SC orders Pagcor, PCSO to remit funds to Philippine Sports Commission

The Supreme Court has affirmed its ruling directing the Philippine Amusement and Gaming Corporation (Pagcor) and the Philippine Charity Sweepstakes Office (PCSO) to remit portions of their revenues to fund the Philippine Sports Commission (PSC).

In a resolution dated 7 October 2025, the high court en banc denied the motions for reconsideration filed by Pagcor and PCSO, reiterating that funding for the PSC is mandatory and grounded in law. The resolution was written by Senior Associate Justice Marvic Leonen.

The court stressed that the PSC’s creation is supported by the Constitution and that Pagcor and PCSO cannot refuse to carry out their statutory obligations.

Pagcor had argued that the ruling should be applied prospectively, warning that retroactive application would result in over-remittance to other obligations and possible overpayment of income taxes. It also said payments of franchise tax and the national government’s income share should be prioritized before remittances to the PSC.

The Supreme Court rejected these arguments, noting that the PSC’s charter, Republic Act No. 6847, clearly mandates that the commission receive 5 percent of Pagcor’s gross income, without stating that the computation should be made after franchise tax deductions.

Pagcor’s claim of unfair burden due to retroactive application was likewise dismissed. The court said Pagcor itself had recommended the incorrect interpretation of remittance rules to the Office of the President.

The ruling stated: “It made its proposal despite the clear mandate in legislation. Therefore, PAGCOR cannot rely on the doctrine of good faith, as they were directly involved in proposing the incorrect interpretation.”

The court also ruled that concerns over potential income tax overpayments were speculative and did not exempt Pagcor from complying with its obligations. It added that while prospective application could cause inconvenience and added expenses for Pagcor, the company’s prolonged improper remittances had caused direct harm to the PSC and its beneficiaries.

PCSO’s separate motion, which argued that PSC allocations should come only from sweepstakes draws and not from lotto operations, was also denied. The court said the law should be interpreted to include lotto draws as a source of remittance, warning that distinguishing between “sweepstakes” and “lottery” would create an exception not provided by law.

While acknowledging PCSO’s reported remittances to the PSC, the court said the agency must still show that the amounts correspond to 30 percent of the net proceeds of six sweepstakes or lottery draws per year, as required under the PSC charter.