Claims Rehashed Issues Raised by Government Audit "Highly Unusual"
MANILA, PHILIPPINES - Leading Philippine gaming firm, PhilWeb Corp., a strategic partner of the Philippine Amusement and Gaming Corporation (PAGCOR) for its internet casino operations in the country, fired back at the Commission on Audit's (COA) report that stated that PAGCOR renegotiate its contract with PhilWeb that seemed to COA to be advantageous only to the latter.
Through its president, Dennis Valdes, PhilWeb disputed the issues raised by the COA report particularly that the fees paid by the state gaming agency to PhilWeb as well as cash management of PAGCOR's internet gaming operations were not in the best interest of the government.
A Very Advantageous Contract to PAGCOR
In a letter sent to the Philippine Daily Inquirer, Valdes said that contrary to the COA report, the agreement between PhilWeb and PAGCOR was very advantageous to the latter as it receives 60% of winnings while PhilWeb pockets the remaining 40%.
He claimed that for 2010 alone, PhilWeb is expected to remit to PAGCOR about Php1.3 billion in casino winnings and that in previous years, PhilWeb's remittances to PAGCOR have run from hundreds of millions to billions of pesos.
Valdes further claimed that the remittances come to PAGCOR at no cost at all as it was his firm that shouldered capital expenditures and the operating costs of the internet casinos it manages for PAGCOR which costs for PhilWeb hundreds of millions of pesos.
According to Valdes:
"In actual fact, PAGCOR has negotiated a very advantageous contract with PhilWeb. The enormous amounts that PAGCOR derives from this contract, without spending a single centavo, speak for themselves."
He also pointed out that the current deal between PAGCOR and PhilWeb also allowed for PAGCOR to get a higher share of the profits compared to a similar deal with another internet casino operator, Sage Internet Casinos.
More Than Just a Middleman
Valdes also lashed back at the COA suggestion that PAGCOR deal directly with Real Time Gaming (RTG), the casino software provider, as PhilWeb, it claimed, only acted asa "middleman".
COA stated in its 2009 report that PhilWeb was paid a 10% license fee for the software used in its internet casino operations. The report noted PhilWeb had no casino software capability and was merely fronting for RTG which provided the actual software.
Valdes lamented that COA's statements on PhilWeb just being a mere middleman only showcased the audit agency's lack of understanding of the internet casino business.
Valdes explained that while it is true that RTG provided the casino software, PhilWeb was the one putting up the actual infrastructure thru which internet casino games can be played. Its contract with PAGCOR called for the firm to setup a network of internet cafes where the casino games can be played.
As further explained by Valdes:
"(T)he internet casino contract is for 'the development of a system, particularly a payment platform or a point of sale system (POS) and an application programming interface (API)' ... that would then work with the RTG software to run a cafe-based operation, as opposed to a true internet operation.
In short, PhilWeb provides various softwares to complete the entire internet casino system and is not just a mere middleman."
In the Philippines, while no definitive law on internet casino gaming exists, Filipinos can still play online casino games via casino game kiosks or cafes branded by PhilWeb and PAGCOR as "eGames".
Valdes further noted that the comments made by PAGCOR regarding the deal were "a rehash" of comments made in 2007 which were already sufficiently answered by the state agency back then. The gaming firm's president said that the inclusion of the comments in the 2009 report was "highly unusual."
Sourced from Inquirer.net
