The Office of the Government Corporate Counsel has won for the Philippine Charity Sweepstakes Office an arbitrary case filed by the Philippine Gaming Management Corp. in connection with the charity agency’s project to modernize its online lottery games such as Lotto, Digit Games, Keno, and Small Town Lottery.
In a statement, the Makati City Regional Trial Court (Branch 143) issued an order dated May 25, 2018, confirming the arbitral award of the International Chamber of Commerce-International Court of Arbitration.
The OGCC team that represented PCSO during the arbitration is composed of Deputy Government Corporate Counsel Elpidio J. Vega, assistant government corporate counsel Efren Gonzales, government corporate attorneys Aniceto Calubaquib, Jr., Fiona de Leon, and Abegail Joan Orilla-Orara with Attorneys Anna Liza Inciong and Leah Christine Jimenez of the PCSO Legal Department.
Since the start of lotto games more than 20 years ago, the PCSO opened for the first time in 2017 the public bidding for the supply and delivery of its Nationwide Online Lottery System, where 17 bidders properly secured bid documents.
However, Makati City Regional Trial Court Branch 143 Presiding Judge Maximo de Leon granted on August 3, 2017 a temporary restraining order filed by PGMC against the bidding for the five-year lease of the NOLS, with an approved budget for the contract amounting to P10.906 billion.
In February this year, the ICC-ICA Arbitral Tribunal rendered a ruling favorable to PCSO declaring that PGMC does not have an exclusive contractual right to supply an online lottery system for Luzon.
“The Tribunal thus dismissed PGMC’s P7.6 billion claims for damages against PCSO. The agency was awarded reasonable costs and expenses amounting to P53.5 million. PGMC will also reimburse US$200,000 for our share of the advance costs,” said PCSO General Manager Alexander Balutan.
Currently, PCSO has two existing lottery systems. For Luzon, it’s with PGMC, owned by Berjaya, a foreign company from Malaysia allegedly backed by a former president, and will end on August 21, 2018. For Visayas-Mindanao, it is held by Pacific Online System Corp., and will expire on July 31, 2018.
“NOLS has a lower rate compared with the existing system. The system will be implemented nationwide, it will be accessible to the public. Meaning if you buy your ticket in Visayas or Mindanao, you can have it validated here in Luzon,” explained Arnel Casas, assistant general manager for gaming sector.
In the existing system, when one buys in the Visayas, he cannot validate the winning ticket in Luzon because it uses a different system. He has to go to PCSO main office, where all validating machines are available to confirm his ticket.
Compared to NOLS, it has only one system and can validate all tickets bought from all over the country.
Casas also added that the new ticket system will have added security features. One can easily check if it’s authentic or not to prevent players from counterfeiting winning lotto tickets.
When that happens, players holding fake tickets will be referred to the National Bureau of Investigation or authorities.
“Sometimes they have a newspaper, let’s say the win second prize worth P100,000, and then sell it in the province, saying they have no capability to go to Manila to claim their prize. They will only ask P5,000 from a person for them to claim the ‘winning’ ticket, but when we check here, the ticket will be found a fake,” Casas revealed.
PCSO is strictly implementing a policy that winners can only claim jackpot prizes at the main office. For consolation prizes of P10,000 and below, they can be claimed at any Lotto outlet, while for prizes amounting to P200,000 or P300,000, they can be claimed at the branch offices.
Based on OGCC’s records, the arbitration case at the ICC-ICA is one of the largest cases the OGCC won in the past decade.
While this is good news for PCSO, Casas said the agency has to start all over again with the preparation of terms of reference (TOR), technical specifications, and the bidding, which has already been started early last year.
Last year, 17 proponents already brought bidding documents. However, during the pre-bidding conference to clarify issues and concerns and the TORs, another 30 bidders came, filling up the entire space at PCSO’s conservatory office.
After the pre-bidding conference, a clarificatory conference followed at the Legend Villas for a bigger venue, but it was stopped due to the injunction case filed by PGMC. Failure to stop the proceedings will amount to contempt of court on the part of PCSO.
“We’ve prepared for this since 2012 in anticipation of the expiration of the contract of PGMC and Pacific Online this year. The bidding actually started early last year of 2017. Now with this new development, we can now proceed with the bidding,” Casas said.
Bidding process usually takes six to eight months; while the transition period from old to the new system usually takes another eight to 10 months.
