Jaworski vs Pagcor

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

Jaworski v. Pagcor
G.R. No. 144463, January 14, 2004

Facts:

On March 31, 1998, PAGCOR’s board of directors approved an instrument denominated as “Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming”, which granted SAGE the authority to operate and maintain Sports Betting station in PAGCOR’s casino locations, and Internet Gaming facilities to service local and international bettors, provided that to the satisfaction of PAGCOR, appropriate safeguards and procedures are established to ensure the integrity and fairness of the games.

On September 1, 1998, PAGCOR, represented by its Chairperson, Alicia Ll. Reyes, and SAGE, represented by its Chairman of the Board, Henry Sy, Jr., and its President, Antonio D. Lacdao, executed the above-named document.

Pursuant to the authority granted by PAGCOR, SAGE commenced its operations by conducting gambling on the Internet on a trial-run basis, making pre-paid cards and redemption of winnings available at various Bingo Bonanza outlets.

Petitioner Jaworski, in his capacity as member of the Senate and Chairman of the Senate Committee on Games, Amusement and Sports, files the instant petition, praying that the grant of authority by PAGCOR in favor of SAGE be nullified. He maintains that PAGCOR committed grave abuse of discretion amounting to lack or excess of jurisdiction when it authorized SAGE to operate gambling on the internet. He contends that PAGCOR is not authorized under its legislative franchise, P.D. 1869, to operate gambling on the internet for the simple reason that the said decree could not have possibly contemplated internet gambling since at the time of its enactment on July 11, 1983 the internet was yet inexistent and gambling activities were confined exclusively to real-space. Further, he argues that the internet, being an international network of computers, necessarily transcends the territorial jurisdiction of the Philippines, and the grant to SAGE of authority to operate internet gambling contravenes the limitation in PAGCOR’s franchise, under Section 14 of P.D. No. 1869.

Moreover, according to petitioner, internet gambling does not fall under any of the categories of the authorized gambling activities enumerated under Section 10 of P.D. No. 1869 which grants PAGCOR the “right, privilege and authority to operate and maintain gambling casinos, clubs, and other recreation or amusement places, sports gaming pools, within the territorial jurisdiction of the Republic of the Philippines.” He contends that internet gambling could not have been included within the commonly accepted definition of “gambling casinos”, “clubs” or “other recreation or amusement places” as these terms refer to a physical structure in real-space where people who intend to bet or gamble go and play games of chance authorized by law.

Issues:

(a) Whether respondent Pagcor is authorized under PD No. 1869 to operate gambling activities on the internet?

(b) Whether Pagcor acted without or in excess of its jurisdiction, or grave abuse of discretion amounting to lack or excess of jurisdiction, when it authorized respondent Sage to operate internet gambling on the basis of its right “to operate and maintain gambling casinos, clubs, and other amusement places” under Section 10 of PD 1869?

(c) Whether Pagcor acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction when it granted authority to Sage to operate gambling activities in the internet?

Held:

In their separate Comments, respondents PAGCOR and SAGE insist that petitioner has no legal standing to file the instant petition as a concerned citizen or as a member of the Philippine Senate on the ground that he is not a real party-in-interest entitled to the avails of the suit. In this light, they argue that petitioner does not have the requisite personal and substantial interest to impugn the validity of PAGCOR’s grant of authority to SAGE.

Ordinarily, before a member of Congress may properly challenge the validity of an official act of any department of the government there must be an unmistakable showing that the challenged official act affects or impairs his rights and prerogatives as legislator. However in a number of cases, we clarified that where a case involves an issue of utmost importance, or one of overreaching significance to society, the Court, in its discretion, can brush aside procedural technicalities and take cognizance of the petition. Considering that the instant petition involves legal questions that may have serious implications on public interests, we rule that petitioner has the requisite legal standing to file this petition.

Respondents likewise urge the dismissal of the petition for certiorari and prohibition because under Section 1, Rule 65 of the 1997 Rules of Civil Procedure, these remedies should be directed to any tribunal, board, officer or person whether exercising judicial, quasi-judicial, or ministerial functions. They maintain that in exercising its legally-mandated franchise to grant authority to certain entities to operate a gambling or gaming activity, PAGCOR is not performing a judicial or quasi-judicial act. Neither should the act of granting licenses or authority to operate be construed as a purely ministerial act. According to them, in the event that this Court takes cognizance of the instant petition, the same should be dismissed for failure of petitioner to observe the hierarchy of courts.

In the case at bar, PAGCOR executed an agreement with SAGE whereby the former grants the latter the authority to operate and maintain sports betting stations and Internet gaming operations. The petition is GRANTED. The “Grant of Authority and Agreement to Operate Sports Betting and Internet Gaming” executed by PAGCOR in favor of SAGE is declared NULL and VOID.