Republic of the Philippines

COMMISSION ON AUDIT
Philippine Amusement and Gaming Corporation
PAGCOR House Annex, Carmen Building
1105 United Nations Ave. cor. Ma. Orosa Street
Ermita, Manila Philippines 1000

PHILIPPINE AMUSEMENT AND GAMING CORPORATION

Calendar Year (CY) 2021 Compliance Audit
For the period January 1 to December 31, 2021

Date : (Yet to be set and agreed)

Time : (Yet to be set and agreed)
Venue : (Yet to be determined and agreed)

A. The Audit Team

Office of the Supervising Auditor

1. Mr. Renato O. Rosales Supervising Auditor

Team 2 – Disbursement, Property and Interbranch

2. Ms. May Anne R. Sarmiento OIC, Audit Team Leader
3. Mr. Ferick F. Bangayan Audit Team Member
4. Ms. Angeli P. Teñoso Audit Team Member

B. Objective and Scope of Compliance Audit

The audit shall cover the review of PAGCOR’s compliance on the licensing
requirements, particularly in the processing and approval of E-Sabong Operator
Registration Form – Application for License (ES Form No. 1) of Electronic Sabong (E-
Sabong) Operators, including proper documentation thereof, are in pursuant to Section
II of the Regulatory Framework for E-Sabong for CY 2021.

C. Approach and Methodology

To achieve the objective of the audit, the Audit Team shall obtain, review and
analyse/validate documents submitted by the seven (7) licensed E-Sabong Operators
to the E-Sabong Licensing Department (ESLD), including conduct of interview of
concerned officers and employees of PAGCOR.

D. Output

1. Audit Query Memoranda to communicate questions related to the audit thrust;

2. Audit Observation Memoranda to communicate results of audit;
3. Action Plan Monitoring Tool;
4. Compliance Audit (CA) Management Letter; and
5. Reports required by COA Offices
E. Offices/Personnel Involved and Linkages

1. PAGCOR Corporate Offices

2. E-Sabong Licensing Department
3. Other concerned Offices

F. Significant Schedules

Activities Dates

Entrance Conference February 2, 2022 (tentative)

Audit Execution February 3 – 15, 2022
Last day of issuance of Audit February 15, 2022
Observation Memorandum
Exit Conference February 15, 2022
Transmittal of the CA Management March 15, 2022
Letter

G. Documents needed for the audit

In view of the foregoing, we request submission of authenticated copies of the following

documents:

1. Process Flow of processing and approval of Application for License of Electronic

Sabong (E-Sabong) Operators
2. Checklist of Documentary Requirements
3. Letters of Intent (LOI) addressed to the Chairman and CEO of PAGCOR of the
following applicants:

Company/Applicant Brand

a. Belvedere Vista Corporation Sabong Express

b. Lucky 8 Star Quest, Inc. Pitmasters Live
c. Visayas Cockers Club, Inc. Sabong International Ph
d. Jade Entertainment and Gaming Jade Sabong
Technologies, Inc.
e. Newin Cockers Alliance Gaming NCA
Corporation
f. Philippine Cockfighting Platinum Cockers Club
International, Inc.
g. Golden Buzzer, Inc. BAGWISAN

4. Securities and Exchange Commission (SEC) registration as an E-Sabong Operator

of the above-named seven (7) Companies/Applicants
5. PAGCOR’s result of standard probity check (for gaming operator suitability and
compliance with all documentary and system requirements) of the above-named
seven (7) Companies/Applicants
6. E-Sabong Licensing Department results of processing of all the above-named
seven (7) Companies/Applicants for licensing as an E-Sabong Operator
7. Duly filled-out E-Sabong Operator Registration Form – Application for License (ES
Form No. 1) of the above-named seven (7) Companies/Applicants together with
the following requirements:
A. Company-related requirements

i. Company profile;
ii. Detailed location sketch of company office;
iii. Copy of Registration Certification from SEC with required
capitalization of PhP50,000,000.00, authorized capital stocks and
PhP12,500,000.00 paid-up capital;
iv. Articles of Incorporation, By-laws duly approved by the SEC;
v. Latest General Information Sheet (GIS) duly filed with SEC;
vi. Mayor’s Permit/Business Permit/Municipal License for the relevant
gaming activities from the location of the company office
vii. BIR Registration Certificate

B. E-Sabong system and business-related requirements

i. E-Sabong Platform Documentations, i.e. website and/or desktop or

mobile application documents indicating among others, the main
functions, web design and contents, accounting documents and
other salient details
ii. Certification from an independent gaming laboratory certifying that
the betting system of the Applicant’s E-Sabong platform was
extensively tested and has been found compliant with the following
standards:
a. All data are captured, accounted and reported by the
system; and
b. Game is fair, secure and able to be audited and operated
correctly.
Note: The above certification is required to be submitted three (3)
months after the commencement of live commercial operations.
iii. Detailed location sketch of the base of operations
iv. List of contracted local government unit (LGU)-licensed cockpit
arena/s
v. Mayor’s Permit/Business Permit/Municipal License of the cockpit
arenas/venues where the E-Sabong feeds will be coming from
vi. Letter of No Operation (LONO), in any form, interposing no
objection to the conduct of sabong operations in such cockpit
arenas/venues and the taking and broadcasting of feeds therefrom
vii. Certification from an independent gaming laboratory attesting to
Internet Protocol (IP) blocking of all other IP addresses excluding
Philippine IP addresses designated by the applicant.
Note: The above certification is required to be submitted three (3) months
after the commencement of live commercial operations.

C. Proof of payment of the non-refundable Application Fee based on the

license validity applied for, by the above-named seven (7)
Companies/Applicants supported with the proper Payment Processing
Request Form (ES Form No. 2), as follows:

License Validity Application Fee

3 years Php2,500,000.00
10 years Php8.300,000.00
 8. Minutes of the Board Approval for the above-named seven (7)
Companies/Applicants
9. PAGCOR Site Inspection Report on the above-named seven (7)
Companies/Applicants
10. Performance Cash Bond posted by the above-named seven (7)
Companies/Applicants supported with the proper Payment Processing Request
Forms (ES Form No. 2)
11. ESLD issued Notice to Commence E-Sabong Operations on the above-named
seven (7) Companies/Applicants
12. License Certificate of the above-named seven (7) Companies/E-Sabong Operators

The above requirements or documents shall be provided by the ESLD and other
concerned Unit/Division upon the start of the Audit Fieldwork.

H. Administrative Matters

To facilitate the conduct of this audit, the Audit Team respectfully requests
Management’s cooperation and assistance, among others on the following:

1. Assignment of focal person/s to facilitate meetings and requests relative to the

audit;
2. Preparing and submit/provide the requested documents listed in Item G upon the
start of the Audit Fieldwork;
3. Conferring with your officials and concerned staff to facilitate understanding of the
agency operation;
4. Facilitation of the requirements of the Audit Team assigned to conduct field
inspection and validation;
5. Response to audit queries, questionnaires and other observation memoranda on
or before the date specified therein.

Prepared by: Approved by:

MAY ANNE R. SARMIENTO RENATO O. ROSALES

OIC, Audit Team Leader Supervising Auditor