Losing STL bidder sues PCSO

SMALL Town Lottery draw at ZFIC Iloilo Gaming Corp.’s main office in Jaro, Iloilo City. The Iloilo City-based firm also tried to bag the rights to operate the legalized numbers game in Iloilo province but lost to Red Subay Gaming Corp. (Screen grab from ZFIC Iloilo Gaming Corp. Facebook page)

THE gambling firm who tried but failed to secure the rights to operate the Small Town Lottery (STL) in Iloilo province has hauled the Philippine Charity Sweepstake Office (PCSO) to court over the latter’s decision to award the franchise to another outfit.

In July 2018, reports circulated that ZFIC Iloilo Gaming Corp., the sole authorized agent corporation (AAC) of STL in Iloilo City, wanted to secure the provincial franchise following the termination and cancellation of the franchise awarded to Eagle Crest Gaming and Holding Corp. (ECGHC) in May 2018.

Under current PCSO rules, only one AAC can operate STL in a local government unit.

On August 9, 2018, the PCSO Board of Directors formally awarded the provincial STL rights to the Marasigan-led Red Subay Gaming Corp. (see banner story).

PCSO records indicated that 16 corporations, including ZFIC and Red Subay, signified their intention to operate STL in Iloilo province.

ZFIC offered the highest bid of P120 million PMRR or P4 million PMRR sales a day.

The PMRR is the “sales quota” that an AAC must remit to the PCSO to continue operating STL in an area.

ZFIC could have bagged the franchise if not for one stumbling block, and a big one at that.

Based on latest reports, the firm suffered a PMRR sales shortfall of P279 million (as of July 2018) since it started operating in March 2017.

The PCSO board was inclined to award STL operations in Iloilo province to ZFIC if the company pays its shortfall.

The company reportedly agreed to pay once they get the contract.

“They must show first good faith by paying the shortfall,” a source privy to the bidding process told TDG.

But ZFIC only paid P55 million.

“The PCSO apparently saw no good faith that they didn’t pay a higher amount… like say, P100 million,” the source added.

Earlier reports said the only way for PCSO to award ZFIC the rights to operate STL in the province is by paying their PMRR sales and the P120 million cash bond and the permit to operate fee.

Two other companies offered a P111-million PMRR and one of them is Red Subay which bagged the STL franchise.

LEGAL BATTLE

After learning that PCSO gave the rights to a rival firm despite paying P55 million, ZFIC reportedly filed cases against PCSO officials.

Almost two weeks ago, they firm allegedly sought a temporary restraining order (TRO) from the court in a bid to stop PCSO from awarding the STL franchise to another company.

ZFIC also filed an injunction and a mandamus case to compel PCSO to give the franchise to them.

But reports indicated that the court junked the firm’s TRO petition.

BIDDERS

One of the 16 companies who made a bid for STL operations in Iloilo province was Yetbo Gaming Philippines Corp., the AAC in Aklan province, but it only offered a P40-million PMRR.

PCSO terminated and canceled its agreement with Eagle Crest Gaming and Holding Corp. (ECGHC) allowing the latter to operate STL in Iloilo province due to PMRR shortfall.

The termination came after ECGHC failed to comply with the “post-approval requirements pursuant to the pertinent provisions of 2016 Revised IRR (Implementing Rules and Regulations), through Resolution No. 0023 (2018).”

Eagle Crest set its PMRR at P89,543,961 or an average of P3 million a day.

Records showed that the firm suffered a PMRR sales shortfall of P554,112,552.60 from January to December 2017 while its shortfall for January and February 2018 totaled P106,287,981.

A notice of termination dated March 22, 2018 was sent to ECGHC and the firm was given five days to submit a motion for reconsideration.

At that time, their balance based on their shortfall is P256,504,389.68, after making an updated payment of P3 million.

But the PCSO pushed through with the cancellation after ECGHC did not meet PCSO’s requirement to pay half of its shortfall and pay the remaining amount within a certain period of time, on top of meeting its PMRR.

ON TARGET

Ilonggo lawyer Rommel Duron, legal counsel for Red Subay, said they can meet their nominated PMRR despite the shortfalls suffered by ZFIC and Eagle Crest.

“The bid was done after we conducted a feasibility study,” Duron said.

He claimed that their feasibility study took into consideration the total number of registered voters in Iloilo province.

While the PCSO suggested three STL draws per day, Duron said they might opt for two draws only, the same frequency that Eagle Crest adopted.

He added that the P111-million PMRR is within target if only the local government units (LGUs) and the PNP would help them out.

How?

“By running after bookies operations,” Duron added.

Duron said Ilonggos can expect that illegal gambling will be minimized once Red Subay starts operating.

“As much as possible we want to eliminate the illegal gambling because that is the purpose of STL, to counter jueteng and others,” he said.

SOURCE: The Daily Guardian

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