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REPUBLIC OF THE PHILIPPINES
2017

HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, S187

Introduced by MAGDALO Party-List Representative
__HON. GARY C. ALEJANO

Explanatory Note

Itis the policy of the State to protect its citizens, especially minors, from the harmful and
pernicious effect of gambling. Towards this end, the State should adapt to the new types of
gambling introduced by rapid changes in technology, such as Internet Gambling, and to set strict
measures to combat this social menace which dissipate the energy, resources and moral fibre of
the people. In the United States in 1999, the National Gambling Impact Study stated that "the
high-speed instant gratification of Internet games and the high level of privacy they offer may
exacerbate problem and pathological gambling."

In the late 1990s, online gambling gained popularity. Internet gambling websites had
increased from just 15 websites in 1996, to 200 websites in 1997. By 2001, the estimated number
of people who had participated in online gambling rose to 8 million and growth would continue,
despite the legislation and the lawsuit challenges which would continue to be received by online
gambling. In 2016. Statista has predicted the size of the online gambling market would have a
volume of $45.86 billion growing to $56.05 billion by 2018.

Gambling has become one of the most popular and lucrative businesses present on the
Internet. This is partly due to the wide range of gambling options that are available to facilitate
many different types of people. The money for online gambling can come from credit card,
electronic check, certified check, money order, wire transfer, or Bitcoin

Unfortunately, due to the virtual nature of online gambling, it is hard for players to verify
the authenticity of the they are using. Unlike in physical ¢: randomness and deck
shuffling cannot be verified by visual means. Players interact with other players through GUIs,
which connect to the gambling site's server in a non-transparent manner.

‘Thus, this bill aims to regulate online gaming in the Philippines by creating a regulatory
Board which shall promulgate and adopt rules and regulations to govern Internet gaming. The
policies to be promulgated by the Board will be implemented in a manner that provides for the
security and effective management, administration and control of Internet gaming.

This bill will also require for an independent testing and certification standards for
internet games and internet gaming devices and associated equipment. Moreover, internet
gaming account credits and payment will be required. Minors, ice., those under 18 years old will
not be allowed to engage in online gambling.

In view of the foregoing, approval of this measure is earnestly sought.



REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES.
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 5187

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT OTHERWISE KNOWN AS THE INTERNET GAMBLING REGULATORY
ACT OF 2017

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

1 SECTION 1.Title. - This Act shall be known as “Internet Gambling
2 Regulatory Act of 2017".
3
4 SECTION. 2. Declaration of Policy. — \t is hereby declared the policy of the
5 State to protect its citizens, especially minors, from the harmful and pernicious effect
6 — of gambling. Towards this end, the State should adapt to the new types of gambling
7 introduced by rapid changes in technology, such as Internet Gambling, and to sct
8 strict measures to combat this social menace which dissipate the energy and resources
9 of the people.

10

u SECTION 3. Definition of Terms.- For purposes of this Act, the term:

2

2B a) “Board” refers to the Philippine Amusement and Gaming Corporation.

14

1s b) “Licensee” is the duly licensed holder of an Internet Gaming Certificate

16 authorized by the Board to conduct Internet Gaming:

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18 ) “Authorized Internet game.” Any game approved and licensed by the Board

19 to be suitable for use for Internet gaming activities.

20

2 ) “Internet gaming.” The placing of bets or wagers with licensee located in

2 this jurisdiction using a computer network through which a licensee may offer

23 authorized Internet games to individuals who have registered and established

24 an Intemet gaming account with the licensee.

25


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e) “Internet gaming account.” The formal, electronic system implemented by a
licensee to record the balance of a registered player’s debits, credits and other

activity relating to Internet gaming,

) “Intemet gaming account agreement.” The agreement entered into between
a licensee and an individual which governs the terms and conditions of the
individual’s Internet gaming accounts and the use of the Internet for purposes

of placing wagers on Internet games operated by the licensee, The Internet

gaming account agreement shall be executed in person.

2) “Intemet gaming device.” The technology, including software, system
programs, hardware or any other gaming equipment as approved by the Board
that is used to manage, administer or control Internet gaming or the wagers
associated with Internet gaming to facilitate the offering of authorized Internet

games to registered players.

h) “Internet gaming restricted area.” Any room or area within the premises of
a licensed facility or other location within the Philippines as approved by the
Board to conduct Internet gaming, including where approved by the board,

redundancy facilities.

i) “Licensed facility.” The physical land-based location at which a licensed

gaming entity is authorized to conduct Internet gaming

i) “Key employee.” Any person who is employed ina director or department

head capacity and who is empowered to make discretionary decisions that
regulate Internet gaming operations, including the general manager and
assistant manager of the licensed facility, director of Internet gaming, director
of credit operations, director of surveillance, director of marketing, director of

management information systems, director of Internet gaming system

programs or other similar j ications associated with Internet gaming,

persons who manage, control or administer Internet games or the bets and

wagers associated with Internet games, director of security, comptroller and
any employee who is not otherwise designated as a gaming employee and who
supervises the operations of these departments or to whom these departments
directors or department heads report and such other positions not otherwise
designated or defined under this part which the Board shall determine based

on detailed analyses of job description as provided in the internal controls of


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the licensee as approved by the Board. All other gaming employees unless

otherwise designated by the Board shall be classified as non-key employees.

k) “s

distributes or services any Internet gaming device or associated equipment for

plier” A person that sells, leases, offers or otherwise provides,
use or play of slot machines or Internet games in the Philippines.

1) “Supplier license.” A license issued by the Board authorizing a supplier to
provide products or services related to Internet gaming device or associated

equipment to licensee for use in the Philippines for gaming purposes.

m) “Registered player.” An individual who has entered into an Internet

gaming account agreement with a licensee.

n) “Cash equivalent.” An asset that is readily convertible to cash, including,

but not limited to, any of the follow’

1) Chips or tokens.

2) Traveler’s checks.

3) Foreign currency and coin.

