Illegal Gambling and PCSO: Suggested Reforms
Corruption stories in the Philippine government are never-ending. Although some stories can be explosive and invite national outrage such as the PDAF scam, it must be admitted that such events of corruption taking place are not really a surprise anymore. Just before the end of 2017, recently appointed Board Member Sandra Cam spilled the beans to the public that the Philippine Charity Sweepstakes Office (PCSO) spent around Php 10 million for its annual Christmas party and it was held at the posh Edsa Shangri-La Hotel. General Manager Alexander Balutan fired back, claiming that he exemplified thrift for cutting down the budget to Php 6 million. What an amazing version of austerity does Mr. Balutan hold, eh?
As of this time of writing, the Senate is investigating this matter for potential cases of corruption and graft.
This is not actually the only time that the PCSO was embroiled in scandals. Previously, various officials of the organization were slapped with plunder charges for the missing Php 366 million in intelligence funds. Former President Gloria Macapagal-Arroyo was also one of the accused but in July 2016, the Supreme Court overruled the Sandiganbayan and granted her petition of demurrer to evidence, thus resulting to the dismissal of her case. Several officials also walked free due to weak evidence against them. As of this time, nobody has been convicted for plundering the funds.
President Rodrigo Duterte has previously mulled over abolishing the PCSO. Calling it the “most corrupt” government agency, he has also accused its Small Town Lottery branches for being just a front of jueteng operations (Note that jueteng is an illegal numbers game in the Philippines.). If ever corruption there won’t be curbed, the President will move forward in abolishing it.
Mr. Duterte is right to propose abolishing PCSO and there are other good reasons in arguing for it.
Established in 1934, PCSO is basically a state-owned charity organization. Its prominent operation is the holding of lotteries (such as 6/42 and 6/45). Other activities are also used as other sources for fund raisers, such as sweepstakes and horse races. All payments given to the organizations are spent on “health programs, medical assistance and services, and charities of national character.”
However, PCSO is a redundant government bureaucracy which is ultimately a drain to taxpayers’ money. Since it’s just a charity organization, its activities are best left to the innovations of the private sector (both profit and non-profit). Governments, both local and national (through the General Appropriations Act), can raise revenues for their activities or be encouraged to cut down on wasteful programs if needed so (e.g. avoiding bloated-up project budgets brought by an irregular bidding process). Abolishing it, therefore, can save the government billions of pesos in the long run. Savings can be used to augment Duterte’s massive infrastructure ticket and on the (sadly) long-delayed upgrade on our national defenses, for example.
The idea of abolishing PCSO should also be timed in with other reforms on the gambling sector. Such reforms should be oriented in promoting economic freedom in the long run.
Regarding its lottery and other game services, they must be privatized in order to deliver better efficiency as they will be exposed to market competition. It’s actually a good time to do this in the light that the administration is set on privatizing the various casinos that the Philippine Amusement and Gaming Corporation (PAGCOR) owns. In the long run, Congress should reform PAGCOR so as it will just be limited to a regulatory board.
Philippine laws have banned various number games, for example as those listed in RA 9287 which increased the penalties given in PD 1602. In light with promoting economic freedom, Congress must revisit those laws again and it should legalize all illegal number games prescribed by law.
This will surely gain a lot of controversy. On one hand, those who will resist this will argue on moral grounds that gambling is morally inexcusable as it mentally destroys a person. RA 9287 said that gambling is an “ …influential factor in an individual’s disregard for the value of dignified work, perseverance and thrift since instant monetary gains from it are being equated to success…” However, it is not the government’s fault if ever a person tries to waste all of his money on gambling. People should be instilled of the mentality that they must be accountable for the mistakes that they make. In this regard, we don’t need Big Brother to lecture us on this.
Legalizing all illegal numbers game may also look like that we’re just giving a slap on the wrist the corruption involved in it. However, the root of corruption in it does not lie on the nature of those games e.g. treating them as “illegal” per se. Instead, it’s on the persistent government crackdowns that have institutionalized corruption there . Such crackdowns have enticed a culture of cronyism wherein businessmen involved (e.g. gambling lords) collude with government officials (ex. bribery) so that their gambling franchises won’t be shut down and they won’t get arrested. On another point, if we allow casinos to operate here, then why do we treat the likes of jueteng as illegal if at the end of the day, they are all just different forms of gambling? In all honesty, there is really no difference between the “legal” and “illegal” gambling games.
The government stands to benefit from these reforms in two ways. With abolishing PCSO, it can save billions of pesos in its budget and the savings can be spent on other matters. Legalizing all illegal gambling games presents an opportunity for it to get other sources of revenue (for example: requiring franchise owners to pay income tax). Other benefits also include more jobs in the economy and more attractive prospects for investments, both domestic and foreign.
Surely there will be considerable opposition to these reforms, ranging from skeptical citizens on moral grounds to entrenched interests of gambling lords. Nevertheless, the government should not lose sight of potential long-term benefits of these changes.
