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

FIFTEENTH CONGRESS
First Regular Session

House Bill No.__ 4818

Introduced by the Hon. Jeci A. Lapus

EXPLANATORY NOTE

A legislative franchise is a special privilege granted by the state to corporations.
It is a privilege of public concern which cannot be exercised at will and pleasure,
but should be reserved for public control and administration, either by the
government directly, or by public agents, under such conditions and regulations
as the government may impose on them in the interest of the public. It is
Congress that prescribes the conditions on which the grant of the franchise may
be made. Thus the manner of granting the franchise, to whom it may be granted,
the mode of conducting the business, the charter and the quality of the service to
be rendered and the duty of the grantee to the public in exercising the franchise
are almost always defined in clear and unequivocal language (Jaworski vs.
PAGCOR, January 14, 2004)

In year 2007, Philippine Games and Amusement Board (PAGCOR) had its most
significant piece of legislation with the passage of Republic Act No. 9487 granting
the state-run gaming firm another 25 years to regulate and operate games of
chance, license gambling casinos, and to enter into joint venture, management,
or investment agreements with private entities. Under the old charter,
Presidential Decree no. 1869, PAGCOR had no authority to sub-franchise its
legislative franchise.

The grant of power by Republic Act no. 9487 to PAGCOR in the establishment
and operation of casinos to private entities is an invalid delegation since the
power to grant a gambling franchise was clearly a legislative power belonging
solely to the Congress unless delegated to an agency under express terms and
clear standards. It is the author's belief that the delegation does not fall from the
exceptions since the law does not explicitly set the safeguards and procedures in
the establishment and operation of casinos by private entities. The delegation


pave way to the absence of uniformity in the terms and conditions of the casino
licensing contracts entered into by PAGCOR and the private entities resulting to
abuses and corruption. There is no Implementing Rules and Regulations (IRR)
as of the moment and IRR is very important since it is a grant of privilege which
cannot be exercised at will and pleasure and was only a delegated power
granted by the Congress to the PAGCOR.

In view of the foregoing, the approval of this proposed measure is

eamestly sought
1A. LAPUS



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

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 4818

Introduced by the Hon. Jeci A. Lapus

AN ACT
FURTHER AMENDING PRESIDENTIAL DECREE NO. 1869, OTHERWISE
KNOWN AS PHILIPPINE GAMES AND AMUSEMENTS BOARD (PAGCOR)
CHARTER, AS AMENDED BY REPUBLIC ACT NO. 9487

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

Section. 1. The Philippine Amusement and Gaming Corporation (PAGCOR)
Charter, as amended by Republic Act no. 9487 is hereby further amended to
read as follows:

(1) Section 10, Nature and Term of Franchise, is hereby amended to
read as follows:

"SEC. 10. Nature and Term of Franchise. - Subject to the terms
and conditions established in this Decree, the Corporation is hereby
granted from the expiration of its original term on July 11, 2008,
another period of twenty-five (25) years, renewable for another
twenty-five (25) years, the rights, privileges and authority to operate
and MAINTAIN ( “LICENSE”- PHRASE DELETED) gambling
casinos, gaming clubs and other similar recreation or amusement
places, gaming pools, i.e. basketball, football, bingo, etc. except jai-
alai, whether on land or sea, within the territorial jurisdiction of the
Republic of the Philippines: Provided, That the corporation shall
obtain the consent of the local government unit that has territorial


jurisdiction over the area chosen as the site for any of its
operations.

xX

"The authority and power of the PAGCOR to ( “AUTHORIZE
AND LICENSE”-PHRASE DELETED) regulate games of chance,
games of cards and games of numbers shall not extend to: (1)
games of chance authorized, licensed and regulated or to be
authorized, licensed and regulated by, in, and under existing
franchises or other regulatory bodies; (2) games of chance,
games of cards and games of numbers authorized, licensed,
regulated by, in, and under special laws such as Republic Act No.
7922; and (3) games of chance, games of cards and games of
numbers like cockfighting, authorized, licensed and regulated by
local government units. The conduct of such games of chance,
games of cards and games of numbers covered by existing
franchises, regulatory bodies or special laws, to the extent of the
jurisdiction and powers granted under such franchises and special
laws, shall be outside the (“LICENSING AUTHORITY AND”-
PHRASE DELETED) regulatory powers of the PAGCOR."

(2) Section 3 (h) is hereby amended to read as follows

“SEC. 3. Corporate Powers.-

xXx

"(h) TO ENTER INTO, MAKE, PERFORM, AND CARRY OUT
CONTRACTS OF EVERY KIND AND FOR ANY LAWFUL
PURPOSE PERTAINING TO THE BUSINESS OF THE
CORPORATION, OR IN ANY MANNER INCIDENT THERETO,
AS PRINCIPAL, AGENT OR OTHERWISE, WITH ANY
PERSON, FIRM, ASSOCIATION, OR CORPORATION. THE
AUTHORITY AND LICENSING OF GAMBLING CASINOS TO
PRIVATE ENTITIES SHALL BE THE SOLE PREROGATIVE
OF THE CONGRESS IN THE EXERCISE OF ITS POWER TO
GRANT FRANCHISE TO CORPORATIONS.

Section 2. 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, modified or
amended accordingly.

Section 3. Effectivity This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,