Legal issues with Duterte’s PCSO gaming shutdown

Lian Buan

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Legal issues with Duterte’s PCSO gaming shutdown

(UPDATED) As in many of his previous impactful policies, the shutdown is not supported by a written order, which makes it hard to legally challenge its validity

MANILA, Philippines (UPDATED) – President Rodrigo Duterte announced in a televised message he was declaring all Philippine Charity Sweepstakes Office (PCSO) games illegal, and the police took it as a sweeping order that justified the closure of all lotto outlets the next day.

To date, there is no memorandum or any legal issuance that Malacañang has released to provide a legal basis for the shutdown. It’s just one of the many issues surrounding this policy that will affect the livelihood of owners and workers of over 30,000 gaming outlets, as well as the beneficiaries of PCSO’s charity operations.

1. Where is the written order?

The PCSO gaming shutdown is the 7th impactful policy of Duterte that was implemented even without a written order.

In closing down lotto outlets, police just showed a Facebook video of Duterte’s televised message.

Justice Secretary Menardo Guevarra defended the absence of a supporting document, saying that news coverage of his message “is enough record of a presidential order.”

“Something in documentary form like a written memorandum, or an order, can be done anytime, it’s just really ratifying what he has already given verbally,” Guevarra told reporters on Tuesday, July 30.

In an ordinary court proceeding, news reports are generally regarded as hearsay evidence.

Asked whether that constitutes an arbitrary and whimsical act, Guevarra said, “Hindi naman kasi may pinagbasehan naman siyang information when he made that order (not really because there was information that he based his order on).”

But Guevarra was unable to state some specifics even as he ordered the National Bureau of Investigation (NBI) to conduct an in-depth probe.

“It will focus on allegations that proper government share is not being remitted by Small Town Lottery or Peryahan ng Bayan and so forth…but that’s only one side of it, the other side will probably focus on what’s happening inside the PCSO, that will be an investigation of its own officials and employees,” said Guevarra.

2. Punishment before investigation?

Guevarra ordered the NBI probe only after all gaming operations had been shut down. The justice secretary said all operations, even those which are legal, may not resume until an investigation is done.

National Union of Peoples’ Lawyers (NUPL) president Edre Olalia said it violates Article III, Section 1 of the Constitution which says: “No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.”

Guevarra said the NBI will provide the operators, and PCSO officials, the due process.

Is that a case of punishment before investigation?

Hindi naman (not really), it’s just a suspension, in my opinion, the final action will be permanently closed and permanently terminated, and I think that is something that is yet to be made,” said Guevarra.

But most preventive measures come with a timeframe, such as preventive suspension of officials for as long as 120 days to avoid their interference in an ongoing investigation. The Supreme Court (SC) sometimes issues a Temporary Restraining Order (TRO) without a timeframe, but the shutdown is not a court order, but a presidential order.

“I’ll just make sure that the NBI puts priority to the investigation because we know that people are affected, not so much the operators, as the people who rely on the charitable resources of the PCSO,” said Guevarra.

3. Impairment of contracts?

Law professor and former SC spokesman Ted Te said the gaming shutdown may have violated the constitutional guarantees against impairment of contracts.

Article III, Section 10 states that: “No law impairing the obligation of contracts shall be passed.”

But Guevarra said that gaming franchises from the PCSO do not constitute contractual rights.

“It should be emphasized that a gaming license is not a contractual right but a mere privilege that may be revoked at any time by the State,” said Guevarra.

The lack of a written order also makes it hard to challenge the legal basis, as there is no point of reference for the supposed impairment.

4. Is it a valid exercise of police power?

“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.

While there are no explicit provisions in the Constitution about police power, previous Supreme Court decisions have referred to it as the “state authority to enact legislation that may interfere with personal liberty or property in order to promote general welfare.”

The Duterte administration invoked police power when it closed down Boracay – a policy that also didn’t have a written order at its onset.

But the Supreme Court voted 11-2 to uphold the administration’s police power in that case, which dissenters slammed as “the realization of the very evil against which the Constitution had been crafted to guard against – tyranny, in its most dangerous form.”

Police power usually refers to a legislation or a law, and a power that belongs to the legislative branch. In the Boracay decision, the Supreme Court said it was “insignificant” to discuss whether Duterte usurped the legislative because “the proclamation is not a law.”

SC Associate Justice Benjamin Caguioa, one of the two dissenters in that decision, said the administration committed a “constitutional shortcut.”

SC Associate Justice Marvic Leonen, another dissenter, said that by upholding the framework of the Boracay closure, the Supreme Court had “invited a regime that is borderline authoritarian.”

Court Administrator Midas Marquez, who is applying to be an SC justice, has also stepped in, ordering all trial court judges to submit status reports of all PCSO-related cases to the Office of the Court Administrator. –

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Lian Buan

Lian Buan is a senior investigative reporter, and minder of Rappler's justice, human rights and crime cluster.