'Challenge illegal lotto, PCSO games shutdown before courts’

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Metro Manila (CNN Philippines, July 30) — A lawmaker and legal scholar prodded franchise holders and operators of lotto and other games licensed by the Philippine Charity Sweepstakes Office (PCSO) to go to court to challenge President Rodrigo Duterte's “illegal” order to shut down their operations.

“The courts are always here to be an arbiter of whatever the executive does. If it is not in consonance with the Constitution, it’s not in consonance with the laws,” Cagayan de Oro City 2nd District Rep. Rufus Rodriguez told CNN Philippines’ The Source on Tuesday.

Rodriguez believes that Duterte’s mere verbal order to close down PCSO-licensed games, supposedly due to massive corruption in the state lottery agency, is illegal and unconstitutional as it deprives franchise holders and operators of their right to due process.

READ: What's at stake as Duterte stops PCSO lotteries?

“If you believe that the franchise was secured by corruption or there was no remittance, therefore there has to be a notice from the other party, the franchise holder, for them to be able to explain why, whether their contracts are through corruption. Then after that due notice and hearing, then it can be cancelled, but only then,” Rodriguez said.

The lawmaker also encouraged the PCSO to file administrative charges against judges who appear to favor gaming operators and franchise holders in issuing temporary restraining orders in favor of them.

But Malacañang insisted that Duterte's order is legal and would not even need to be put into writing.

"Unang-una, 'yung PCSO ay nasa opisina ng Presidente. Siya ang may control sa provision ng lahat ng ahensya sa ilalim ng Office of the President. At 'yung mga tungkulin ng PCSO sa pag-provide ng medical assistance, social services, ito naman ay maaring i-redirect doon sa ibang ahensiya ng gobyerno," Presidential Spokesperson Salvador Panelo said during a Palace press briefing.

[Translation: Firstly, PCSO is under the Office of the President. He is in control over all agencies under the Office of the President. And the PCSO's duty to provide medical assistance and social services can be redirected to other government agencies.]

The police has closed down over 30,000 gaming outlets in just three days following Duterte’s order, which was released nearly at midnight on Friday via video post on social media.

The sweeping order covers all PCSO-licensed games, even if the agency's former chief Alexander Balutan said their only problem is small town lottery.

"Wala namang problema doon sa lotto, sa scratch, Keno, kasi fully automated ‘yan, transparent ‘yan at minimal na human intervention," Balutan told CNN Philippines' Balitaan.

[Translation: There are no problems with lotto, scratch games and Keno because they're fully automated, transparent and have minimal human intervention.]

The shockwaves of the order has reached the Supreme Court, which has ordered all courts to submit reports on pending cases involving the PCSO due to “serious allegations of massive corruption involving small town lottery and other gaming franchises issued by the PCSO, some of which have supposedly reached the courts.”

But Duterte’s verbal order continues to be questioned, with University of the Philippines College of Law Professor Rowena Daroy-Morales saying it should have been on paper.

Daroy-Morales added that those who were granted franchises and licenses should have been given proper lead time before the outlets were closed.

But University of Santo Tomas Faculty of Civil Law Dean Nilo Divina said Duterte had the right to shut down PCSO’s gaming operations as it is under his supervision and control.

However, Divina said Duterte’s right is “without prejudice to vested rights that have accrued in favor of legitimate operators under their existing license agreements with PCSO.”

The Justice department has also defended Duterte’s order, saying he could order the suspension of operations based on preliminary information available to him.

Under the PCSO charter, its board of directors, with the approval of the President, sets the date when the sale of lottery tickets will close and designates the dates and places where lotteries will be held.

Senator Christopher “Bong” Go, a longtime aide to Duterte, told reporters Monday that newly-appointed PCSO General Manager Royina Garma asked the President for help to shut down all gaming operations of the agency.

Sabi ni Pangulo noong nag-usap kami, maraming mga kontrata na hindi nila nami-meet ‘yung minimum remittances po ng govenrnemnt. Maraming may utang. ‘Yun muna pinapa-evaluate niya,” Go said.

[Translation: The President told me that a lot of contracts do not meet the minimum remittances to the government. A lot of them have debts. That’s what he wants to evaluate first.]

Rodriguez, however, said that this investigation should have come first, before Duterte’s order to close down PCSO’s gaming operations.

Over 500,000 Filipinos benefited from the medical assistance provided by the PCSO in 2018, when it earned ₱63.56 billion from all its gaming activities. It remitted 30 percent, or ₱18.69 billion, for charity programs and paid for the confinement, medicine, and chemotherapy and other medical procedures for indigent patients.

The Commission on Audit called out the PCSO in 2018, however, for using ₱5.89 billion of the charity fund for various purposes not related to health programs, medical assistance services, and other charities, violating its charter.

CNN Philippines’ Lara Tan, Tristan Nodalo and Eimor Santos contributed to this report.