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Biz Buzz: Gov’t’s gaming windfall

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Biz Buzz: Gov’t’s gaming windfall

/ 05:13 AM September 13, 2017

Time flies when you’re having fun.

That seems to be an accurate description of the Philippine gaming scene as the time is again approaching for the country’s online casino operators to renew their licenses with the state-owned Philippine Amusement and Gaming Corp.

According to our sources, the bulk of the 45 firms approved by Pagcor last year to conduct electronic games via the so-called Philippine Offshore Gaming Operators (Pogo) scheme will have to renew their licenses come October.

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Why so soon? Gaming regulators created this category to promote internet gaming (which its supporters say provides a massive cash windfall for the government as well as employs thousands of Filipinos in BPO-type jobs, as well as a number of foreigners, of course). Since Pagcor is still learning the ropes in this industry, it decided on an annual renewal of licenses so it could keep licensees on a short lease.

Biz Buzz learned that 37 original licensees will be renewing their permits next month at a cost of P200,000 per license.

That may look small and, indeed, we hear that one critic of this scheme—someone who was left out in the cold after the new rules were put in place—complained to the Palace that he could do a better job of bringing in more revenues to the government’s coffers if his alternative proposal were followed.

According to one industry source, this businessman told President Duterte that Pagcor’s current Pogo scheme brought in only something like P1.5 billion in revenues for the government each year and that his proposal, if adopted, would raise this amount to P3 billion.

The good thing was that the President verified this figure by calling up Pagcor chair Andrea Domingo to ask how much the Pogo business was really earning for the government. She replied: P5.5 billion in licensing fees and royalties. And that’s excluding the value-added elements to the domestic economy like the rent they pay for their offices and the wages they pay thousands of Filipino workers.

So it was “no contest” from the get go, and this businessman aspiring to have his was in the gaming local gaming scene went away with a long face. Will he come up with a new scheme? Well, he is resourceful and has survived the changing political winds for more than three decades now so… abangan. —DAXIM L. LUCAS

Moving on

Rogelio Singson, who heads the company that is running and expanding the Light Rail Transit Line 1, is cutting his teeth in another sector: Power.

Manuel V. Pangilinan-led Metro Pacific Investments Corp. is soon to announce Singson as the new head of Meralco PowerGen Corp. (MGen), multiple individuals told Biz Buzz.

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Singson is currently CEO of LRT-1 operator Light Rail Manila Corp., which—under Singson’s stewardship— had recently bagged a coveted pair of ISO 9001 and 14001 certifications. The certifications are proof that the train line is in better shape today than before the private sector took over.

Our sources said there was little surprise here, given the good track record that Singson left behind during his tenure as public works and highways secretary during the Aquino administration. —MIGUEL R. CAMUS

PCC seeks understanding

A cat lover does not get why the dog barks. Heck, they can’t even tell a threat from a warning just by the sound of it. Such was the case of the Philippine Competition Commission (PCC), a watchdog which entered the business scene barking at a time when some investors preferred something as timid as a cat.

Much has already been said about PCC lately in social circles, but some of these are misconceptions surrounding how the quasi-judicial body works. And so Biz Buzz had the chance to talk to the man who heads the competition enforcement office, the very part of PCC that investigates industries with suspected anticompetitive practices, studying their subjects behind tall grass like tigers waiting to pounce.

The tiger metaphor would make much more sense later, so bear with us.

This is different from PCC’s other function, which is to look at mergers and acquisitions, like the ongoing case with the telco giants. The enforcement office, aptly called CEO, is currently investigating three industries: energy, cement and another one which they would not disclose to the press.

These three industries are subjected to a full administrative investigation (FAI), which here means that the watchdog has been able to validate the complaints filed and that the allegations therein could be independently verified. Generally, PCC officials expect that the FAI would last up to two years.

“I think there is confusion in the discussion because there is a complaint, so the complaint is associated with a complaint filed in court. That’s not the case here,” Orlando Polinar, who heads the CEO, told Biz Buzz.

The confusion, he said, is that sometimes PCC is mistaken for an actual court that could work in one’s behalf. But PCC does not work like that. “You are a complainant in the sense that you are the one filing the complaint, but in the context of the proceedings, you are just the witness, you are just the source of information. That’s the main difference,” he said.

So, if you as a private party feel that your competitor has dented your business, PCC cannot reward you the damages. In Polinar’s own words, you should “go to court” instead.

Take for example the case of the cement industry. A former trade undersecretary filed the case against a cement industry group, which, coincidentally, is also headed by a former trade official. Without a copy of the actual complaint, news reports could not go to the dirtier details of the complaint, but noted that there were anticompetitive practices in the industry.

What this means, if taken in this context, is that the investigation can go both ways. It could lead to a case that may or may not involve the industry group, and it could even lead to allegations that may or may not have been indicated in the complaint.

In other words, the complainant only tells the watchdog where to start sniffing, but the trail does not necessarily start and end there. The complainant, no matter how well-connected, does not call the shots.

After two years, the enforcement office is expected to build a case, which the PCC commissioners, chaired by former Economic Planning Secretary Arsenio Balisacan, would adjudicate. If that seems a long time, Polinar said that it’s actually the “norm.”

A more advanced anticompetition body, such as European Union (EU) antitrust regulators, takes just as much time, or even more. For example, it took EU’s regulators seven years of investigation before it fined Alphabet’s Google with $2.7 billion for anticompetitive practices, the biggest fine EU imposed on a company so far.

Therefore, much patience is expected for our very own PCC, which, like we said, is a tiger that takes its time watching its prey. But when it pounces, it could leave one hell of a bite. —ROY STEPHEN C. CANIVEL

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