4) Certified checks, cashier's checks and money orders.

5) Personal checks or drafts.

6) A negotiable instrument applied against credit extended by a
certificate holder, an Internet gaming certificate holder or a financial
institution.

7) Any other instrument or representation of value that the Board

deems cash equivalent.

0) “Certificate.” An Intemet gaming certificate issued to a Licensee in

accordance with this Act

p) “Associated equipment.” Any equipment or mechanical, clectromechanical
or electronic contrivance, component or machine used in connection with any
internet game, computerized systems for controlling and monitoring Internet
games, including, but not limited to, Internet gaming devices necessary for the

operation of Internet games as by the Board.


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SECTION 4. Authority to play Internet games. - A person who is 18 years
of age or older is hereby permitted to participate as a registered player in Internet
gaming activities and wagering associated with playing an Internet game offered by a

licensee in this in accordance with the regulations of the board.

SECTION 5. Regulatory Powers. ~ The Board shall promulgate and adopt
rules and regulations to govern Internet gaming in order for Internet gaming to be
implemented in a manner that provides for the security and effective management,
administration and control of Internet gaming, including, but not limited to,

regulations:

a) Ensuring that Internet games are offered for play in the Philippines is in a

manner that is consistent with the provisions of this Act.

b) Establishing standards and procedures for testing and approving Internet
games and Internet gaming devices and associated equipment, and any
variations or composites of authorized Internet games, provided that the board
determines that the Internet games and any new Internet games or any
variations or composites are suitable for use after a test or experimental period

under any terms and conditions as the board may deem appropriate.

c) Establishing standards and rules to govern the conduct of Internet gaming
and the system of and wagering associated with Internet gaming including
internal controls and accounting controls, and the type, number, payout,

wagering limits and rules for Internet games.

4) Establishing notice requirements pertaining to minimum and maximum
wagers on Internet games, Minimum and maximum wagers may be adjusted
by the licensee in the normal course of conducting an Internet game, except
that changes in the minimum wagers of any Internet game shall not apply to
players already engaged in wagering on an Intemet game when the minimum,
wager is changed, unless 30 minutes’ notice is provided electronically in a

form and manner approved by the board.

f) Ensuring that all facilities, Intemet gaming devices and associated
equipment are arranged in a manner to promote appropriate security for

Internet gaming.


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g) Establishing technical standards for the approval of Internet games, Internet
gaming devices and associated equipment, including mechanical, electrical or
program reliability, security against tampering, the comprehensibility of
wagering and noise and light levels, as it may deem necessary to protect

registered players from fraud or deception.

h) Governing the creation and utilization of Internet gaming accounts by
registered players, including requiring the following:
1) That Internet gaming accounts shall be possessed by a natural

person and not in the name of any beneficiary, custodian, joint trust,

corporation, partnership or other organization or entity.

2) That Internet gaming accounts shall not be assignable or otherwise

transferable.
3) That no account shall be established for an individual under 18
years of age

4) That all Internet gaming accounts shall be established in person at a

licensed fa

ity.

i) Establishing procedures for:
1) Acquiring funds in an Internet gaming account by cash, transfer or
other means.

2) The withdrawal of funds from Internet gaming accounts.

3) The suspension of Internet gaming account activity for security
reasons.

4) The termination of Intemet gaming accounts and disposition of
proceeds in accounts.

5) The disposition of unclaimed amounts in dormant Internet gaming

accounts,

k) Establishing mechanisms by which registered players may place limits on
the amount of being wagered per Internet game or during any specified time

period or the amount of losses incurred during any specified time period.

1) Establishing mechanisms to exclude from Internet gaming, persons not

eligible to play by reason of age or incompetency.

m) Establishing procedures for the protection, security and reliability of

Internet gaming accounts, Internet games, Internet gaming devices and


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associated equipment and mechanisms to prevent tampering or utilization by
unauthorized persons.
n) Establishing data security standards to govern age and location verification

of persons engaged in Intemet gaming activity.

0) At its discretion, the board may determine whether persons those provide
the following goods or services and any other goods or services related to
Internet gaming as the board may determine shall be required to obtain a
license, permit or other authorization:

1) Payment processing and related money transmitting and services.

2) Customer identity or age verification and geospatial technology
services,

3) General telecommunications services, which are not specifically
designed for or related to Internet gaming.

4) Other goods or services that are not specifically designed for use
with Internet gaming if the persons providing the goods or services
are not paid a percentage of gaming revenue or of money gambled
on Internet games or online commission fees by the licensee, not
including fees to financial institutions and payment providers for

facilitating a deposit by an Internet gaming account holder.

p) The board shall develop a classification system for the licensure, permitting
or other authorization of persons that provide the following goods or services
related to Internet gaming:

1) Persons that provide Internet games and Internet gaming devices

and associated equipment.

2) Persons that manage, control or administer the Internet games or

the wagers associated with Internet games
3) Providers of customer lists comprised of persons identified or
selected, in whole or in part, because they placed wagers on Internet

gaming.

SE

(a) General Power.-

ION 6. General and specific powers.

1. The board shall have general and sole regulatory authority over the
conduct of gaming, including Internet gaming, or related activities as

described in this part. The board shall ensure the integrity of the


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acquisition and operation of Internet games, Internet gaming devices
and associated equipment and shall have sole regulatory authority over

every aspect of the authorization, operation and play Internet games.

b) Specific powers.- The board shall have the specific power and duty:

1. At its discretion, to award, revoke, suspend, condition or deny an

Internet gaming certificate in accordance with this Act.

In addition to the power of the board regarding license and permit
applicants, to determine at its discretion the suitability of any person
who furnishes or secks to furnish to a licensee directly or indirectly
any goods, services or property related to Internet games, Internet
gaming devices and associated equipment or through any
arrangements under which that person receives payment based directly
or indirectly on earnings, profits or receipts from the Internet games,
Internet gaming devices and associated equipment. The board may
require any such person to comply with the requirements of this part
and the regulations of the board and may prohibit the person from

furnishing the goods, services or property.

