Billions lost as tax collections on e-sabong fall through cracks (Sabong News)
Author
Butch Fernandez
Date
MARCH 22 2022
WHILE government scrounges for funds for pandemic response and economic recovery, it has failed to maximize revenue from the controversial e-sabong, where uncollected tax on winnings of bettors could reach billions of pesos, a lawyer-senator said.
Senator Francis N. Tolentino prodded the Bureau of Internal Revenue (BIR) and the Philippine Amusement and Gaming Corp. (Pagcor) to heed President Duterte’s directive to step up revenue collection to bankroll the administration’s projects and public services.
Tolentino was aghast at hearing an admission by BIR officials at the hearing of the Senate Committee on Oublic Order and Dangerous Drugs that, since April 2020 when e-sabong licenses were issued, they have not collected taxes on winnings, which normally would have come up to 20 percent.
He reminded revenue collectors to ensure correct tax dues are remitted to the government by the two agencies as well as other revenue sources, including the “On-Line Sabong” winning bettors, apart from other sources with uncollected tax duties.
“Pagcor should ensure correct collection of right tax dues from the operators of e-sabong, or online cockfighting, as well as winning bettors,” Tolentino said as the committee chaired by Sen. Ronald “Bato” M. dela Rosa continued inquiring into the disappearance of at least 34 “sabungeros” (cockfight workers, collectors, managers). The apparent abductions had prompted 23 senators to sign a resolution urging Pagcor to suspend all e-sabong operations until the fate of the missing is resolved, but President Duterte rejected that proposal last week, saying e-sabong brings in billions of revenue that government badly needs.
This prompted Tolentino to grill the Pagcor and BIR officials at Monday’s hearing on whether they are maximizing collections from the controversial trade, only to find out that the only fee paid by e-sabong operators is a “regulatory fee or franchise fee” to Pagcor, or P12,500 for every cockfight.
Since the Pagcor granted license for e-sabong in April 2020, senators were told there was no collection of withholding tax from winners in e-sabong bets when they should have paid 20 percent in taxes, similar to the tax paid by winners of lotto and sweepstakes.
Tolentino noted that some “P2-billion up to P3-billion bets” are made each day of cock derby, quoting gaming businessman Charlie Atong Ang, whom he described as the “biggest e-sabong operator” in the country.
A Bloomberg special report published in BusinessMirror on March 12 described Ang as “the brain behind Pitmasters Live, the top-shelf brand of online cockfighting. His group streams matches round-the-clock, averaging around 350 a day and partnering with breeders across the country. Digital payment platforms and hundreds of agents facilitate access to the Pitmasters webcast, take wagers and disburse winnings.”
Of the daily P2 billion to P3 billion in bets made, according to the Bloomberg report, 95 percent goes to bettors as winnings and the remaining 5 percent to Pitmasters and its agents as commission. Another P135 million is paid as a monthly tax to Pagcor, which has used funds to fight the pandemic.
“Ang, 63, said his group’s revenue each month is P1.5 billion, a huge sum considering Bloomberry Resorts Corp., which operates one of the country’s biggest casinos, pulled in profits of about 10 billion pesos in 2019,” noted Bloomberg.
In an earlier Senate hearing, Pagcor put its average monthly income from e-sabong at P690 million.
