PCSO, lotto company sign interim agreement

Lotto equipment provider Philippine Gaming  Management Corp. (PGMC) has struck an interim agreement with the state-controlled Philippine Charity Sweepstakes Office (PCSO) to roll out at least 700 additional terminals in Luzon.

This is while the parties agreed to pursue arbitration over a debate on what PGMC claims to be its exclusive right to cover Luzon.

In a disclosure to the Philippine Stock Exchange, PGMC—the local gaming unit of Malaysian conglomerate Berjaya—said the interim settlement agreement was executed pending the resolution of the issue on exclusivity rights through arbitration proceedings.

Under the terms of the agreement, PGMC and PCSO agreed to resort to arbitration to settle issues regarding exclusivity in Luzon.

“Pending the resolution of the arbitration, PCSO agreed to cause PGMC to install at least 700 additional terminals in Luzon,” the disclosure said.

Last year, PGMC’s rival service provider Pacific Online Systems Corp. was allowed to set up terminals in Luzon for a lower lease rate.

PCSO, for its part, cited the need to lower lease rates from lotto equipment service contractors to boost available charity funds to ensure a fair deal for the government. From the point of view of the PCSO, the additional reduction in the lease rate will mean more savings and more funds for addressing the medical requirements of the country’s marginalized sectors.

PGMC said it had based its lawsuit on two grounds: (1) alleged violation of its exclusivity agreement between PCSO and PGMC over the Luzon area, and (2) prohibition against entering into government contracts without a prior public bidding.

PCSO was effectively claiming that what was awarded to Pacific Online was not a new contract and that there was no exclusivity in territory under the old contract with PGMC.