3. The board shall not approve an application for or issue or renew a
license, certificate, registration or permit unless it is satisfied that the
applicant has demonstrated by clear and convincing evidence that the
applicant is a person of good character, honesty and integrity and is a
person whose prior activities, criminal record, if any, reputation, habits
and associations do not pose a threat to the public interest or the
effective regulation and control of Internet gaming operations or create
or enhance the danger of unsuitable, unfair or illegal practices,
methods and activities in the conduct of Internet gaming operations or
the carrying on of the business and financial arrangements incidental

thereto,

4. To publish annually in the Official Gazette and on the Board’s
Internet website a complete list of all persons who file an application
for the authorization to conduct Internet gaming and the status of each

Application or Internet gaming certificate.


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5. To review detailed site plans identifying the restricted area or room

where an applicant proposes to manage, administer or control Intemet

gaming operations within a licensed facility to determine the adequacy

of the proposed internal and external security and proposed

surveillance measures.

6. To require each licensee to:

i

iv.

Provide written information on its Internet gaming
website which explains the rules for each Internet
games, payoffs or winning wagers and other

information as the board may require.

Provide specifications approved by the board to
integrate and update the licensed facility’s surveillance
system to cover all areas in the licensed facility where
Internet gaming will be managed, administered or

controlled. The specifications shall include provisions

providing the board and other persons authorized by the
board with onsite access to the surveillance system or

its signal.

Designate one or more restricted areas within the
licensed facility where Internet gaming activity will be

managed, administered or controlled.

Provide the board with access to the Internet website,
signal or transmission used in connection with Internet

gaming.

Ensure that visibility in the designated restricted area in
the licensed facility where Internet gaming will be
managed, administered or controlled is not obstructed
in any way that could interfere with the ability of the
licensee, the board and other persons authorized by the
board or other persons authorized under this part to
oversee the surveillance of the conduct of Internet

gaming operations.


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vi. Adopt procedures for the recordation, replication and
storage of all play and transactions for a period to be

determined by the board.

vii. Adopt policies or procedures to prohibit any authorized
person from having access to Internet gaming devices
and associated equipment, including software, system
programs, hardware and any other gaming equipment

which is used to manage, administer or control Internet

gaming.

viii, Adopt data security standards to verify the age of
persons engaged in Internet gaming activity and
prevents unauthorized access by any person whose age
has not been verified or whose age cannot be verified in

accordance with regulations adopted by the board.

ix. Adopt standards to protect the privacy and security of

persons engaged in Internet gaming activity.

x. Collect, report and pay any and all applicable taxes and
fees and maintain all books, records and documents
related to the licensee’s Internet gaming activities. All
books, records and documents shall be immediately
available for inspection during all hours of operation in
accordance with the regulations of the board and shall
be maintained in a manner and during periods of time

as the board shall be regulation require.

7. To require cach licensee to provide on a quarterly basis the following

information with respect to Internet gaming:

i, The name of any person, entity or firm to whom any payment,
remuneration or other benefit or thing of value has been made or
conferred for professional services, including, but not limited to, legal,

consulting and lobbying services;


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ii, The amount or value of the payments, remuneration, benefit or thing,
of value;

iii, The date on which the payments, remuneration, benefit or thing of
value was made; and

iv. the reason or purpose for the procurement of the services.

SECTION 7, Internet gaming certificate required and content of
Application.-

a) Certificate required. No person shall operate or attempt to conduct

Internet gaming, except for test purposes, to the public without first obtaining

an Internet gaming certificate from the board. An applicant may seek

approval to conduct Internet gaming by filing an application for an Internet

gaming certificate with the Board.

‘The Board shall prescribe the form and manner to govern the submission of a
application for an Internet gaming certificate. Not more than one Internet
gaming certificate shall be issued to operate Internet gaming within a

licensed facility.

b) Content of Application In addition to information and
documentation demonstrating that applicant is legally and technically
qualified for an Internet gaming certificate under this Act, the
application seeking board approval to conduct Internet gaming shall
include the following:

1. The name, business address and contact information of the

applicant

2. The name and business address, job title and a photograph of
each principal and key employce of the applicant who will be

involved in the conduct of Internet gaming.

3. An itemized list of the Internet games and any other game or
games the applicant plans to offer over the Internet for which
authorization is being sought. The applicant shall, in
accordance with regulations promulgated by the board, file any
charges in the number of authorized games offered through

Internet gaming with the board.

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4. The estimated number of full-time and part-time
employment positions that will be created at the licensed

facility if Internet gaming operations are authorized.

5. A brief description of the economic benefits expected to be

realized if Internet gaming operations are authorized.

6. The details of any financing obtained or that will be obtained
to fund the fund the cost of commencing Internet gaming

operations.

7. Information and documentation concerning financial
background and resources, as the board may require, to
establish by clear and convincing evidence the financial

stability, integrity and responsibility of the applicant.

8. Information and documentation, as the board may require, to
establish by clear and convincing evidence that the applicant
has sufficient business ability and experience to create and
maintain a successful Internet gaming operation. In making this
determination, the board may consider the applicant's financial

information employment data and capital investment.

9. Information and documentation, as the board may require, to
establish by clear and convincing evidence that the applicant

has or will have the financial ability to pay the Internet gaming

authorization fee.

10. Detailed site plans identifying the applicant’s proposed
restricted area where Internet gaming operations will be
managed, administered or controlled within the licensed

facility as approved by the board.

11. A detailed description of all the following

i. The applicant’s initial system of intemal and

accounting controls applicable to Internet gaming.

