"PCSO is the ONLY government agency mandated to assist individuals through medical assistance for hospitalizations, dialysis, cancer treatments, transplants, and the like."
For those relying on the financial help of the Philippine Charity Sweepstakes Office for their hospitalization and other medical needs, it’s simple—no Lotto and other games, no help.
The country was shocked when a video message from President Rodrigo Duterte aired on TV a few days ago. In it he alleged “massive corruption” related to PCSO’s franchisees and ordered the immediate suspension of all its games and an investigation into the said anomalies.
Given the huge role of the agency in many people’s lives, either through playing the Lotto regularly and hoping for a chance to be a millionaire, or through relying on it for medical assistance, netizens took to social media to discuss the matter.
I noticed that a great many misconceptions and downright fabrications about the agency were being shared, so here’s a short primer about it and what it does.
PCSO is the ONLY government agency mandated to assist individuals through medical assistance for hospitalizations, dialysis, cancer treatments, transplants, and the like. The agency also aids institutions such as hospitals and clinics through equipment donation, such as x-ray machines and ambulances.
To do so, it raises funds through numbers games. Before the 1990s, its only product was the Sweepstakes, where people bought numbered paper tickets. In 1995, the agency launched the online lottery game or computerized Lotto.
Later the agency added other games such as Keno, Peryahan ng Bayan, and the like. They experimented with different games to cater to a wide range of tastes, but the Lotto is still the most popular and the biggest money-earner.
A big competitor to PCSO in terms of number games is illegal jueteng, which makes billions but remits nothing to the government. In an effort to get a legal slice of this illegal pie, PCSO developed the Small-Town Lottery (STL) game in 2005, which is offered only in the provinces, is regulated and run professionally, and remits taxes to the government.
How are PCSO’s revenues distributed?
Under Batas Pambansa Blg. 42, the allocation of net receipts (gross receipts less cost of printing tickets) is clearly stated: 55 percent as prize fund for the payment of prizes, 30 percent as charity fund (where the money for medical assistance comes from), and 15 percent for the office’s operating expenses (PCSO does not obtain any funds from the national budget—in other words, it is not funded by taxpayers).
Prizes unclaimed within one year from the draw date, and “all balances of any funds” in the PCSO at year-end shall go into the Charity Fund.
Based on this, PCSO does not remit to the President’s Social Fund (PSF)—one common misconception particularly in the media is that it does. PAGCOR, the government agency that runs casino gaming, does remit to the PSF. Also, PAGCOR does not give PCSO any funds at all. It is a huge misconception of many that medical assistance will continue because “PAGCOR gives to PCSO”. That is erroneous.
What could the President mean by “massive corruption” related to PCSO? And ‘franchises’ not remitting their due share to government? Could the online Lotto be “corrupt”?
PCSO’s online lottery became an ISO-certified operation in 2016. All revenues are computer-tallied and put into a common pool. PCSO’s Keno is run similarly. Given this, it’s hard to imagine how the thousands of small kiosk owner/operators are the ones who are ‘corrupt.’
On the other hand, among those who obtained franchises for STL were gambling lords, because they have the machinery, influence, and personnel for it. Some of them transformed their operations into legitimate enterprises and were happy that STL gave them the chance to do so.
However, the corruption the President refers to could be related to those STL operators-slash-gambling lords who still run illegal operations on the side. This is something that PCSO cannot control because the lords have guns, goons, and gold, while PCSO has no police powers.
Duterte’s statement about franchises doing the government out of its share could refer to the taxes that the illegal operations are not remitting. A similar example is that of illegal horseracing bookies, who make an amount estimated to be the same as the revenues of legal horseracing, but are unregulated and do not contribute taxes.
Here’s a couple more points. A retired PCSO department head—a lawyer—told me that when the President mentioned something about ‘court orders’ being problematic, he could have been referring to the fact that “almost all closure orders of PCSO against erring STL operators are blocked by TROs [temporary restraining orders].”
He added that Duterte might also have been referring to contracts (perhaps of suppliers, and the like) disadvantageous to PCSO that are under TRO.
The President should investigate all anomalies, because any operation that defrauds the state of what is rightfully due it is a crime. But if PCSO has no revenues, it cannot sustain its Charity Fund.
We don’t know how long the suspension will last, and neither has PCSO said how much longer they can keep up their charity work without revenues.
Perhaps the President can reconsider about Lotto at least and lift the suspension on it, while the investigations continue on STL and other games? It would mean a lot to the thousands of needy and indigent patients who depend on PCSO. The agency has saved many lives—they should be allowed to continue to do so.
Dr. Ortuoste is not a regular Lotto player because she is too lazy to buy tickets. That is likely why she is still an impecunious writer whose idea of a big treat is to buy a new book. /FB and Twitter: @DrJennyO