SUDDENLY, the major traditional and nontraditional news outfits come out on Monday morning with almost the same and uniform news story that the Philippine Amusement and Gaming Corporation (Pagcor) supports the proposed legislation to reform online gaming (or gambling), but not an outright total ban. Traditional newspapers and online publications came out with almost the same message quoting Pagcor chair and chief executive Alejandro Tengco Jr. that he favors restrictions, albeit cosmetic, on online gaming but he disapproves of its outright ban as some lawmakers have suggested.
There is actually no question yet on the proposed legislations on how the government would control a reformed online gaming sector, which is currently a growth sector by all means. The most basic question is whether Pagcor, under Alejandro Tengco Jr., or his future replacement, could regulate the online gaming sector, which is proving to be a good source of revenues for the cash-strapped government.
It has been widely perceived that Pagcor hardly regulates. It is a victim of what could be called a “regulatory capture” by the online gaming firms Pagcor is supposed to regulate. It is helpless, powerless, or a failed agency when doing its regulatory powers on the online gaming sector. Regarding its media offensive, Pagcor is an institutional advertiser that allows a propaganda blitz to air its stand on the proposed reforms of the online gaming business.
Traditional economics defines “regulatory capture” as sort of corruption of authority when a regulatory agency is coopted by the commercial, ideological, or political interest of a minor constituency that includes a firm, or groups of firms, interest group, or even a sector. Regulatory capture happens when a regulatory agency favors the special interests of these firms and groups over the general interest of society.
There is no point for Congress to come out with a new law reforming online gambling when Pagcor could not enforce these reforms. The best proof of Pagcor’s inability to enforce its current rules is when existing online gaming firms hardly pay winners of their gaming platforms. The experience of an online gaming aficionado, whose prize of P493.6 million was not paid by DigiPlus Interactive is a case that Pagcor has to address if it wants to prove that it is capable to enforce those reforms.
So far, Pagcor has been helpless to address this issue despite the persistent efforts of the winner’s lawyer, Raenan Malig, to force Pagcor to attend to his client’s interest. According to insiders, Digiplus Interactive has at least 16 other complaints from online game winners, who claimed their prizes were not given by the firm. The claims ranged from a few millions of pesos to multibillion peso claims, the highest of which could reach P493.6 million.
Pagcor is officially oblivious and clueless to these complaints. Alfonso Tengco has yet to address the lingering issue of DigiPlus Interactive’s refusal to pay its online gaming winners. Malig, who does his practice in Angeles City, said his client, whom he did not name for security reasons, won P493,566,074.01 after he spun the Lucky Spin feature on March 26 and landed on the Ultimate Jackpot in the ArenaPlus platform. According to him, his client regularly participated in online games like baccarat and color games and frequently engaged in the Lucky Spin feature.
His client immediately took screenshots of the winning result, but he did not see the prize reflected in his account balance, prompting him to lodge a complaint in DigiPlus Interactive customer support service. According to Malig, his client talked to an agent named Dulce. The customer support requested a screenshot of the game summary, but this supposedly did not register the win despite the screenshot of his client, showing the jackpot win. After the interaction , the chat record was surreptitiously deleted from the system and his client could not retrieve the conversation, Malig said.
Malig said he submitted on March 31 a letter dated March 27 to Pagcor, requesting action on the noncredit of his jackpot prize. Pagcor confirmed receipt of the latter and forwarded it to the Electronic Games and Licensing Department and Security Group. An additional email from Pagcor indicated they were coordinating with DigiPlus Interactive on the issue, Malig said.
Subsequent communications came from ArenaPlus, Malig said. On April 8 at 10:01 am, Malig said his client received an email from ArenaPlus thanking him for reaching out to them despite the fact that he never did so. On the same day at around 2:34 pm, ArenaPlus sent a second email to his client “vagulely addressing certain issues in an attempt to brush aside his claim, without addressing the existence of screenshot showing [my client’s] spin landing on the Ultimate Jackpot in the amount of P493,566,074.01.”
There is no point to discuss and come out with a new legislation to institute new reforms on the online gaming business unless Pagcor remains to be a victim of regulatory capture. Whether these perceptions were true or not, Pagcor has to come out with the political will to enforce the proposed reforms.
At the moment, there is much sense to institute a complete and total ban on the online gaming sector. Al Tengco’s claim that it contributes at least P50 billion every year to the nation’s coffers should not be taken seriously as a factor to keep the online gaming business. It is not politically equipped to regulate the online gaming sector even with sufficient reforms. Congress should first address the issue of its regulatory capture before anything else.