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ii. The applicant's proposed standards to protect, with a
reasonable degree of certainty, the privacy and

security of its registered players.

iii, How the applicant will facilitate compliance with
all of the requirements set forth in this Act,
including, but not limited to, all of the following:

a, Age verification requirements designed to
block access to individuals under 18 years of
age.

b, Appropriate data security standards to prevent
unauthorized access by any person whose age
have not been verified or whose age cannot be
verified in accordance with this Act and the

applicable regulations of the board.

iv. The applicant's proposed age verification standards

designed to block a

88 0 persons under 18 years of
age and persons excluded or prohibited from
participating in Internet gaming activities under this
Act.

v. The procedures the applicant will use tor

individuals who wish to participate in Internet gaming

activities

vi, The procedures the applicant will use to establish

Internet gaming accounts for registered player

vii, The Internet games and services the applicant proposes

to offer to registered players.

viii, Documentation and information relating to all proposed
subcontractors of the applicant, including, but not
limited to the following:

a, A description of the services to be provided

by each subcontractor.

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b. Information on the experience and
qualifications of each subcontractor to

provide the services anticipated,

c. The names of all proposed subcontractor's
‘owners, executives and employees that will
be directly or indirectly involved in the
applicant's Internet gaming operations, as
well as sufficient personal identifying
information on each such person to conduct
background checks as may be required by
the board.

12, The Internet gaming devices and associated equipment, including

the computer system or systems that the applicant plans to or
will utilize to manage, administer or control its Internet gaming

operations, including, but not limited to:

i Connectivity.

software and hardware,

Antifraud systems
iv. Virus and hacker protection,
v, Data protection,
vi. Access controls.

irewalls.

. Emergency and disaster recovery,
ix. Redundancy
x. Internet gaming devices and associated equipment,

including, but not limited to, hardware and software that

censure all of the following:

a. The Internet games are authorized Internet games,
b. The Internet games are independent and fair and played
by natural persons,

¢. Intemet game and wagering rules are available to all
registered players,

d. All data used for the operation of each Internet game is.
randomly generated.

13. Compliance Certification of its Internet gaming devices and associated

equipment, including Intemet gaming software, by a board-approved

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) Confidentiality, - Information subs

considered confidential,

SECTION

a) Requit

1. The board may approve an appl
finding, upon clear and convit

‘gaming laboratory to ensure that the gaming software complies with the
by the board.

requirements of the Act, ifreq

14, Detailed description of accounting systems, including, but not limited
to, accounting systems for all of the following:
i. Registered Internet gaming accounts,
ii. Per-hand charges. if applicable,
ili, Transparency and reporting to the board and the department,
iv. Distribution of revenue to the Government and winnings to

registered players.

¥V. Ongoing auditing. and intemal control compliance reviews,
15, Detailed information on security systems at the licensed facility to
protect the Intemet gaming website from intemal and extemal breaches and

threats,

16, Any other information as the board may require,

-d to the board under subsection (b) of this Section is

Issuance of Internet Gaming Certificate.

sments for approval of Application, -

tion for an Intemet Gaming Certificate upon

1g evidence, all of the following:

The applicant's Intemnet gaming operations comply in all respects with the

requirements of this Act and regulations promulgated by the board,

‘Age verification requirements designed to block access to individuals under 18

years of age and those persons excluded, denied access or prohibited from

Intemet gaming in accordance with this Act, as approved by the board, have been

implemented by the applicant

‘The applicant has implemented or will implement appropriate
data security standards 0 prevent unauthorized access. by any
person whose age has not been verified or cannot be verified
accordance with the regulations promulgated and adopted by
‘the Board.

The applicant has implemented or will implement appropriate
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standards (0 protect. the privacy and security of registered

players.

v. The applicant's initial system of intemal and accounting

controls applicable to Internet gaming, and the security and
integrity of all financial transactions in connection with the

system, complies with this Act and regulations promulgated

and adopted by the Board.
vi. The Applicant is in good standing with the board,
vii, The conduct of Intemet gaining activities will have a_ positive

economic impact through increased revenue and employment

‘opportunities.

2 It shall be an express condition of any Intemet gaming certificate that

a licensee shall collect, report and pay all applicable taxes and fees

and shall maintain all books, records and documents pertaining to

licensee's Intemet gaming operations in a manner approved by the

board. Ail books, records and ~— documents shall be immediately

available for inspection by the board during all hours of operation in
accordance with the regulations of the board and shall be maintained

ina manner and during periods of time as the board shall requi

'b) Issuance of Intemet gaming certificate.-
1. Upon approval of the application for an tntemet gaming, certificate,
the board shall issue an Intemet gaming certificate to the applicant.
The issuance of an Intemet gaming certificate prior to the full

not relieve the

payment of the authorization fee required this Act
licensee from the obligation to pay the authorization fee in accordance

with the requirements of this Act.

c.) Term of intemet gaming certificate, - Subject to the power of the board to deny,
revoke or suspend an Internet gaming certificate issued in accordance with the
requirements of this section, an Internet gaming certificate shall be renewed every three

years and shall be subject to the requirements under this Act.

4) Sanctions A licensee that fails to abide by the requirements of this chapter or any
condition contained in the licensee's statement of conditions governing the operation of
Intemet gaming shall be subject to board imposed administrative sanctions or other

penalties authorized under this Act.

1s


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prescribe the date on which application for an Internet gaming certificate must be filed

©) Background investigations.~Each application for an Intemet gaming certificate shall
be accompanied by a nonrefundable fee established by the board to cover the cost of
background investigations. The board shall determine by regulation the persons
involved, directly or indirectly, in a licensee's Intemet gaming operations who shall be
subject to background investigation. The reasonable and necessary costs and expenses
incurred in any background investigation or other investigation or proceeding under this
chapter shall be reimbursed to the board,

SECTION 9. Internet Gaming Certificate, - The following shall apply:
) An Internet gaming certificate shall be in effect unless;
|. The certificate is suspended or revoked by the board consistent with the
requirements of this part.

