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PCSO gaming shutdown an exercise of police power – Guevarra

MANILA, Philippines – Justice Secretary Menardo Guevarra on Sunday, July 28, invoked police power as legal basis for President Rodrigo Duterte to suspend all gaming operations of the Philippine Charity Sweepstakes Office (PCSO).

"The President may order the suspension of operations based on preliminary information available to him, much like a judicial restraining order, but even more powerful, because it emanates from a constitutional duty to faithfully execute our laws, if not from the inherent police power of the state," Guevarra said on Sunday.

The justice chief said he has ordered the National Bureau of Investigation (NBI) to look into the alleged corruption in PCSO gaming operations, adding that all operations cannot resume until the probe is done.

"I believe that until this investigation is completed and people responsible for cheating the government have been unmasked, PCSO gaming operations such as lotto and small town lottery (STL), which are otherwise legal, may not resume," said Guevarra.

What do the laws say? Police power, while not specifically found in the Constitution, is the "state authority to enact legislation that may interfere with personal liberty or property in order to promote general welfare," according to a Supreme Court (SC) decision.

There is no formal issuance yet on the suspension of gaming operations as Duterte only announced it via a televised message on Friday night, July 26.

The police were quick to work, locking down lotto outlets by Saturday, July 27. Duterte said that starting Saturday, "all transactions and gaming, wager of bets, become illegal."

The SC said in Social Justice Society vs Atienza Jr that "police power is the plenary power vested in the legislature" to create policies "for the good and welfare of the people."

When Duterte closed down the island of Boracay – a move also not supported by an official issuance at its onset – the National Union of Peoples' Lawyers said police power may not be invoked because it is a legislative power and not an executive power.

But in February 2019, the SC voted 11-2 to uphold police power in the Boracay shutdown, saying "it is said to be the inherent and plenary power of the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of the society."

What about due process? Guevarra said Duterte can suspend, "even terminate," gaming licenses because they are not "contractual rights but a mere privilege that may be revoked at any time by the state."

Can privileges be suspended without due process? Guevarra said the NBI probe is the due process.

"The investigation that I have ordered is precisely an opportunity where the PCSO and its licensees may come forward and show that there's no such corruption or fraud involved in their operations," he said.

The PCSO was created through Republic Act No. 1169, which empowers it "to hold and conduct charity sweepstakes races, lotteries, and other similar activities."

By suspending all gaming operations, and not just those with preliminary information of corruption, is Duterte essentially suspending the entire law that created the PCSO?

"No, it's not the same as suspending the entire PCSO charter. The PCSO has other sources of revenue apart from its gaming operations and it will continue to perform its mandate, albeit with limited resources," said Guevarra.

The PCSO has said it will appeal that Duterte reconsider his shutdown order.

PCSO proceeds from gaming operations not only serve as financial aid to qualified Filipinos, but also fund other national projects such as those related to sports, education, health, housing, overseas Filipino workers, anti-drug operations, indigenous peoples' welfare, crops, and others. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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