MANILA, Philippines ? The IT gaming firm PhilWeb Corp. has defended its plan to operate an SMS-based lotto betting system as a project that would allow more people to participate in lotteries and would result in higher revenues for the Philippine Charity Sweepstakes Office (PCSO).

More importantly, however, the scheme is above board and does not infringe on any existing agreements that PCSO has with its present lotto equipment providers, according to company president Dennis Valdes in his e-mail to the Philippine Daily Inquirer.

Valdes made the statement on Friday in reaction to last Wednesday's Biz Buzz column, which said that some of PCSO's partners like Prime Gaming Management Corp. and Pacific Online have opposed the nascent agreement between the state-run lotto operator and the company led by businessman Roberto "Bobby" Ongpin.

"Neither PGMC, which has the PCSO lotto betting machine franchise for Luzon, nor Pacific Online, which has the PCSO franchise for Visayas and Mindanao, are IT firms," Valdes said. "They have no online betting business and are certainly not IT firms. The existing contractual relationship with PCSO by both PGMC and Pacific Online is purely for the supply of lotto betting machines which PCSO leases from them."

He said neither firm had basis for claiming that "their existing contracts entitle them to require PCSO to give them exclusivity or even priority for any other system of accepting lotto bets, other than for the supply of betting machines."

Under the PhilWeb-led project, lotto bettors would be able to place numbered bets through any mobile phone that has been using the networks of either Smart Communications Inc., Globe Telecom Inc. or Sun Cellular.

"There are only a little over 4,000 lotto outlets in existence throughout the Philippines where betting machines are provided by PGMC and Pacific Online," Valdes said. "I am sure that many have seen the long lines at the lotto betting outlets on draw dates especially when the jackpot prize is substantial. It is for this reason that PhilWeb, being the largest IT gaming firm in the Philippines [with our extensive text betting experience through BIR?s Premyo sa Resibo, which has been operating since 2006] and PCSO are in discussion for a totally new technology for PCSO to increase its lotto revenue and thus its ability to increase dramatically its charitable donations," Philweb said.

Valdes added that it was "understandable" for PGMC and Pacific Online to oppose PhilWeb?s text lotto project.

"But regrettably, neither one of them possesses the legal basis nor the technology and the experience in organizing and launching text lotto for PCSO," he said. "In fact, we understand that for several years now, PCSO has been pushing both companies to get into text lotto but so far no progress has been made," Valdez added.