2. The licensee does not seek renewal of its Internet gaming certificate,

b) The Internet gaming certificate shall include an itemized list by type and of

intemet games approved by the Board and authorized for Intemet gaming
conducted by the licensee. The licensee may increase or decrease the number
of Internet games authorized for play on its Intemet website or change the
type of Intemet games played on its Internet gaming website upon notice to
the board and approval by the board. Unless approved by the hoard or a
designated employee of the board, the total number and type of intemet
games offered for play by the licensee may not differ from the number and

type approved by the board and authorized in the Internet gaming certificate,

©) A licensee shall be required to update the information in its initial Internet
mat times and in the form and manner as prescribed by Che

gaming

board,

‘The Board shall
the

SECTION 10. Date of initial Internet gaming authoricatio

board and shall approve or deny a petition within 90 days following receipt.

SECTION 11. Commencement of Internet gaming operations. ~ \ licensee may not

operate or offer intemet games for play on its Intemet gaming website until the Board determines

that:

a) The licensee is in compliance with the requirements of this Act,
b) The licensee's internal, administrative and accounting controls are
sufficient to meet the requirements of this Act,

©) The licensee's Intemet gaming employees, where applicable, are licensed,
permitted or otherwise authorized by the board to perform their respective duties.
4) The licensee is prepared in all respects to offer Intemet gaming to the

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public over its Internet gaming website,

) The licensee has implemented necessary internal, administrative,

accounting controls, security arrangements and surveillance systems for the
operation of internet gaming.
1) The licensee is in compliance with or has complied with the payment of the

Intemet gaming certificate fee,

s

ION 12. Situs of Internet gaming operations. - All wagers made through Internet

gaming shall be deemed to be initiated, received or otherwise made within the geographic
boundaries of the Philippines. Intemet gaming shall be exclusively conducted by a licensee
provided, however, that the intermediate routing of electronic data associated or in connection with
Internet gaming shall not determine the location or locations in which a bet or wager is initiated,

received or otherwise made.

SECTION 13. Establishment of Internet gaming accounts.

a) Registration restrictions. - Only natural persons who has first

the licensee shall be

established an Internet gaming —_ account
permitted to play an Internet game offered by or place any bet or
wager associated with an Intemet game offered by the licensee, An
Internet gaming account shall be in the name of a natural person and
may not be in the name of any beneficiary, custodian, joint trust,
corporation, partnership or other organization or entity, A _ licensee
shall not permit an individual to establish an Internet gaming account

unless the person is 18 years of age or older.

b) Establishment of Internet gaming accounts, —

1. An Intemet gaming account shall be executed in person. Each Internet

‘gaming account shall comply with the intemal controls of the licensee

that, at a minimum, require the following:

The filing and execution of an Internet gaming account
application, the form of which has been preapproved by the
board.

ii, Proof of age and residency as demonstrated by at least two

approved by the board through regulation.

iii, Physical address of the principal residence of the prospective

-ount holder in the Philippines, electronic mail address of the

prospective account holder and other contact information, as the

board or licensee may require.

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. Password or other secured identification provided by the

licensee to access the internet gaming account or some other
mechanism approved by the board to authenticate the player as

the holder to the internet gaming account

v. An acknowledgment under penalty of perjury that false or

misleading statements made in regard to an application for an
Intemet gaming account may subject the applicant to civil and

criminal penalties.

2. The licensee may accept or reject an application after receipt and
review of the application and proof of age for compliance with the
provisions of this Act. The licensee shall have the right, at any time with
oF without cause, to suspend or close any Internet gaming account at it

sole discretion,

3. The address provided by the applicant in the application for an Internet

gaming account shall be deemed the proper address for the purposes of

mailing checks, account withdrawals, notices and other materials.

4. An Intemet gaming account shall not be assignable or otherwise
transferable, and the licensee may, at any time, declare all or any part of

‘an Intemet gaming account to be closed for wagering.

) Password required—As part of the application process, the licensee shall
provide the prospective Intemet gaming account holder with a password to access
the gaming account or shall establish some other mechanism approved by the
Board to authenticate the individual as the holder of the Internet gaming account

and allow the individual access to the Intemet gaming acco

4) Grounds for rejection.-Any prospective Intemet gaming account holder who

provides false of misleading information on the application for an Internet gaming

account is subject to rejection of the application or cancellation of the account by
the licensee.
©) Suspension of Internet gaming account,—The licensee shall have the right to

suspend or close any Internet gaming account at its discretion,

1) Persons prohibited from establishing or maintaining an Internet gaming
account.--The following persons shall not be entitled to establish or maintain an
Internet gaming account:

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i. Any person under 18 years of age
ii, Mentally incompetent persons

iii, Any person on the list of persons who are to be excluded or ejected
from any licensed facility pursuant to rules to be promulgated by the
Board.

iv. Any gaming employee or key employee of a licensee,

SECTION 14, Internet gaming account credits and payment, ~

ion of t

) Credits to Intemet gaming accounts, - Notwithstanding any pro part to the

contrary, eredits to an Internet gaming account shall not be made except as provided by

this section, The following shall apply;

L.A deposit to an Internet gaming account by an account holder may be

submitted by the account holder to the li

¢ in one of the following forms:

ens

Cash given to the licensee,

ii, Check, money order, negotiable order of withdrawal or wire

or electronic transfer, payable and remitted to the lic

iii, Charges made to an account holder's credit card upon the

account holder's direct and personal authorization, which

authorization may be given to the licensee in a form and manner

bed by regulation of the board, if the use of the credit card

pre

has been approved by the lic

see,

iv, Any other method approved by the board,

) Payment of winnings.-When an Internet gaming account holder wins an Internet game,
the licensee shall credit the holder's Internet gaming account the appropriate amount

pursuant to the rules of the particular game. When the account holder logs off or cashes
out, the licensee shall credit the holder's gaming account in the amount of tokens or other

cash equivalents cashed

©) Rights of the licensee,—A licensee shall have the right to:
1. Credit an Intemet gaming account as part of a promotion,
2. Refuse, for any valid reason, all or part of any wager or deposit to the account

of an account holder.

4d) Interest prohibited. - Funds deposited in a registered player's Intemet gaming account
shall not bear interest to the account holder.

