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Kevin Smith

Pagcor Calls Mobile Game Illega

13 February 2003

As far as jurisdictional reliability goes, the Philippines isn’t exactly at the top of the charts.

After all, it was only two years ago when the country’s president was overthrown, throwing the entire country, and its interactive gaming interests, into turmoil.

It didn’t come as much surprise to many in the industry then when the government-owned Philippine Amusement and Gaming Corp. (Pagcor) announced it was seeking damages from Globe Telecom Inc. and Smart Communications Inc. for what Pagcor officials described as operating illegal gambling services.

Pagcor is seeking a 20 percent share from the telecommunication companies' revenues from text games and filed a complaint before the Manila City prosecutor’s office.

Company officials with Pagcor said both companies are operating unlicensed games via mobile phones and feel that the companies should pay a fee. Pagcor cited various television game shows involving Globe Telecom where Globe subscribers reply to game show questions by sending text messages.

Pagcor public relations and advertising director Dodi King said as many as 50 text-based messaging games have been launched by Smart and Globe, which are aimed at promoting their mobile services. He said they have inadvertently entered into the gambling arena and feels the companies should be regulated as such.

Although court papers were filed, King is confident that an out-of-court agreement can be reached between Pagcor and all the concerned parties.

"All we want to do is regulate gambling for the public. All the parties are talking now, so it is OK," he said. "There are more than 50 game shows and text-based games now. Many of them are considered gambling. It's only proper for us to regulate these."

In fact King said that Smart has already agreed to terms with Pagcor and has affiliated itself with the gaming company.

"All Pagcor wants is for Smart and Globe to affiliate with us," he said. "We want them to pay the regulatory fees, and part of the income from text games, to the government."

Talks between Globe and Smart are underway and King is confident that a similar agreement will be reached.

"Everything is fine with the two providers," he said. "It is just a question of affiliation."

As part of the agreements with the providers, King said Pagcor is lobbying for a 20 percent share from the telecom companies' gross revenues from the text games.

As a government-run entity, King said Pagcor's revenues are remitted to the government for community work and others.

Also as part of the negotiations with the telecoms, King said they will be encouraged to issue public advisories informing consumers that they are taking part in a wireless game of chance. King said many users have complained that their prepaid credits for their calling plans dwindle at a higher rate than normal when they take part in the text games.

Eventually King hopes that both companies will come to Pagcor for approval before they launch new games that are tied to promotional activities and TV games shows.

Pagcor’s run-in with the telecoms is the second controversial issue surrounding the company within the last four months.

In November a Philippine senator took issue that Pagcor had licensed Sports and Games Entertainment Inc. (SAGE) to offer online gambling in the country. The senator, Robert Barbers, felt that the Senate should have licensed SAGE instead of Pagcor.

"Whether it is played through the computer or not, as long as it is supposed to be regulated by Pagcor, it should pass through Congress and acquire the pertinent legislative consent governing the same," Barbers said. "But as far as I know, any form of online casino or electronic gambling has never been a part of our agenda in the Senate."

It is unclear whether Barbers or anyone else in the Senate still has these sentiments and how that could affect the dealings with the wireless games.

Patrick Deakin, the COO of SAGE, told Interactive Gaming News that Barbers' predecessor in the Senate committee that oversees gaming and amusement expressed the same concern. The predecessor, Sen. Robert Jaworski, filed a suit in the Supreme Court to determine whether Pagcor has the authority to grant such a license. The case is still pending, Deakin said.

Pagcor Calls Mobile Game Illega is republished from
Kevin Smith
Kevin Smith