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Phone-based lotto proposed to Pagcor

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Phone-based lotto proposed to Pagcor

‘Text bonanza’ seen raking in up to P100B a year
/ 12:36 AM August 25, 2016

Embattled gaming technology service provider Philweb Corp. has proposed to the state-owned Philippine Amusement and Gaming Corp. (Pagcor) a mobile phone-based lottery platform that is seen to generate between P50 billion and P100 billion in potential annual revenues.

The proposal is a revival of a similar project proposed years ago when PLDT Inc. owned a 27-stake in Philweb and was pitched as a way to somehow compensate for revenues to be foregone from the scrapping of a nationwide network of e-Games.

A revenue-sharing arrangement of 70 percent for Philweb and 30 percent for Smart was proposed to be maintained. Philweb also intends for Globe Telecom to join the platform if the mobile operator is amenable to the 70-30 revenue-sharing arrangement.

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The existing Lotto, which is operated by the Philippine Charity Sweepstakes Office through the sale of thermal paper-printed tickets in some 4,000 outlets nationwide, earns for PCSO about P30 billion a year, Philweb president Dennis Valdes said in a letter to Pagcor dated Aug. 24.

“The bettors are required to physically queue at each Lotto outlet in order to purchase their tickets, and during times when the lottery jackpot is large, these lines can extend up to a kilometer long and bettors have to queue for up to an hour under the sun, or          the rain, in other to buy their tickets,” Valdes added.

With more than 100 million cell phones and 1.5 billion texts a day, Valdes said it was not difficult to see the advantage of Pagcor Text Bonaza over PCSO’s lotto system.

With former Philweb chair Roberto V. Ongpin now out of the picture and Pagcor still studying the businessman’s latest offer to donate his shares in the technology company, Valdes said it had become incumbent upon him as the most senior officer of Philweb to “exhaust all efforts in trying to maintain the continued existence of Philweb.”

The proposed Pagcor Text Bonanza is based on a proprietary software developed by Philweb, in which a chosen lottery number is sent via text by a bettor to Philweb/Pagcor servers using the mobile phones. The bettor, in turn, receives a confirmatory message regarding the chosen number and saves the number in the cellphone, which becomes the lottery ticket.

Valdes added that it would not be necessary to discontinue or replace PCSO’s existing operation, noting that the text bonanza platform could “supplement government income many times over.”

“While this would solve Philweb’s problems and increase Pagcor’s income dramatically, it would not address the problems of the existing e-Games operators and their investment of P1.8  billion. However, the income potential of Pagcor Text Bonanza would permit the payment over time of these e-Games operators and the return of their investment via Pagcor Text Bonanza,” Valdes said.

On Aug. 10, Philweb’s license to service the nationwide network of e-Games expired and was not renewed. Ongpin was also singled out by President Duterte as an “oligarch” who must be destroyed.

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As to the legal framework, Valdes noted an existing Department of Justice opinion confirming that nothing prevented Pagcor from engaging in Pagcor Text Bonanza.

“In closing, I might point out that lotteries (sweepstakes) have been conducted in the Philippines since the 1930s and no one would consider it as gambling. Additionally, the more than 10 million Filipinos working overseas can actually participate in this lottery,” Valdes said.

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TAGS: Business, economy, News, Pagcor, Philippine Amusement and Gaming Corp., PhilWeb Corp., phone-based lotto
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