€) Debits to Internet gaming accounts.

bbe made except as follows:

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1, When an account holder logs onto a gaming account and exchanges account

funds for Internet tokens or other cash equivalents, the licensee shall debit the

holder's aecount in the amount of funds exchanged- Upon receipt by a licensee of
an account wager or an account purchase order, the licensee shall debit the
account holder's Intemet tokens or other cash equivalents in the amount of the

wager or purchase.

2. A licensee may authorize a withdrawal from an Internet gaming account when

the account holder submits to the slot machine licensee all of the following:

i. Proper identification,

ii, The correct password or other authentication Information for ac

ssing
the gaming account,

iii. A properly completed and executed withdrawal form in a form and
‘manner approved by the board through regulation.

3. Upon receipt of a properly completed and executed withdrawal form, and, if
there are sufficient funds in the gaming account to cover the withdrawal, the
licensee shall send, within three business days of receipt of the withdrawal
form, a check payable in the amount requested to the account holder at the
address specified in the application for the Internet gaming account or shall
‘transmit payment to the account holder electronically as approved by the board
by regulation.

SECTION 15. Dormant Internet gaming accounts. ~

8) Dormant Internet gaming accounts.-Any funds remaining in Internet gaming
accounts inactive or dormant for the period and under the conditions as
established by regulation of the board shall be paid 50% to the licensee and 50%
to the Board.

b) Closure of dormant accounts.-Before dosing a dormant Internet gaming
account, the licensee shall attempt to contact the account holder by mail, phone or
electronic mail to inform the account holder that the Internet gaming account is
inactive and may be subject to termination at such time and manner as determined

by regulation of the board.

SECTION 16. Log-in procedure required. ~

a) Establishment of iog-in procedure—Each licensee shall establish a log in
procedure for Intemet gaming account holders to access Internet gaming. The log-

in procedure shall include the provision of the appropriate authentication

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ECTION 17. Information provided at log-in. - The

information by the Intemet gaming account holder for access to the Intemet

gaming account, The licensee shall not allow an account holder to log-in and
access the Internet gaming, account holder’s Internet gaming account unless the
Intemet gaming account holder provides the correct password or other

authentication information,

) Exchange of funds—Upon log-in, the Internet gaming account holder shall
have the option to exchange any amount of funds in the Internet gaming account

for Internet tokens or other cash equivalents to be used for Internet gaming,

©) Credi

gaming account holder's Internet tokens or other cash equivalents shall be credited

$10 a

wunt—Upon logging off, the current amount of the Intemet

to the Internet gaming account holder's Intemet gaming, account,

Internet

snsee shall configure

1g Website to include a Link that, upon log-in, will allow an Intemet gaming account holder to

ail of the following information:

4) The current amount of money in the Internet gaming account holder's Internet

‘gaming account, including the current amount of the Internet gaming holder's

Internet tokens or other cash equivalents,

b) The Internet gaming account holder's wins and losses since the Internet gaming,

‘account was established,

) The Internet gaming account holder's

current gaming session and the wins and losses at the end of the current ga

session,

4) The complete text in searchable format of the rules of each internet game
offered by the slot machine licensee and any other information as the board may

require.

SECTION 18. Responsibilities of licensee. ~

a) Facilities and equipment-- Ail facilities and Intemet gaming devices

and associated equipment shall:

1. Be arranged in a manner promoting appropriate security for Internet gaming.
2. Include a closed-circuit visual monitoring system according to rules or
specifications approved by the board, with board access to the licensee's Internet
gaming, website, signal or transmission used in connection with Intemet gaming.

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3. Not be designed in any way that might interfere with or impede the board in its
regulation of Internet gaming,
4, Comply in all respects with regulations of the board.

SECTION 19. Internal, administrative and accounting controls, ~

4) Submissions to board. - Notwithstanding any provision of this Act, each
licensee who shall submit a description of its system of intemal procedures and
‘administrative and accounting controls for Internet gaming to the board, including,

provisions that provide for real time moni recordation or storage of all

internet games and a description of any changes to its procedures and controls.

The submission shall be made at least 90 days before Internet gaming operations

are to commence or at least 90 days before any change in those procedures or
controls isto take effect, unless otherwise directed by the board,

b) Filing, - Notwithstanding subsection (a], the procedures and controls may be
implemented by a licensee upon the filing of the procedures and controls with the

‘board. Each procedure or control submission shall contain both narrative and

diagrammatic representations of the system to be utilized with regard to Intemet
gaming, including, but not limited to;

1. Accounting controls, including the standardization of forms and
definition of terms to be utilized in the Internet gaming operations,

2, Procedures forms and, where appropriate, formulas to govern the
following;

i, Calculation of hold percentages;

ii, Revenue drops;

iii, Expense and overhead schedules;

iv, Complimentary services; and

v. Cash equivalent transactions,

3. Job descriptions and the system of personnel and chain of command,

establishing a diversity of respor

bility among employees engaged in

Intemet gaming operations and ident

1 primary and secondary
management and supervisory positions for areas of responsibility, salary
structure and personnel practices,

4. Procedures for the registration of players and establishment of Internet

‘gaming accounts, including a procedure for authenticating the age of
applicants for gaming accounts,

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5. Procedures for the termination of a registered player's Internet gamii

‘account by the account holder and the return of any funds remaining in

the gaming account to the account holder.

6. Procedures for the suspension or termination of a dormant gaming

account.

7. Procedures for the logging in and authentication of a registered player
in order to enable the player to commence Internet gaming and the
logging off of the registered player when the player has completed play,
including a procedure to automatically log a registered player out of the

player's Internet gaming account after a specified period of inactivity.

8, Procedures for the crediting and debiting of registered players’ Internet

‘gaming accounts.

