|
By Roderick T. de la Cruz, Researcher
(First of Three Parts)
IN January 2001 a president was forced out of
Malacañang Palace on charges that he received millions of pesos in
kickbacks from illegal gambling.
A few months later, under a moral reformist
presidency, telecommunication and broadcast companies connived to
promote what turned out to be the most rampant form of gambling in
history in the guise of text gaming.
The Catholic Church and the usually vocal
private watchdog Kilosbayan largely kept silent about the new kind
of gambling, and the people knew nothing about it, until a most
unlikely protagonist, the Philippine Amusement and Gaming Corp. (Pagcor),
raised the alarm.
In a statement, Rafael Francisco, Pagcor
president and chief operating officer, said: “With the popularity
of text-based games especially on television, the government deemed
it right to assert Pagcor’s authority to operate and conduct all
games of chance in the country.”
It turned out that Pagcor reportedly blew the
whistle not to raise the moral awareness of the people, but to
corner a slice of the lucrative business ventures entered into by
the likes of Globe Telecom, Smart Communications, Philippine Long
Distance Telephone Co. (PLDT), ABS-CBN Broadcasting Corp., GMA
Networking Inc. and IBC 13.
Early this year, Pagcor filed cases against
Globe and ABS-CBN for violating Presidential Decree 1602, or the
Illegal Gambling Act. In June Pagcor withdrew its case against Globe
after the telecom giant agreed to share some of its text-based
revenues.
Edward F. King, spokesman for Pagcor, said a
landmark agreement was signed to put Globe’s text-based games
“with an element of wagering” under the control and supervision
of Pagcor.
The agreement, he said, was reached on June 24,
with the primary aim of “protecting the interests of the consuming
public.”
Asked for comment, Rodolfo A. Salalima, Globe
Telecom vice president for legal affairs, begged off. “Some other
time,” his appointment secretary quoted him as saying to the
Business Times.
As this report was being written, Pagcor and
ABS-CBN were finalizing an agreement that would put the top-rating
TV game show Game KNB? (Are you game?) under the regulation of the
government gambling firm. Without government regulation, Game KNB?,
which is hosted by the popular actress Kris Aquino, raked in at
least P300 million in 2002.
In its statement of assets and liabilities in
2002, ABS-CBN reported that its other broadcasting-related revenues
reached P395 million, which is seven times higher than the previous
year’s P51 million.
“Other broadcasting-related revenues are
primarily revenues from short messaging system [SMS] or text-based
revenues pioneered by the ABS-CBN Interactive. Bulk of text-based
revenues in 2002 was attributable to the company’s highly rated
game show Game KNB?,” ABS-CBS said in its financial statement.
The company also spent a lot for prizes to the
participants. “Other program expenses grew 27 percent to P671
million primarily owing to prizes paid out for the company’s
noontime variety show Masayang Tanghali Bayan [MTB] and top-rated
game show Game KNB?” it added.
To ensure that ABS-CBN would share its revenues
with Pagcor, the gambling firm also stated in its memorandum of
agreement with Globe that the latter should not renew its contract
with the producers and sponsors of the show until ABS-CBN gets a
certificate of affiliation from Pagcor. Globe, Smart, BayanTel and
PLDT are telecom partners of Game KNB?
In the first half of 2003, ABS-CBN’s
broadcasting-related revenues fell by three-fifths, to P103 million
from the year-ago figure of P169 million as Pagcor entered the
scene.
The contract of Game KNB? expires in October. As
this was being written, the Department of Trade and Industry (DTI)
was still regulating the show, despite an agreement between Pagcor,
the DTI and two other government agencies signed in December 2002.
According to Divina D. Capua, chief of DTI
consumer assistance and protection center, the department is tasked
to regulate text-based sales promotions pursuant to the Republic Act
7394, otherwise known as the Consumer Act of the Philippines and its
Implementing Rules and Regulations (DAO No. 2 S 1993).
But under the memorandum of agreement signed by
the heads of the four government agencies in December last year, it
was agreed that Pagcor would regulate or prohibit text-based schemes
found to be gambling. Pagcor insisted that Game KNB? had elements of
wagering.
Before this, Pagcor and Smart had an earlier
agreement. Reached for comment, Smart officials declined to respond
to questions posed by The Times. Pagcor is also in talks with
Smart’s mother firm, the publicly listed Philippine Long Distance
Telephone (PLDT).
PLDT was included on the list because it also
supported ABS-CBN’s Game KNB? and IBC 13’s defunct game shows
Who Wants to be a Millionaire? and The Weakest Link. It is through
PLDT’s text landline services like “Text 135” and premium
phone lines like “1-908” that most TV game shows drew millions
of participants.
Other companies like GMA 7, IBC 13, Bombo Radyo
and other radio stations that had also perpetrated text gaming are
not off the hook yet. The House Committee on Games and Amusement
wanted Pagcor to run after all alleged violators of Presidential
Decree 1602.
With Pagcor winning its legal disputes with at
least four industry giants, the question of whether text gaming is a
form of gambling has also been clarified. Globe and Smart now have
the sanctions of Pagcor, which is to say that some parts of their
operations really involved betting.
