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Philippine Supreme Court Sides with PAGCOR in POGO Disputes

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The Philippines Supreme Court has reinforced Philippine Amusement and Gaming Corporation's (PAGCOR) authority in the country. This week, it dismissed a series of legal challenges against the gaming regulator to regulate online gambling operators in the country.

Supreme Court Throws Shade on PAGCOR Opposition

Local media reported that three petitions were filed against PAGCOR by the Union for National Development and Good Governance Philippines (Unilad), the Anti-Trapo Movement (ATM) of the Philippines Inc and lawyer Jovencio Evangelista. All three cases argued that PAGCOR lacked the legal power to oversee online gaming companies.

Related: PAGCOR to Shift to Solely Regulatory Role by 2025

The argument centered on the belief that online gambling wasn't explicitly mentioned in PAGCOR's charter established in 1983. Evangelista further argued that the 2007 amendments to PAGCOR's charter still did not include online gambling within its purview. As a result, the lawsuits said that the government agency doesn't have the legal authority to govern Philippine Offshore Gaming Operators (POGO) or Internet Gaming Licensees (IGL).

Unilad specifically contended that PAGCOR shouldn't be able to regulate online gambling aimed at foreign customers. At the same time, ATM argued that PAGCOR was exceeding its authority by granting licenses to other entities for online gambling operations.

PAGCOR, in its defense, pointed to its charter which grants it the authority to oversee all games of chance, with some exceptions. Among these are existing games at the time the charter was established and any new games that may emerge in the future.

The Supreme Court's decision in favor of PAGCOR hinged on the petitioners' bypassing the lower courts and going directly to the highest court. The Court ultimately dismissed all three petitions without addressing the constitutionality of the 2016 regulations governing IGLs.

PAGCOR Retains Legal Oversight

The Supreme Court justices pointed out that the petitioners failed to demonstrate a compelling reason for bypassing the lower court system. The petitions did not adequately explain why preventing PAGCOR from regulating and licensing online gaming companies was a matter of such national importance that it warranted immediate attention from the Supreme Court, bypassing the established hierarchy of courts.

The court's decision comes amid growing scrutiny of the online gambling industry in the Philippines, particularly concerning criminal activity associated with some POGOs. In response to these concerns, PAGCOR has undertaken efforts to clean up the industry. Last year, for example, the regulator placed all IGLs under a probationary status requiring them to undergo a stricter vetting process under revised regulations.

PAGCOR Chairman and CEO Alejandro Tengco reported last month that the stricter regulations have resulted in a significant decrease in the number of IGLs. The number of IGLs has been reduced from around 250 before the probationary period to just 75 new licenses being issued.

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