The Supreme Court (SC) has dismissed three petitions that challenged the constitutionality of the 2016 rules and regulations (RR) adopted by the Philippine Amusement and Gaming Corporation (PAGCOR) for the Philippine Offshore Gaming Operators (POGOs).

In a unanimous full court decision made public on March 4, 2024, the SC ruled that the three petitions against POGOs’ RR failed to observe the hierarchy of courts and present the importance of the transcendental issues cited in the petitions.

Also, the SC – in the unanimous full court decision written by Associate Justice Jhosep Y. Lopez – ruled that the petitioners have no legal standing to file the petitions since they failed to show any direct and personal interests in the implementation of the rules and regulations.

The petitions were filed by lawyer Jovencio H. Evangelista, Union for National Development and Good Governance Philippines (Unilad) represented by Miguel Daniel C. Cruz, and Anti-Trapo Movement of the Philippines, Inc.

Among other rules, POGOs provide and participate in offshore gaming services, or that which provide the games to players, take bets, and pay the players’ winnings.

POGOs must obtain a license from and must be duly authorized by PAGCOR to provide offshore gaming services.

The rules also provide that an Offshore Gaming License may be issued to: (1) a Philippine-based operator, or one which is a duly constituted business enterprise organized in the Philippines; or (2) an Offshore-based operator, a duly constituted business enterprise organized in any foreign country but who will engage the services of a PAGCOR-accredited service or support provider for its online gaming activity.

In his petition, Evangelista told the SC that the rules and regulations are unconstitutional since PAGCOR has no authority to operate and regulate online gambling under its charter.

He claimed that the law passed in 1983 could not have envisioned online gaming and/or gambling since the internet was not yet existing at the time.

He also said the amendatory law on PAGCOR under Republic Act No. 9487 enacted in 2007 when the internet was already widely used, still did not mention online gambling as within the authority and jurisdiction of PAGCOR.

For his part, Cruz said that PAGCOR is not authorized under its legislative franchise to operate and regulate gambling on the internet catering to foreign-based players and gamblers that are physically outside the Philippines.

The Anti-Trapo Movement, on the other hand, alleged that PAGCOR is not allowed under its charter to relinquish or share its franchise, much less grant a veritable franchise to another entity.

In seeking the dismissal of the petitions, PAGCOR – through the Office of the Solicitor General – argued that it has the authority to issue the rules and regulations on POGOs.

It pointed out that under Presidential Decree No. 1869 as amended by RA 9487, it has the authority to operate all games of chance within the territorial jurisdiction of the Philippines, except only: (1) jai alai; (2) those authorized, licensed, and regulated by, in, and under existing franchises, or other regulatory bodies; (3) those authorized, licensed, regulated by, in, and under special laws, such as R.A. No. 7922; and (4) those authorized, licensed, and regulated by local government units.

Thus, it stressed that games of chance are centralized and integrated for its regulation, including those already existing at the time of the creation of its charter, and those that may thereafter be invented, such as online gambling.

In dismissing the petitions, the SC ruled:

“Here, the RR-POGO was issued in the exercise of PAGCOR's quasi-legislative powers. Particularly, the RR-POGO outlines the procedure for the licensing, accreditation, and registration of offshore gaming operators, offshore gaming agents, and other auxiliary service providers.

“This is pursuant to PAGCOR's power under Section 8 of P.D. No. 1869 to promulgate rules and regulations relevant to the registration of persons engaged in gambling.

“This Court, the Court of Appeals, and the Regional Trial Court have concurrent original jurisdiction over petitions for certiorari and prohibition. The doctrine of hierarchy of courts mandates that ‘recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with a higher court.’

“The doctrine is meant to guarantee this Court's status as the court of last resort so that it can ‘satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition.’

“Stated otherwise, giving due course to all petitions where original jurisdiction over the matter is shared with lower courts will unnecessarily clog this Court's docket and exhaust resources that may be better utilized to resolve more pressing concems.

“Unfortunately, petitioners failed to show exceptionally compelling reasons to justify direct resort to this Court. Petitioners were not able to clearly explain why preventing PAGCOR from regulating and requiring the registration of offshore gaming operations is of transcendental importance, warranting the immediate attention of this Court and a deviation from the doctrine of hierarchy of courts.

“Questions on the validity and constitutionality of the RR-POGO, to be sure, may have well been passed upon by the Court of Appeals, which similarly has jurisdiction over the subject matter and whose writs are likewise nationwide in scope.

“All told, in view of petitioners' failure to observe the doctrine of hierarchy of courts and sufficiently establish the elements of judicial review, this Court shall refrain from discussing the constitutionality and legality of the RR-POGO.

“With regard to their prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, petitioners failed to show that there was an invasion of a clear material and substantial right, or an urgent and paramount necessity to prevent serious damage. Consequently, their prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction is denied.

“Accordingly, the Consolidated Petitions in G.R. Nos. 228234, 228315 and 230080 are dismissed. Petitioners' prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction is denied. So ordered.”