No. 309: Provided, however, That when the
holding of a sweepstakes race to determine prizes is impossible due to war,
public calamity, or other unforeseen or fortuitous event, or when there is no
sufficient number of horses to determine the major prizes, the Board of
Directors may determine the procedure to be followed in the distribution of
prizes in the most just, equitable, and expeditious manner. The horse races
and the sale of tickets in the said sweepstakes shall be exempted from all
taxes, except that each ticket shall bear a [twelve-centavo internal revenue
stamp] APPROPRIATE DOCUMENTARY STAMP and [that from the total prize
fund as provided herein from the proceeds of the sale of tickets there shall
be deducted an amount equivalent to five per centum of such total prize
fund, which shall be paid to the Bureau of Internal Revenue not later than
ten days after each sweepstakes in lieu of the income tax heretofore
collected from sweepstakes prize winners: Provided, however, That any
prizes that may be paid out from the resulting prize fund, after said five per
centum has been deducted, shall be exempted from income tax.] TEN PER
CENTUM OF THE TOTAL PRIZE FUND SHALL BE DEDUCTED AND PAID
DIRECTLY TO THE BUREAU OF INTERNAL REVENUE NOT LATER THAN
FIFTEEN DAYS AFTER EACH DRAW IN LIEU OF THE INCOME TAX OF THE
WINNERS OF THE DRAW. The tickets shall be printed by the Government
and shall be considered government securities for the purposes of penalizing

forgery or alteration”.


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SECTION 5. Section 5 is hereby amended to read as:

“The Board of Directors of the Philippine Charity Sweepstakes is
hereby authorized to fix heights of race horses IN CONSULTATION WITH THE
PHILIPPINE RACING COMMISSION to run in each sweepstakes race as

provided for in this Act”.

Only horses born in the Philippines that have run for a prize previously in
any race may participate in any sweepstakes race under this Act. The Board
of Directors of the Philippine Charity Sweepstakes shall fix the dates of
registration, measurement, and declaration of horses to participate in any
sweepstakes race. No horse owner shall be permitted to register more than

one entry that may participate in any sweepstakes race.

SECTION 6. Section 6 is hereby amended to read as:

“Allocation of Net Receipts. - From the gross receipts from the sale of
sweepstakes tickets, whether for sweepstakes races, [lotteries,] or similar
activities, shall be deducted the printing cost of such tickets, which in no
case shall exceed two percent of such gross receipts to arrive at the net

receipts. The net receipts shall be allocated as follows:

A. XXX...

B. Thirty percent (30%) shall be set aside as contributions to the charity
fund from which the Board of Directors, in consultation with the [Ministry of
Human Settlement] DEPARTMENT OF HEALTH on identified priority
programs, needs, and requirements OF DISTRICT AND PROVINCIAL

HOSPITALS IN FOURTH TO FIFTH CLASS LOCAL GOVERNMENT UNITS AND


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in specific communities and with approval of the Office of the President, shall
make payments or grants for health programs, including the expansion of
existing ones, medical assistance and services and/or REGISTERED charities
of GOOD STANDING AND national character, such as the Philippine National
Red Cross, under such policies and subject to such rules and regulations as
the Board may from time establish and promulgate. The Board may apply
part of the contributions to the charity fund to approved investments of the
Office pursuant to Section 1 (B) hereof, but in no case shall such application
to investments exceed ten percent (10%) of the net receipts from the sale of

sweepstakes tickets in any given year.

Any property acquired by an institution or organization with funds given to it
under this Act shall not be sold or otherwise disposed of without the
approval of the Office of the President, and that in the event of its
dissolution all such property shall be transferred to and shall automatically
become the property of the Philippine Government. THE BENEFICIARIES OF
THESE FUNDS SHALL SUBMIT A YEARLY REPORT ON THE STATUS OF

OWNERSHIP OF THE PROPERTY TO THE BOARD.

C. xxx

D. xxx...

SECTION 7. Section 7 is hereby amended to read as:

“Annual Report of the Board. - The Board shall submit, during the
month of July of each year, a FINANCIAL report to the President of the

Philippines, THE SENATE OF THE PHILIPINES AND THE HOUSE OF


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REPRESENTATIVES [and to both House of Congress on the activities of the

Office]”.
SECTION 8. Section 8 is hereby amended to read as:

“PROHIBITED ACTS [Acts penalized]. - [The following shall be
punished by imprisonment of not less than one month and not more than

three years]:

(a) Any person who, without being a duly authorized agent of the Office,
sells tickets of the Office, or, being such agent, sells tickets, fractions or
coupons thereof not issued by the Office, representing or tending to
represent an interest in tickets issued by the Office SHALL BE PUNISHABLE
BY IMPRISONMENT OF NOT LESS THAN ONE (1) MONTH BUT NOT MORE
THAN FOUR (4) YEARS IMPRISONMENT AND A FINE OF NOT LESS THAN
FIVE THOUSAND PESOS (P\ 5,000.00) BUT NOT MORE THAN FIFTY
THOUSAND PESOS (P\ 50,000.00).

