After being mired in irregularities in past years, the Philippine Charity Sweepstakes Office may get a much-needed update in its charter to help it keep up with new variations of lotteries and make it more accountable.
Senate Bill 1470, filed by Sen. Panfilo M. Lacson, also gives the agency – whose present charter dates way back to 1954 – a new name: the Philippine Charity Office.
“The provisions in this bill allow the PCSO Charter to adapt to the changing system of and emerging variations of lotteries and similar activities. The bill also seeks to strengthen the Charter by one, making the PCSO more accountable to the public; and two, limiting its discretion in the distribution of its funds,” Lacson said.
[Download: Senate Bill 1470, Philippine Charity Act of 2017]
Under the bill, the proposed PCO’s primary mandate will be to raise revenues to fund health programs, medical assistance and services, and related charities of government.
PCO will be the sole entity authorized to promote, organize, operate, hold and conduct lotteries, sweepstakes and similar activities in the country. It may also engage in health and welfare-related investments and programs, including profit-oriented ones.
“No person or entity may operate, hold and conduct national lotteries, sweepstakes and other similar activities except for the Office. National lotteries, sweepstakes and other similar activities are to be operated nationwide and/or regionwide and on such type, frequency, price of tickets and prizes determined by the Board. If feasible, the Office may conduct sweepstakes and similar activities in provinces, cities or municipalities,” Lacson said in his bill.
He added the PCO may promote and conduct online lotteries through internet or other remote technological communication that may be discovered. For this, the bill provides for a secured central computer system for the PCO.
Meanwhile, the PCO shall withhold a 10-percent tax for winning tickets.
The PCO will have a five-member board of directors appointed by the President. The board’s powers include adopting policies to promote the government’s charitable activities; controlling and supervising the operation of lotteries, sweepstakes and similar activities; and adopting programs to eliminate illegal numbers games.
Other powers of the board include issuing licensing to agents, and making a continuous study and investigation of lottery in the country.
Members of the board should be citizens and residents of the Philippines, “without political affiliation.” They will have fixed terms of office and shall elect among themselves the chairman of the board. The board will also appoint a general manager for the PCO.
The PCO board may also establish lotteries that shall only be held locally within a town, city or province. It may grant licenses to agents to conduct such local lotteries.
Local government units with jurisdiction over areas where local lotteries are to be operated should be consulted first. They will also be entitled to seven percent of the gross sales/receipts from their locality.
Of the seven percent share, two percent will go to the barangay, four percent to the town or city, and two percent to the province. The towns or cities shall give 20 percent of their share for peace-and-order councils.
“The amount received by the LGUs shall only be used to fund their healthcare or medical programs and services, provided that the municipality or city shall appropriate 20 percent of their share for the programs, activities and projects of their respective Peace and Order Councils,” Lacson said.
However, the PCO may conduct an audit on the proper use of funds received by local government units where local lotteries are held, with the release of shares of LGUs being automatically suspended if there are irregularities.
Licensed authorized agent corporations shall be owned fully by Filipinos and duly registered with the Securities and Exchange Commission or Cooperative Development Authority.
The PCO may authorize agents to sell tickets, including those for online lottery. Agents are to operate only in the location stated in their licenses. They are to give a bond, fee, guarantee or other security instrument before getting their licenses.
Lottery agents are entitled to a commission worth at least five percent of the cost of the ticket. The agents are also entitled to a share of 0.5 percent of the winning ticket.
The bill penalizes with imprisonment of one to three years and a fine of P500,000 to P1 million the selling of tickets or giving of prizes to minors, members of the board or PCO employees; lottery agents and AACs extending credit or lending money to buy tickets; and government officials or employees whose names appear on tickets or pay slips of lottery games or on any prize or instrument used for payment of prizes.
Unlicensed agents or AACs face imprisonment of six to 12 years, and a fine of P5 to P10 million.
To ensure accountability, a Commission on Audit representative is required to be present at drawings or selections of winning tickets. Otherwise, such drawings will be void.
Of the sales receipts, 55 percent will constitute the prize fund, and prizes not claimed one year after the draw shall be forfeited and made part of the charity fund. Another 30 percent will go to the charity fund for health care or medical programs. Meanwhile, 15 percent will go to operating expenses and capital expenditures of the PCO. No more than two percent will go to the printing cost of tickets.
The PCO shall deposit 75 percent of the charity fund to the Philippine Health Insurance Corp., for medical assistance to indigents. Another 15 percent will go to public hospitals and rural health care units and public health care facilities. Another eight percent will go to the Department of Health for free medicine and medical equipment such as wheelchairs. Meanwhile one percent will be deposited to the Department of Social Welfare and Development. Another one percent will be deposited with the Philippine Council for Health Research and Development.