PCSO reviews lotto machine lease contract

MANILA, Philippines -  The Philippine Charity Sweepstakes Office (PCSO) is reviewing the legality of its agreement with its lotto machine supplier, which was the subject of a privilege speech recently made by Bayan party-list Rep. Neri Colmenares, an official said yesterday.

In a radio interview, PCSO chair Margarita Juico said the PCSO is checking the contracts with the Philippine Gaming and Management Corp. (PGMC)-Berjaya and Pacific Online.

PGMC-Berjaya operates the online lotto draw in Luzon while another gaming firm operates in the Visayas and Mindanao area.

In 1995, the PCSO leased 3,525 lotto machines from PGMC-Berjaya, which was paid 4.3 percent of gross lotto sales generated with the use of the machines.

Under the agreement, the PCSO had the option of buying the machines for P25 million at the end of its eight-year contract with its supplier.

However, Colmenares said instead of exercising its option to buy the machines for P25 million, the PCSO renewed the lease, this time at 6.85 percent of gross sales, plus three percent for telecom services and 15 percent for maintenance and repair, for a total of 10 percent. The new contract will run up to 2015.

Colmenares said in 2009 alone, the PCSO grossed P27 billion in lotto sales and paid PGMC-Berjaya P2.7 billion for the lease of the machines.

Juico said the PCSO charter has clearly defined how much of the lotto sales will go to the prize fund, charity and operational expenses but the past administration reportedly mixed up the charity and operational funds, making it difficult to determine where the payment for the gaming firms were sourced.