The public, including the 1.2 million
participants in Game KNB?, apparently does not know it yet.
The Department of Justice declined to issue a
legal opinion on the matter because Pagcor had elevated the cases to
the Office of the Prosecutor in Manila. The cases, however, were
eventually settled out of court.
At present, telecom firms and broadcast stations
dictate their own rules in text gaming, and Pagcor is appeased with
the fact that it will get 20 percent of all revenues from text-based
activities involving wagers.
Moralists find the situation disturbing in the
sense that industry people could easily lose their judgment of what
is wrong when it comes to raking in profits. They expressed dismay
over the fact that most broadcast stations quickly jumped into the
bandwagon of text gaming, without looking into its moral
implications.
The rise of text gaming
Text gaming was an offshoot from the popularity
of SMS that took the country by storm starting in 1997. By 2000 the
Philippines took pride in being tagged as the “text capital of the
world.”
By 2001 the number of mobile-phone users in the
country reached more than 10 million. Occupying the upper
socioeconomic ladder, these users have extra money to spend beyond
their basic needs. In texting alone, they spent a total of P100
million each day, P3 billion each month or a total of P36 billion in
2001.
It did not take long before Globe and Smart
became two of the most highly profitable companies in the land.
Imaginative people in the broadcast and
advertising industries quickly brought the popularity of text
messaging to television’s primetime slot.
GMA 7 introduced Txters 5, an interactive game
show hosted by Paolo Bediones. The program seduced viewers to send a
text message worth P5 each, in order to have a chance at winning
such prizes as five BMW sedans, bundles of cash and expensive
valuables.
Viva Television and IBC 13 ran two of the most
popular game shows in the country—Who Wants to be a Millionaire?
and The Weakest Link. ABC 5 and GMA 7 also introduced a number of
game shows.
Still popular until this was being written, Game
KNB? proved to be the most successful of the lot. At one time, the
show gave away P7 million in cash prizes, the largest in television
history.
Before the text-game controversy erupted in late
2002, there were reports in the House Committee on Games and
Amusements that Smart earned P6.2 million. Globe cornered P5 million
from their text game promos only in the first six months of that
year.
The real figures, however, could be much higher.
Globe and Smart, along with PLDT and BayanTel, are partners of Game
KNB?, which earned a total of P397 million in 2002 alone.
ABS-CBN’s and Smart’s revenue-sharing scheme
over text gaming turned sour this year. Smart wanted its revenue
share increased from 50 percent.
Legal disputes
Before Pagcor sensed elements of betting in text
gaming, the DTI had been receiving complaints from several people
who felt cheated by the game shows.
A group of Church leaders in the Visayas called
the attention of the media to the so-called text gambling. Their
complaints fell on deaf ears because the broadcast stations
themselves were being linked to the scandal.
As early as April 2001, an article in the
Internet (http://www.txtmania.com) accused the telecom firms of
engaging in gambling, with the sanction of the government and the
society at large.
On March 8, 2002, Rep. Magtanggol T. Gunigundo
of the Second District of Valenzuela filed House Resolution 00466,
which called for an investigation, in aid of legislation, into
“electronic gambling” being perpetrated by Globe and Smart.
Rep. Augusto Syjuco of Iloilo filed House
Resolution 473, which sought an inquiry into the raffles and
“games of chance” of mobile-phone-service providers using the
SMS.
On November 14, 2002, Sen. Robert S. Jaworski
filed Senate Resolution 476, which also called for an investigation
into text gaming as a possible mode of electronic gambling.
Jaworski expressed concern over the fact that
various forms of text gaming are made available to all
cellular-phone users “without regard to the age and status of the
participants.”
The legislators also questioned whether Globe
and Smart, which are not licensed like Pagcor and the Philippine
Charity Sweepstakes Office (PCSO), have the permit to operate
gambling.
In the hearing conducted by the House Committee
on Games and Amusements in March, Francisco directly said Pagcor has
jurisdiction over text games, because according to him, “these are
all forms of gambling.”
The hearing at the House was preempted by the
filing of cases by Pagcor against ABS-CBN and Globe. Meanwhile, the
Senate Committee on Games and Amusement has yet to act on
Jaworski’s resolution.
On March 5, Carlos Bautista Jr., Pagcor legal
counsel, filed a case against ABS-CBN officials, led by Eugenio
Lopez III, Augusto Almeda-Lopez, Oscar Lopez, Manuel Lopez Jr.,
Peter Garrucho, Albert Lopez, Federico Garcia and Manuel Lopez, for
violating PD 1602.
In June 1978 the late President Ferdinand E.
Marcos issued PD 1602, which prohibited any “game or scheme,
whether upon chance or skill, which does not have a franchise from
the national government, wherein wagers consisting of money,
articles of value or representative of value are made.”
Pagcor branded Game KNB? as a game of chance
that involves betting and as such, should be regulated by or
affiliated with Pagcor.
The case (03-06430) was filed at the Manila
Prosecutor’s Office and was handled by Bernardino L. Cabiles.
On August 21 Cabiles said Pagcor did not proceed
with the case against the broadcast station. “Nagkaayos na sila,”
he told The Times. 
(Tomorrow: The anatomy of text gambling)
|
