8.

del Mar vs PAGCOR

Facts:

This involved a consolidated petition, namely, G.R. No. 138298 and G.R. No. 138982 against PAGCOR’s right to
manage and operate jai-alai.

The Secretary of Justice opined that "the authority of PAGCOR to operate and maintain games of chance or
gambling extends to jai-alai which is a form of sport or game played for bets and that the Charter of PAGCOR
amounts to a legislative franchise for the purpose." After receiving favors, PAGCOR started its operation.

The petitioners in this case filed for petitions to prevent PAGCOR from managing and/or operating jai-alai on the
ground that it is illegal and devoid of any basis either Constitution or PAGCOR’s own Charter.

PAGCOR, in its response, alleged that the operation of jai-alai is well within PAGCOR’s authority to operate and
maintain. PAGCOR’s franchise is intended to be wide in its coverage, the underlying considerations being, that:
(1) the franchise must be used to integrate all gambling operations in one corporate entity (i.e. PAGCOR); and
(2) it must be used to generate funds for the government to support its social impact projects;

Issue: Whether or not PAGCOR has the right to manage and operate jai-alai

Ruling:

No, PAGCOR did not have the right to manage or operate jai-alai.

Section 10 of 1869 provides:

"SEC. 10 Nature and term of franchise. – Subject to the terms and conditions established in this
Decree, the Corporation is hereby granted for a period of twenty-five (25) years, renewable for another
twenty-five (25) years, the rights, privilege and authority to operate and maintain gambling casinos,
clubs, and other recreation or amusement places, sports, gaming pools, i.e., basketball, football,
lotteries, etc., whether on land or sea, within the territorial jurisdiction of the Republic of the Philippines."

P.D. No. 1869 is a mere consolidation of previous decrees dealing with PAGCOR. PAGCOR cannot seek
comfort in section 10 as it is not a new provision in P.D. No. 1869 and, from the beginning of its history, was
never meant to confer it with a franchise to operate jai-alai. It is a reiteration of section 1 of P.D. No. 1067-B
which provides:

"SECTION 1. Nature and Term of Franchise. – Subject to the terms and conditions established in this
Decree, the Philippine Amusements and Gaming Corporation is hereby granted for a period of twenty-
five (25) years, renewable for another 25 years, the right, privilege, and authority to operate and
maintain gambling casinos, clubs and other recreation or amusement places, sports gaming pools, i.e.,
basketball, football, etc., whether on land or sea, within the territorial jurisdiction of the Republic of the
Philippines."

Plainly, section 1 of P.D. No. 1067-B which was reenacted as section 10 of P.D. No. 1869 is not a grant of
legislative franchise to operate jai-alai. P.D. No. 1067-B is a franchise to maintain gambling casinos alone.

PAGCOR's stance becomes more sterile when we consider the law's intent. It cannot be the intent of
President Marcos to grant PAGCOR a franchise to operate jai-alai because a year and a half before it was
chartered, he issued P.D. No. 810 granting Philippine Jai-Alai and Amusement Corporation a 25-year franchise
to operate jai-alai in Manila. This corporation is controlled by his in-laws, the Romualdezes. To assure that this
Romualdez corporation would have no competition, President Marcos earlier revoked the power of local
governments to grant jai-alai franchises. Thus, PAGCOR’s stance that P.D. No. 1067-B is its franchise to
operate jai-alai, which would have competed with the Romualdezes’ franchise, extends credulity to the
limit. Indeed, P.D. No. 1067-A which created PAGCOR made it crystal clear that it was to implement "the policy
of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises
or permitted by law," which included the Philippine Jai-Alai and Amusement Corporation.

There can be no sliver of doubt that under P.D. No. 1869, PAGCOR’s franchise is only to operate gambling
casinos and not jai-alai. This conclusion is compelled by a plain reading of its various provisions, viz:
"SECTION 1. Declaration of Policy. - It is hereby declared to be the policy of the State to centralize and integrate
all games of chance not heretofore authorized by existing franchises or permitted by law in order to attain the
following objectives:

(b) To establish and operate clubs and casinos, for amusement and recreation, including sports, gaming
pools (basketball, football, lotteries, etc.) and such other forms of amusement and recreation including games of
chance, which may be allowed by law within the territorial jurisdiction of the Philippines and which will: x x x (3)
minimize, if not totally eradicate, the evils, malpractices and corruptions that are normally prevalent in
the conduct and operation of gambling clubs and casinos without direct government involvement.

Thus, PAGCOR did not have the right to manage or operate jai-alai.