Accredited Service Providers Association of Pagcor reacts to Carpio: No ‘invisible hand’ in Pogos

THE great Adam Smith, known as “The Father of Economics,” wrote about the invisible hand in his book, “The Wealth of Nations” in 1776.

It is an economic concept carried on for centuries, studied to this very day, yet misinterpreted by few, including Supreme Court justices. Smith hypothesized that society benefits from the individuals’ self-interested actions, free from any form of regulation.

The invisible hand has become an argument against government regulation, suggesting that self-centric activities can redound for the greater good (i.e., pursuit of my business for profit has unintended benefits such as jobs creation and fiscal revenue for the government).

Justice Antonio Carpio, in his column titled “The invisible hands in Pogo” (published May 7, 2020), misapplied this concept, suggesting that there are invisible hands allowing Philippine offshore gaming operators (Pogos) to exist legally when, in his opinion, these exist without basis in law.

With due respect to the former acting chief justice, the concept of “invisible hand” directly contradicts his position because if indeed we stick to Smith’s definition then Pogos must be allowed to operate free from government restrictions and hindrances.

Carpio continued in his column saying that it is impossible for Pagcor to authorize Pogos since its charter states that Pagcor may only license gaming casinos within the territorial jurisdiction of the Philippines.

Carpio is not mistaken in saying this was mentioned in Presidential Decree No. 1869 enacted in 1983, but if he thinks that gaming laws must remain as it was 37 years ago, then he is wrong.

With the changing times, the Pagcor charter has undergone amendments to meet the changing times, the latest in 2007 with the passage of Republic Act No. 9487. Further, Congress enacted laws that authorized certain freeport zones to license gaming in their respective jurisdictions, e.g. Ceza, Apeco, and Afab.

Just as Smith’s invisible hand, people found ways to earn money in their self-centered ways and came up with different forms of illegal gaming through the use of online technologies.

To help remedy this, President Rodrigo Duterte issued Executive Order (EO) No. 13 in 2017 to intensify efforts to fight illegal gaming.

In this EO, online gaming was clarified: Online gaming operators may not accept bets from persons who are outside the territorial jurisdiction of the three economic zones (e.g., Ceza, Apeco, and Afab) within the Philippines, but they are allowed to accept bets from persons physically located abroad. Has there been any question about EO 13? None.

Carpio is free to file a petition to challenge the constitutionality of EO 13. The fact remains that there exists not a single law issued by Congress, or ruling of the Supreme Court, declaring Pogos to be illegal.

Carpio’s second point, in his column, is that Pogos cannot comply with the requirements of Pagcor, as stated in its Offshore Gaming Regulatory Manual issued in 2018, that mandates the submission of a license from a foreign jurisdiction. He even quips that the licenses submitted by Pogos are “obviously fake.”

Most certainly, Pagcor cannot take judicial notice of the inauthentic documents submitted before it as it has to be disputed on record and proven as such. In any case, the government has been coordinating with the Chinese Embassy in cracking down against illegal online gaming, while allowing the legitimate ones to continue their operations.

The third and fourth points of Carpio grasp at straws. He cites Article 195 of the Revised Penal Code, an even older law (1930), that penalizes gaming, referring to “monte, jueteng, xxx… dog races, or any other game of scheme.”

Of course, this law has been superseded by the passage of the Pagcor Charter, its amendments, and the charters of the aforementioned economic zones. Further, no gaming takes place in Pogos since these are back-end operations, similar to BPOs, of licensed gaming operators located abroad.

Not known to many, Pogos in the Philippines handle voice departments for marketing, technical support, monitoring of accounts, and database management.

Bettors who are overseas do not transact or place bets in the Philippines, rather, Pogos provide the content for foreign gaming operators, again, just like BPOs.

Lastly, Carpio mentions the Cybercrime Prevention Act, as it increases the penalty of crimes committed through the use of information communications technology.

This is patently inapplicable since there is no crime of gaming to speak of. The operations of Pogos are all aboveboard, in compliance with government regulations, and there is no Filipino citizen or foreigner located on Philippine soil engaged in any form of online gaming.

There is therefore no “invisible hand” portrayed by Carpio. We have instead a government that allows business to thrive well enough for it to become a multibillion-peso industry.

In 2019 alone, Pogos contributed P7 billion to government revenue, and this amount is expected to rise in the years to come. Money aside, one cannot discount the truth that Pogos provide jobs to the Filipino people and is an economic stimulant, much needed now in the time of COVID-19.

We invite our countrymen to help Pogos succeed in the Philippines. While there are socio-economic impacts, these are expected in new businesses.

Pogos are ready to work hand-in-hand to prosecute illegal activities said to be associated with the gaming industry. It is our sincere goal to uplift the lives of Filipino people and for them to have a future in Pogos so they can provide well for their families and society.

Atty. Margarita Gutierrez,

Accredited Service Providers Association of Pagcor,

secretariat@mngutierrezlaw.com