CEZA reiterates its denial that it authorised Jack Lam online gambling operations
News on 10 Mar 2017
News on 10 Mar 2017
The online gambling feuding in the Philippines continued this week as the Senate wound up its extensive enquiry into the online gambling affairs of Macau mogul Jack Lam, and the Philippine Amusement and Gaming Corporation (Pagcor) alleged that “the government has been losing at least P6 billion annually from unregulated online gaming franchises granted by CEZA such as the shuttered operations of fugitive Jack Lam.”
Our readers will recall that a massive raid on Lam operations in the Clark Freeport last year resulted in the arrests of 1,300 Chinese nationals and triggered a bribery and corruption scandal that saw accusations thrown around like confetti on senior government officials, Lam himself, the Secretary for Justice and a former police officer who presented himself as a facilitator.
CEZA (the Cagayan Economic Zone Authority) has previously denied any licensing involvement, and on Friday was stung sufficiently by the Pagcor accusation to reiterate its position in a statement advising:
“CEZA is not authorized to issue licenses and/or accreditations to companies that intend to operate within the Clark Freeport. CEZA is the operator of Cagayan Special Economic Zone and Freeport and is independent of PAGCOR, and can operate on its own, either directly or through a subsidiary entity, or license to others, tourism-related activities, including games, amusements, recreational and sports facilities within the Cagayan freeport.”
The statement reveals that CEZA charges hosting fees of 2 percent of GGR from client companies, and that the Pagcor allegation of P6 million in revenue was exaggerated to the extent that it would not be viable even over a 10-year period.
“The supposed P6 billion annual revenue is exaggerated. If we are to check our facts, a research made by H2 Gambling Capital revealed that the whole Asian and Middle East market for online gaming in 2015 was just P136 billion,” CEZA said.
“The market share of CEZA in the industry was just 55 percent, which amounts to P74.8 billion. From this amout, CEZA charges a hosting fee of 2 percent, which based on this figure, would amount to P1.496 billion,” it added, going on to contest the testimony the previous day of Pagcor chairperson Andrea Domingo when she appeared before the Senate and claimed that the federal government “should have collected roughly P60 billion in revenues from 84 licensees of CEZA in the last 10 years.”
The CEZA statement explains that, unlike Pagcor’s land-based casino and e-gaming operations, no actual bets or gaming transactions enter the Philippines under CEZA’s local gaming support service locators.
CEZA has consistently paid its taxes and dividends, the statement asserted, disclosing that half of its P4 billion earnings from 2005 to 2016 was remitted to the federal government.
“In the last five years, CEZA has become a consistent top taxpayer in Region II and a consistent dividends remitter. A big percentage of the multi-billion-peso revenue that CEZA has remitted to the national coffers came from the 2-percent hosting fee that CEZA has collected from the online-gaming industry,” the CEZA statement claimed.
“These government entities, including CEZA, are meant to work together, not to compete against each other, to generate billions of revenues from the online gaming industry,” it concluded.
