WINNINGS VS EARNINGS
But the 2006 COA report on Pagcor reveals that Pagcor has not remitted to these smaller government funds a cumulative total of P719.77 million.

Opposition Senator Francis Escudero has taken Pagcor to task for computing its franchise tax against "winnings" and not against gross earnings. Based on its P22-billion “winnings” in 2007, Pagcor paid only P1.1 billion in franchise tax.

Escudero said Pagcor should have paid P1.34 billion, or P243 million more, based on its gross earnings of P26.85 billion last year.

The BIR, for its part, has insisted that the reformed Value-Added Tax law should apply and that Pagcor, a corporation, must pay 35-percent corporate tax, in lieu of a franchise tax. Pagcor has filed a suit with the Supreme Court to contest the BIR's position.

Then there is Pagcor's refusal to pay dividends to the national government, equivalent to half of its net income after taxes. Pagcor has argued that it should be exempted from paying dividends, on account of its franchise tax burden, and that every month of its operations supposedly starts with zero net earnings, and therefore it has nothing to remit.

Both arguments have been debunked by COA, citing a Department of Justice (DOJ) opinion that its payment of franchise taxes does not exempt Pagcor from paying dividends.

COA has refuted Pagcor's claim of having nothing to remit as dividends. In 2005 and 2006, COA said, Pagcor earned a cumulative P1.87 billion, net of corporate income tax. COA has insisted that Pagcor must still pay half of this amount, or about P933 million as dividends due the national government for 2005-2006.

Pagcor has filed an appeal with the DOJ to reverse its opinion on Pagcor's dividends obligation. Even more, Pagcor chairman Efraim Genuino also sent a letter to Malacañang, seeking guidance from the President, on the issue of whether or not Pagcor must be covered by the law on the dividends burden of government-owned and -controlled corporations.

The inquiry, COA said, has been referred to the Department of Finance for comment and advice.

FAST, VAST EXPANSION
By contrast, there is no question over how Pagcor has been raking in more and more money under the Arroyo administration.

In the last seven years, state-sponsored gambling in the country has expanded at great speed across geographical regions, games, and onsite and online platforms.

Pagcor today operates a virtual gaming kingdom: 13 casinos in major Philippine cities, eight VIP (very important person) clubs, three slot-machine arcades, 180 bingo parlors, and a lucrative Internet casino platform using prepaid cards.

Working with technology provider Philweb Corp. (a subsidiary of the Philippine Long Distance & Telephone Co.), Pagcor earned P138.5 million in 2005 just from its Basketball Jackpot and e-Casino Filipino games online.

These days, Philweb is among the growing list of corporations placing their bets on the success of Tourism City and seeking Pagcor’s approval to participate in the project.

Another local group that has expressed interest is Waterfront Philippines Inc., which is owned by the family of William T. Gatchalian, a close friend and adviser on overseas workers' affairs of deposed President Joseph Estrada.

Pagcor insiders say there have also been several queries from overseas regarding how to be part of Tourism City, including those from a still unidentified but big U.S. gaming concern, and even “offers from Russians.”

For sure, Pagcor’s track record as a moneymaking machine has made its Tourism City venture look like a safe bet. Indeed, Pagcor has had a winning streak in business largely because it is a monopoly. From every peso of every bet made by gamers and gamblers — rich or poor, Filipino or foreigner, Pagcor takes a cut. That has not changed with its new charter, which has only enhanced its earning power some more and made the likes of Tourism City possible.