Date: March 2003

A Case of Modern Gambling

Is a game of chance, by definition, a form of gambling? Lack of new regulations governing modern technologies has put into question the legality of using short messaging service (SMS), popularly known in the country as text messaging in wireless games that have substantial prizes at stake.

The Philippine Amusement and Gaming Corp. (Pagcor), the state-run gambling agency, is convinced that text games promoted by broadcast stations and telecommunication firms are a form of gambling. Pagcor, therefore, wants these games regulated.

In fact, Pagcor has filed criminal charges against the officials of leading TV network ABS-CBN Broadcasting Corp. for illegal gambling. The network runs a daily game show that encourages viewers to send text messages for a chance at a jackpot. In its complaint, Pagcor tagged the game show as a game of chance.

In text games, a mobile phone subscriber participates by sending a text message to a four-digit number, specifically designated by a mobile phone service provider to have a chance for a jackpot worth millions of pesos. Each message sent costs from P2 to P10. At present, the government does not regulate these games. Television stations and telecommunication firms manage to continue profiting from the games on arguments that what they do is not a form of gambling. They claimed that no actual betting takes place. Rather it is a form of lottery.

However, religious groups are convinced that text games are no different from jueteng and other number games that are illegal in the country. The issue is very significant in the sense that gambling issues had a hand in determining the country's recent history. Former President Joseph Estrada's alleged connection to jueteng syndicates led to his ouster from Malacanang Palace in January 2001.

During a Senate hearing, Senator Robert Jaworski claimed that these text games have been draining the Filipinos of their hard-earned money. In 2002, the National Telecommunications Commission (NTC) disclosed that some 110 million text messages were sent to these text games daily, with each text message costing from P2 to P10. At the minimum, these text games generated at least P220 million daily.

As of January 2003, the NTC said there were 15.93 million mobile phone subscribers, well surpassing the 6.939 million landlines in the country. It is not known how many mobile phone subscribers are joining the text games. However, it is thought that most of the people playing such games are young. Without government regulation, the mobile phone subscribers may not realize that text games are a form of gambling. It is now a matter of legal dispute between Pagcor and the telecommunication companies. Illegal gambling is punishable by at least two years of imprisonment under Presidential Decree No. 1602.

Meanwhile, a consumer group based in Davao City has called on the government to protect Filipino consumers from companies engaged in promoting new technologies such as mobile phones, the Internet and credit cards.

As of December 2002, the banking industry has already issued some 3.5 million to four million credit cards in the country, with total credit card transactions amounting to over P50 billion on a quarterly basis.

Industry experts claimed that there were between 1.5 million and 4.5 million Filipino Internet users as of August 2002. US market research firm ACNielsen, however, said only 800,000 were surfing the web on a regular basis and 180,000 users had tried to shop online.

The Konsumo Dabaw group has said the Consumer Act of the Philippines (Republic Act No. 7349), which was passed in 1991, should be amended in order to govern these new technologies. The law does not have provisions protecting the rights of mobile phone subscribers, credit card owners and Internet users.

The consumer group asked that the Central Bank and the Department of Transportation and Communications be included in the list of government agencies implementing the Consumer Act. At present, only the Department of Trade and Industry (DTI), Department of Agriculture (DA), Department of Education (DepEd) and the Department of Health (DoH) are in the list.

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