Supreme Court Ruling Leaves SAGE in the Cold

The 15-member Philippine Supreme Court upheld a lower court ruling last week that prevents Sports, Games and Entertainment Corp. (SAGE) from operating online gaming ventures in the country.

The court ruled "with finality" that SAGE can not operate an online franchise through its agreement with Philippine Amusement and Gaming Corp. (Pagcor), a company (partially owned by the government) that has been contacted to oversee gambling activities in the Philippines.

SAGE filed a motion with the Supreme Court after a lower court ruled that Pagcor had overstepped it bounds and acted "beyond the limits of its authority," when it permitted SAGE to operate Internet sports betting and gaming stations.

The court said that SAGE did not present substantial arguments to warrant the reversal of its original decision.

The case came to light when former senator Robert Jaworski filed a motion in the lower courts to have the SAGE franchise voided on the basis that SAGE abused its powers. Jaworski, who chaired of the Senate Committee of Games, Amusement and Sports at the time, vehemently opposed the contract between Pagcor and SAGE and vowed to have it voided through the judicial system.

Pagcor's board of directors on March 31, 1998 approved SAGE's contract to operate only Internet gambling outlets. SAGE, meanwhile, had been operating its online services in shopping malls and other public outlets.

Jaworski argued, and ultimately the court agreed, that SAGE was only permitted to operate in casinos and that the "franchise cannot be delegated." The court said that only Congress could grant franchises on games of chance and that SAGE had no authority to use the Pagcor franchise beyond its initial intent.

If SAGE wishes to operate its business as it had been--in shopping malls and other public outlets--then it should seek a separate franchise from Congress for those activities, the court said in its final ruling.

Jaworski voiced his approval of the court's decision to an assembly of media gathered outside the courthouse after the ruling was handed down.

"All I ever wanted was companies to follow the proper procedures we had established in Congress," he said, "and clearly SAGE hadn't done that."

Officials with SAGE had no comment on the ruling, but the company is expected to seek additional franchises from the government to operate its Internet-based gambling and betting operations in malls and other public venues.