MANILA, Philippines – State Philippine Amusement and Gaming Corp. (Pagcor) has yet to charge $ 2.328 billion as a share in the revenues of Philippine offshore gaming operators (Pogos) more than a year since the amount fell, according to the Audit Commission (COA).
This is part of Pagcor’s $ 2.70 billion Pogos revenue that remains unpaid by the end of 2021, revenue that the COA said the gaming regulator could have used to fund its mandate to contribute to nation building .
Of that amount, $ 2.328 billion, or 78 percent, had been outstanding for more than a year, part of 2017.
“Of the 2,328 million euros of accounts receivable outstanding for more than 360 days, 815,902 million euros are under protest. Despite the accounts receivable subject to protest, the remaining 1,512 million euros remained uncollected for more than one to five years, ”the COA noted.
State auditors informed Pagcor of the results of the 2021 audit in a management letter dated June 13 to Pagcor President Andrea Domingo.
They noted that “the presence of significant accounts receivable from Pogos has been a persistent problem for several years.”
This was despite payment procedures for Pagcor’s offshore gaming regulatory manual, such as issuing a default notice to affected licensees, loss of performance guarantee, and suspension, termination, or cancellation. of its offshore gaming license.
The manual also gives Pogos up to the 15th of each month to settle its dues with Pagcor.
Pagcor explained that Pogos’ overdue accounts receivable were due to the agency’s “intense fight against illegal online gambling and its excessive zeal to maximize revenue for government coffers. “.
The state gaming regulator added that it had been dealing with undeclared games, websites and transactions that were suspected of being connected to POGO licenses.
In December 2017, it hired a third-party audit platform service provider to provide accurate and near real-time gross gaming revenue (GGR) from the POGOs, which were to be integrated into the platform.
In April and May 2018, the Pogos were billed with an estimated rate based on average revenue performance or the average GGR over the past 30 days, multiplied by the percentage of the regulatory rate, as there was no definitive amount of GGR from these suspicious websites.
“The affected POGOs, due to the substantial amount of regulatory fees, filed letters of protest on various dates from May 2018 to October 2019. Some of the affected Pogos paid in part while others did not. to pay the invoiced amount, therefore, they gave rise to the pending amount. balances ”, said the letter of Pagcor.
The COA advised Pagcor to “evaluate and validate the accounts receivable under protest and provide the necessary adjustments” to its books, and that the agency “review the effectiveness” of the provisions of its POGO manual to improve revenue collection. taxes.
He said Pagcor must also strictly comply with billing and collection of regulatory fees and consider imposing a protest fee on POGOs who file disputes.
The COA had noted that regulatory fees were not charged for seven POGOs that filed protests over their billed rates, and that the protests of four of these Pogos were still being processed even though they were filed beyond the permitted date. .
He also learned that the estimated fees billed to the POGOs in April and May 2018, based on data from the third-party audit platform service provider, “were found to be inaccurate after their own revalidation procedures.”
As a result, Pagcor “is true that it invoiced subject POGOs with inaccurate amounts and was recognized as revenue in 2018.”
Three years after 2018, the third-party audit platform service provider told Pagcor that “it could not establish a clear link between suspicious undeclared websites and POGOs.”
However, the service provider cannot be held liable for any incidental, special, punitive or consequential damages as stipulated in its consulting contract with Pagcor.
There were about 60 Pogos operating in the Philippines in early 2020, or before the COVID-19 pandemic. The number of accredited service providers for these Pogos reached 218 companies and employed about 150,000 people, about three-quarters of whom were foreigners, most of them Chinese.
In mid-May this year, the number of POGOs was reduced to 34 operators, after many left due to the pandemic and the problem of the franchise tax with the Office of Internal Finance.
—WITH REPORT OF BEN O. DE VERA
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