Philweb allegation of regulatory bias ‘absurd,’ says Pagcor

MANILA, Philippines–The Philippine Amusement and Gaming Corp. has denied accusations of bias leveled by Philweb Corp., which recently asked the courts to stop the country’s gambling regulator from requiring it to hire the services of a third party operations auditor — a policy allegedly not required of the firm’s only competitor.

In a press statement, Pagcor said the allegations of Philweb — owned by businessman Gregorio Araneta III — that the bidding for the Electronic Gaming Management System (EGMS) is skewed in favor of Inter-Active Entertainment Solutions Technologies Incorporated (IEST) are “absurd and nothing more than a mere figment of Mr. Araneta’s imagination.”

IEST and Philweb Corp. are the two companies accredited by the gaming regulator to provide systems for online gaming, e-games and sports betting operations in the country.

The EGMS is the independent electronic audit platform being procured by Pagcor to monitor in real time the operations of its online gaming licensees. This is in compliance with the conditions set by President Rodrigo Duterte for reopening of online gaming operations to ensure that proper taxes are collected from gaming firms.

“However, because IEST has an existing and valid contract, the licensees operating in relation to Pagcor’s Intellectual Property Licensing and Management Agreement (IPLMA) with IEST cannot immediately be covered by the EGMS, instead they are monitored under the existing procedures,” the regulator said. “At any rate, once the IPLMA of IEST expires, these licensees will be covered by the EGMS as well.”

“In the meantime, we must ‘grandfather’ these operations under the IPLMA,” Pagcor explained. “[We] cannot unilaterally change a live contract, we learned that from our previous court cases with our licensees Fontana, Thunderbird and Eastbay.”

“In the case of Philweb, their IPLMA expired in July 2016 and was no longer renewed since it was no longer legally justifiable to do so,” Pagcor added.

Last week, Philweb filed with the courts a petition for injunction against Pagcor’s new EGMS rule Corp. — a policy which the publicly listed firm says discriminates against it since it will not be imposed on other competitors.

Philweb said the gaming regulator’s proposal to bid out the services for the EGMS violates the firm’s rights under the Constitution’s due process and equal protection clause.

“It is anticompetitive and heavily favors IEST at the expense of its competitors like the plaintiff,” Philweb said.

Both IEST and Philweb are accredited to provide technology services to electronic gaming franchise holders, most of whom operate e-games or e-bingo outlets. Philweb said, however, that Pagcor has imposed onerous requirements on it that is not required from IEST, as well.

This lack of a level playing field between both service providers in the eyes of Pagcor exists even though “there is no substantial difference” between Philweb, which does not have an intellectual property licensing and management agreement (IPLMA) and and IPLMA holder like IEST in terms of services provided to the public, the company said. /jpv