9. Procedures for

i. The cashing of checks to establish credit in an Internet gaming
account;

ii, The receipt and security of cash to establish credit in an

Intemet gaming account, whether the cash is received by wire
transfer or by other means as approved by the board; and

Receipt of other electronic negotiable instruments approved
by the board to establish credit in an Internet gaming account,

10. Procedures for the withdrawal of funds from an Internet gaming

account by the registered player

11. The redemption of chips, tokens or other cash equivalents used in
Internet gaming and the payout of jackpots.

12. The recording of transactions pertaining to Intemet gaming.

13. Procedures for the security of personal identifying information of
registered players and other information as required by the board and

funds in Intemet gaming accounts,

14, Procedures for the transfer of Internet gaming revenue from Internet

gal

ing accounts to the counting process.

15. Procedures and security for the counting and recordation of revenue.

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) Review of submis

16, Procedures for the security of Intemet gaming devices and associated
equipment within a restricted area on the premises of the licensed
fi

designed for that purpose off the premises of a licensed facility but

lity or in a secure facility inaccessible to the public and specifically

within the geographic boundaries of the Philippines as approved by the
board.

17, Procedures and security standards as to receipt of and the handling

and storage of Internet gaming devices and associated equipment.

18, Procedures and security standards to protect the licensee's Internet
gaining website and Intemet gaming devices and associated equipment

from tampering by any person,

19, Procedures for responding to suspected or actual tampering with a
licensee’s Intemet gaming website and Intemet gaining devices and

associated equipment, including partial or complete suspension of

Internet gaming or the suspension of any or all player internet gaming,

accounts when warranted.

jions. ~

1. The board shall review each submission required by subsections (a)

and (b) and shall determine whether the submission conforms to the

requirements of this Act and regulations promulgated by the board and
whether the system submitted provides adequate and effective controls

for Intemet gaming operations of the particular licensee,

2. If the board determines that insufficiencies exist, it shall specify the

insufficiencies in writing to the licensee, who shall make appropriate

alterations to ensure compliance with the requirements of this chapter and
regulations of the board. When the board determines a submission to be

adequate in all respects, it shall notify the licensee,

3. Except as otherwise provided in subsection (a), no licensee shall
commence or alter Internet gaming operations unless and until the system

of procedures, controls and alternations is approved by the board.

SECTION 20. Internet games and Internet gaming devices and associated equipment
testing and certification standards.
a) Testing required. —

1. No Internet game or internet gaming device or associated equipment
shall be used to conduct Intemet gaming unless it has been tested by the

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board. The board may, in its discretion and for the purpose of expediting
the approval process, refer testing to any testing laboratory as approved
by the board,

2. The board shall establish, by regulation, technical standards. for

approval of intemet games and Internet gaming devices and associated

equipment, including mechanical, electrical or program reliability
security against tampering and threats, the comprehensibility of wagering
and noise and light levels, as it may deem necessary to protect the
registered player from fraud or deception and to ensure the integrity of
Internet gaming.

b) Independent testing and certification facility. - Any costs associated with the
board's testing and certification facility shall be assessed on persons authorized by the board to

distribute or otherwise provide Intemet games and Internet gaming devices and associated

equipment to licensees, ‘The costs shall be assessed in accordance with

board,

a schedule adopted by the

ECTION 21. . Internet gaming Certificate fee. ~

4) Amount of Certificate fee. - Each applicant that is issued an Intemet gaming

certificate to conduct Internet gaming in accordance with this Act shall pay a one-

time non refundable fee in the amount of (insert amount),

shall be remitted

b) Payment of fee, - The authorizati

to the board within 60 days of the board's approval of the application to conduct
Internet gaming, ‘The board may allow the fee to be paid in installments, provided
that all such installments are paid within the 60-day time period and that the
installment payments are made in accordance with the terms of an agreement
between the board and the applicant that sets forth the terms of the installment

payment.

©) Renewal fee, - Notwithstanding any other provision of this chapter, an
applicant that has been issued an Intemet gaining certificate in accordance with
the requirements of this Act shah pay a renewal fee in the amount of (insert
amount) upon the renewal of its intemet gaming certificate in accordance with

this Act,

SECTION 2. Impact of Internet gaming, annual report. - Within sixty (605 days at the
end of one year after the commencement of internet gaming, the Board shah submit a report to the
appropriate congressional committees on the impact of Internet gaming on compulsive and

problem gambling and gambling addiction in the Philippines.
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SECTION 23. Prohibited acts; penalties ~

a)The penalty of imprisonment from five (S)years to ten (10)years or a fine
ranging from five million (Fhp5,000,000.00) pesos to ten million (Php
10,000,000.00) pesos to or both shall be imposed upon any person or entity who
knowingly operate, conduct, permit, or otherwise knowingly allow the operation
or conduet of any Internet gaming or Intemet game or an Internet gaming device

or its associated equipment without a valid internet gaming certificate issued by

the Board, The same penalty shall also be imposed:

i. In case of a juridical entity, the key employees who knowingly permit
the operation of an illegal Intemet game or an Internet gaming device or

its associated equipment

nanciers or Capitalist. - Any person who finances the operations of
any illegal numbers game.

ili, Protector or Coddler, - Any person who lends or provides protection,
or receives benefits in any manner in the operation of any illegal intemet

game.

b) The penalty of imprisonment from five (5) years to ten (10) years or a fine
amounting of one hundred thousand (Php100, 000.00) ot both shall be imposed
upon any parent, guardian or person exercising moral authority or ascendancy
‘over a minor, ward or incapacitated person, who induces or causes such minor,
‘ward or incapacitated person to commit any of the offenses punishable in this Act,
Upon conviction, the parent, guardian or person exercising moral authority or
ascendancy over the minor, ward or incapacitated person shall be deprived of
his/her authority over such person in addition to the penalty imposed.

c) The penalty of a fine amounting to one hundred thousand (Phpl00, 000.00)
pesos shall be imposed upon any licensed entity, gaming employee, key employee
or any other person to permit a Internet game or Internet gaming device or
associated equipment to be operated, transported, repaired or opened on the
premises of a licensed facility by a person other than a person licensed or
permitted by the Board pursuant to its rules.

