PAGCOR and the fate of SMS Gambling

As reported here earlier, PAGCOR was asking the NTC for the assignment of SMS access codes. Well, the Inquirer reports that PAGCOR wants the access codes merely to monitor games of chance, not to operate them. PAGCOR insists that games of chance will be offered by third party content providers.

I don’t believe them. Here’s why:

First, the Supreme Court earlier ruled that PAGCOR can’t authorize a third-party to operate games of chance because it constitutes a delegation of PAGCOR’s franchise. The High Court, through Justice Ynares-Santiago, said:

While PAGCOR is allowed under its charter to enter into operator’s and/or management contracts, it is not allowed under the same charter to relinquish or share its franchise, much less grant a veritable franchise to another entity x x x. PAGCOR can not delegate its power in view of the legal principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to show that it has been expressly authorized to do so.

So, even if it wanted to operate the access codes as mentioned, PAGCOR is not permitted to do so. 

Second, as far as I know, PAGCOR already has the capability of operating the games directly.  In fact, PAGCOR already tried to negotiate with the cellcos to provide the games directly.  Those negotiations obviously failed because PAGCOR would not abide by the cellco’s standard terms and conditions namely: (a) a 70-30 revenue share split (with the cellco getting 70% of the VAS fee of P2.50); and (b) a one year term.  Although seriously one-sided, many content providers have no choice but to sign on to these agreements.  PAGCOR had other levers to pull, namely, the NTC which may give it the access codes it needs to operate. 

Once those access codes are assigned (by force of NTC order), then PAGCOR can start operating its service without regard to the cellcos’ standard contract.  It would be first in the SMS content provider industry and certainly one that both cellcos will try hard to resist. 

I believe, however that if NTC takes any positive action in favor of PAGCOR, then it stands to contradict itself vis-a-vis its SMS policy.  Then again, it’s never been very stable.  Supposedly, SMS is a valued added service which means it’s “de-regulated”.  This explains why the NTC refused to intervene during the text reduction issue that flared up a few years ago.  You will recall that TXTPOWER had to sue in a QC court to stop the text reduction scheme only to refer the matter back to the NTC which, as expected, did nothing.  The “SMS is de-regulated” line was also bandied about when various politicians complained about SMS harrassment.    However, the NTC has seen fit to intervene in SMS by issuing rules on SMS promotions and text spam.  So, it’s really partially de-regulated.

Well, if SMS is “de-regulated”, then why is the NTC interceding in behalf of PAGCOR?  From a policy standpoint, it marks just how wishy-washy the NTC is when it comes to SMS.  Urong-sulong. 

Anyway, let’s see what happens next.