(b) Any person who sells tickets issued by the Office at a price greater than
the price stated on the ticket SHALL BE PUNISHABLE BY IMPRISONMENT OF
NOT LESS THAN ONE (1) MONTH BUT NOT MORE THAN ONE (1) YEAR
IMPRISONMENT AND A FINE OF NOT LESS THAN FIVE THOUSAND PESOS
(P\ 5,000.00) BUT NOT MORE THAN FIFTY THOUSAND PESOS (P\

10,000.00).

(c) Any officer or employee of a hospital or other charitable or hygienic
institution or organization who uses funds obtained from the Office under
this Act for purposes other than those herein authorized SHALL BE

PUNISHABLE BY IMPRISONMENT OF NOT LESS THAN ONE (1) YEAR BUT


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NOT MORE THAN SIX (6) YEARS AND A FINE OF NOT LESS THAN TEN
THOUSAND PESOS (P\ 10,000.00) BUT NOT MORE THAN ONE HUNDRED
THOUSAND PESOS (P\ 100,000.00). PROVIDED HOWEVER, THAT THE
IMPRISONMENT PENALTY AND FINE CAN BE INCREASED DEPENDING ON
THE GRAVITY OF THE OFFENSE AND THE AMOUNT OF FUNDS MALVERSED,
NOTWITHSTANDING OTHER CASES FILED AGAINST THESE GOVERNMENT

PERSONNEL AND PRIVATE INDIVIDUALS.

SECTION 9. Section 10 is hereby amended to read as:

“The Board of Directors [of the Sweepstakes], with the approval of the
President of the Philippines, shall promulgate rules and regulations for the
holding of SWEEPSTAKES DRAWS lotteries]; shall fix the number and price
of the tickets for the same and number of tickets usually given gratis to the
ticket vendors; fix the number and amount of prizes; fix the date when the
sale of tickets shall close; and designate the dates and place or places where

such SWEEPSTAKES DRAWS [lotteries] shall be held”.

SECTION 10. Insert New Section to read as:

“EXISTING LEASE CONTRACTS AND OTHER RELATED AGREEMENTS. ~
ALL CONTRACTS AND AGREEMENTS ENTERED INTO BY THE PCSO WITH
PERSONS OR JURIDICAL ENTITIES DOMESTIC OR FOREIGN RELATED TO
THE OPERATION OF ONLINE LOTTERY AND SIMILAR ACTIVITIES WILL NO
LONGER BE EXTENDED OR RENEWED AFTER TWO (2) YEARS FROM THE

EFFECTIVITY OF THIS LAW.


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CONSISTENT WITH THE PROVISIONS OF THIS ACT, ALL ON-LINE
LOTTERIES WILL CEASE TO OPERATE AFTER TWO (2) YEARS FROM THE
EFFECTIVITY OF THIS LAW.

THE BOARD SHALL PREPARE THE NECESSARY GUIDELINES IN THE
WINDING DOWN OF OPERATIONS OF ALL ONLINE LOTTERY OPERATIONS
NATIONWIDE AND SHALL SUBMIT A REPORT OF THIS TO THE OFFICE OF
THE PRESIDENT, THE SENATE OF THE PHILIPPINES AND HOUSE OF
REPRESENTATIVES THREE (3) MONTHS PRIOR TO THE DEADLINE PROVIDED
IN THIS SECTION AND THREE (3) MONTHS AFTER THE CLOSURE OF ALL

ONLINE OPERATIONS HAVE BEEN FULLY IMPLEMENTED”.

SECTION 11. Separability Clause.- If any section or provision of this Act is
declared unconstitutional or invalid, the other sections or provisions not

affected thereby shall continue to be in force and effect.

SECTION 12. Repealing Clause. All laws, parts of laws, executive orders,
ordinances, rules and regulations which are inconsistent with the provisions

of this Act are hereby repealed, amended or modified accordingly.

SECTION 13. Effectivity. — This Act shall take effect after publication in two

(2) newspapers of general circulation.

Approved,