4) The penalty of a fine amounting to five hundred thousand (Php 500,000.00)
‘pesos shall be imposed upon any licensed entity or other person who knowingly
manufacture, supply or place Intemet game or Intemet gaming devices or
associated equipment into play on the premises of a licensed facility without the
authority of the board,

©) The penalty of a fine amounting to five hundred thousand (Php500.000.00)

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pesos shall be imposed upon any licensed entity or other person who knowingly
manufacture, supply or place Intemet gaming devices or associated equipment
into operation ata licensed facility without the approval of the board.

f) The penalty of imprisonment from five (5) years to ten (10) years or a fine
ranging to five million (Php5, 000,000.00) pesos to ten million (Phpl0,
(000,000.00) pesos or both shall be imposed upon shall be upon a licensed entity

or other person who knowingly manu

uupply, operate, carry on or expose

cture,
for play Internet game or Internet gaming, device or associated equipment after the

licensee’s license has expired.

2) The penalty of imprisonment from Jive (S)years to ten (10)years or a fine
amounting to five hundred thousand (Php500,000.00) pesos or both shall be
imposed upon any person to knowingly alter, tamper or manipulate Intemet
gaming devices or associated equipment, including software, system programs,
hardware and any other device or equipment used in Intemet gaming operations,
in order to alter the odds or the payout of an Internet game or to disable the
Internet game from operating according to t he rules of the game as authorized by
the board.

h) The penalty of imprisonment from five (5) years to fen (10) years or a fine
ranging from Jive million (Php5, 000,000.00) pesos to ten million (Php
10,000,000.00) pesos or both shall be imposed upon any person who knowingly
offer, or allow to be offered, any Internet game that has been altered, tampered
with or manipulated in a way that affeets the odds or the payout of an Internet
‘game, or disables the internet game from operating according to the rules of the

game as authorized by the board.

i) The penalty of imprisonment from five (S)years to ten (10)years ot a fine
ranging from five million (Php5,000,000.00) pesos to ten million
(Php10,000,000.00) pesos or both shall be imposed upon any licensee or
employee of a licensee who knowingly allows a person under 18 years of age to
‘open, maintain or use an Internet gaming account, except that the establishment of
all of the following facts by a licensee or employee of a licensee shah constitute a
defense to any regulatory action by the board or the penalty authorized under this

section:

i. the underage person falsely represented that he was of the permitted 18
‘years of age in the application for an Internet gaming account; and

ii. the establishment of the Intemet gaming account was made in good
faith reliance upon such representation and in the reasonable belief that
the underage person was 18 years of age.

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SECTION 24. Liability of Government Employees and/or Public Officials. —

a) If the operator or its key employee in any illegal internet gaming operation is a
government employee and/or public official, whether elected or appointed shall
suffer the penalty of twelve (12) years and one (1) day to twenty (20) years and a
fine ranging from Three million pesos (P3,000,000,00) to Five million pesos

$,000,000.00) and perpetual absolute disqualification from public office.

In addition to the penalty provided in the immediately preceding section, the

accessory penalty of perpetual disqualification from public office shall be

imposed upon any local goverment official who, having knowledge of the

existence of the operation of any illegal numbers game in his/her jurisdiction, fails

to abate or to take action, or tolerates the same in connection therewith.

) In the case of failure to apprehend perpetrators of any illegal numbers game,
any law enforcer shall suffer an administrative penalty of suspension or dismissal,

as the ease may be, to be imposed by the appropriate authority

{CTION 25. Immunity from Prosecution, _~ Any person who serves as a witness

for the government or provides evidence in a criminal case involving any violation of this Act, or

who voluntarily or by virtue of a subpoena testificandum or duces tecum, produces, ident

aiives testimony shall he immune from any criminal prosecution, subject to the compliance with the
provisions of Presidential Decree No, 1732, otherwise known as Decree Providing Immunity from

Criminal Prosecution to Government Witnesses and the pertinent provisions of the Rules of Court,
SECTION 26. Prosecution, Judgment and Forfeiture of Property. ~ Any person
may be charged with or cot i vie ted of the offenses covered by this Act without prejudice to the

prosecution of any act or acts penalized under the Revised Penal Code or existing laws.

During the pendency of the ease, no property or income used or derived therefrom which

may be confiscated and forfeited shall be disposed, alienated or transferred and the same shall be i

custodia legis and no bond shall be admitted for the release of the same.

‘The trial prosecutors shall avail of provisional remedies provided for under the Revi

Rules on Criminal Procedure.

Upon conviction, all proceeds, gambling paraphemalia and other instruments of the crime

including any real or persona! property used in any illegal intemet, game operation shall be
confiscated and forfeited in favor of the State. All assets and properties of the accused either owned
or held by him/her in his/her name or in the name of another person found to be manifestly out of
proportion to his/her lawful income shall be prima facie presumed to be proceeds of the offense
and shall likewise be confiscated and forfeited

favor of the State.

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In all cases, ten percent (10) of the value of any property forfeited in a final and executory order

nal Police (PNP) to

under this Act shall be earmarked as additional funding for the Phi

be used for law enforcement purposes.

SECTION 27. Witness Protection. —Any person who provides material information,

whether testimonial or documentary, necessary for the investigation or prosecution of individuals

committing any of the offenses under Sections 3, 4, 5 and 6 herein shall he placed under the

Witness Protection Program pursuant to Republic Act No. 6981-

SECTION 28. Rules and Regulations. - The Board, together with the Department of
Interior and Local Government, the Department of Trade and Industry, and in consultation with the
Philippine National Police [PNP), shall promulgate the rules and regulations for the

implementation of this Act

SI

ECTION 29, Separability Claus

unconstitutional, the remainder of this Act or the provisions not otherwise affected shall remain

= If any provision or part hereof is held invalid or

valid and subsisting,

SECTION 30. Repealing Clause. - All laws, decrees, orders, rules and regulations or

parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 31. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

publication in at least two (2) newspapers of general circulation.

Approved,

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