The Supreme Court has finalized its ruling mandating the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) to remit a significant portion of their revenues to the Philippine Sports Commission (PSC).
In a resolution made public Wednesday, the high court denied motions for reconsideration filed by both agencies, emphasizing that funding for the PSC is a “mandatory and statutory” obligation under the Constitution and Republic Act 6847.
The resolution, written by Senior Associate Justice Marvic Leonen, rejected PAGCOR’s argument that the ruling should only apply prospectively. PAGCOR had claimed that retroactive payments would lead to tax overpayments and an unfair financial burden.
However, the court cited that PAGCOR itself had proposed the incorrect interpretation of its remittance obligations to the Office of the President.
“PAGCOR cannot rely on the doctrine of good faith, as they were directly involved in proposing the incorrect interpretation,” the court stated. The justices added that while the ruling might cause “expenditures” for PAGCOR, the agency’s “prolonged improper remittances caused direct harm” to the PSC and the nation’s athletes.
The court clarified that the PSC is entitled to 5 percent of PAGCOR’s gross income, calculated before the deduction of any franchise taxes.
The high bench also dismissed the PCSO’s argument that its contributions should be limited to traditional sweepstakes draws and not include lotto revenues. The court ruled that the term “sweepstakes” in the law should be interpreted to include lottery draws.
The PCSO must now demonstrate that its remittances correspond to 30 percent of the net proceeds from six sweepstakes or lottery draws per year, as mandated by the PSC charter.
The Supreme Court underscored the PSC’s vital role in youth development and improving the international performance of Filipino athletes, asserting that the state gaming agencies cannot refuse to carry out their legal duties.