STL IRR (clean copy 28s10 1500 hrs)

Republic of the Philippines

National Police Commission
PHILIPPINE NATIONAL POLICE
POLICE REGIONAL OFFICE 3
REGIONAL OPERATIONS AND PLANS DIVISION
Camp Olivas, City of San Fernando, Pampanga
MEMORANDUM
TO

All PDs/CDs

FROM

Officer-In-Charge, ROPD

SUBJECT

Comment on the Revised Implementing Rules and

Regulations for Small Town Lottery Operation of the
Philippine Charity Sweepstakes Office

DATE

October 5, 2010

1. Reference: Memo from TADO dated October 5, 2010 with same subject
as above.
2. This pertains to the revised implementing rules and regulations for Small
Town Lottery of the Philippine Charity Sweepstakes Office (STL-PCSO).
3. In this regard, submit your comments and recommendations to this
Office (Attn: LEB) NLT 071200 October 2010 for consolidation and submission to higher
headquarters.
4. For guidance and strict compliance.
BY COMMAND OF PCSUPT ALAN LA MADRID PURISIMA:

LUISITO P MAGNAYE
Police Superintendent

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REVISED IMPLEMENTING RULES AND REGULATIONS FOR
THE SMALL TOWN LOTTERY OF THE PHILIPPINE CHARITY
SWEEPSTAKES OFFICE
Article I
Declaration of Policy, Application, and Areas of Operation
Section 1. Republic Act No. 1169 (as amended), the Philippine Charity
Sweepstakes Office (PCSO) established the PCSO as the principal
government agency for raising and providing funds for health
programs, medical assistance and services, and charities of national
character. It also expressly authorizes PCSO to hold and conduct
lotteries and other similar activities in such frequency and manner
in accordance with the rules and regulations determined by its
Board of Directors.
In faithful pursuit of its mandate, the PCSO Board of Directors
conducted experimental test-runs for the operation of the Small
Town Lottery (hereinafter, STL) as one of the lottery games. After
evaluating the same, and through the issuance of Board Resolution
No. 2433, series of 2009, dated December 18, 2009, approved the
regularization of the STL operations.
Section 2. These Rules and Regulations are hereby promulgated to
regulate the conduct of the various lottery games previously
authorized and/or as may be authorized by the PCSO Board of
Directors to be implemented under the STL.
Section 3. The STL shall be conducted nationwide, and may be
implemented on a per province, chartered city, legislative district or
city/municipality taking into consideration the manpower of the
PCSO and other relevant factors, as may be authorized by the PCSO
Board of Directors.
Section 4. In the selection of areas where the STL shall be implemented,
factors to be taken into consideration shall include, but not be
limited to: a) the result of the actual test runs of the STL in areas
where the same has been implemented; b) the projected viability of
an STL operation in the area; and, c) previous existence and/or
operation of illegal numbers games in the locality.
Section 5. The STL, as a lottery game, shall be implemented with the
following objectives:
a.

To raise additional funds for PCSOs health programs, medical

assistance and services, and charitable undertakings;
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b.

To provide funds to various local government units for

charitable undertakings, economic development, and social
amelioration activities of national character.

c.

To provide an alternative to other illegal numbers

games/operations and to aid in their eradication; and

d.

To provide additional opportunities for employment.

Article III
Definition of Terms

Section 6. For purposes of these Rules and Regulations, unless otherwise

stated herein, the following terms shall mean:
a.Agency Agreement refers to the agreement by and between
the Agent and the PCSO defining their respective authority,
rights, duties and obligations relative to the operation of the
STL in a particular area, in accordance with these Rules and
Regulations.
b. Agency Commission refers to the percentage of the Retail
Receipts considered as the income of the Agent, as
determined herein.
c.Agency Fee - refers to the amount to be paid by an STL Agent
in consideration for the authority to operate STL in a particular
area.
d. Agent refers to a corporation or a cooperative duly
registered with the Securities and Exchange Commission (SEC)
or with the Cooperative Development Authority (CDA) that has
applied, been duly qualified and expressly authorized by the
PCSO to conduct STL in a particular area.
e.Bet refers to the consideration paid by a bettor to
play/participate in a particular STL draw/s.
f. Bettor any person aged 18 years old and above who places
a bet for any STL draw.
g. Board of Directors, Board refers to the policy-making
body of the PCSO, whose powers and functions are provided
under the PCSO Charter.
h. Charity Fund refers to the fund set up for charity purposes
established in the PCSO Charter, equivalent to Thirty Percent
(30%) of the Gross Sales/Receipts.
i. Chairman refers to the Chairman of the PCSO Board of
Directors.

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j. Draw refers to the event wherein the lottery is conducted

and the winning set/combination of numbers is determined, in
accordance with these Rules and Regulations.
k.Games refers to: a) EZ2, whereby a bettor bets a series of
two (2) numbers, each number ranging from 1 to 31; b)
Suwertres, whereby a bettor bets a series of three (3)
numbers, each number ranging from 0-9; c) Pares, whereby a
bettor bets a series of two (2) numbers, each number ranging
from 1 to 37; and, d) such other designs as may be hereafter
authorized by PCSO.
l. General Manager refers to the General Manager of the
PCSO.
m. Gross Sales/Receipts refers to the balance of Retail
receipts less the sum of Agents Commissions and Printing
Costs.
n. Handheld Terminal or HHT - refers to the mobile gadget
which electronically records a bet, prints out the
corresponding ticket and transmits the record of said bet to a
central data center.
o.Illegal numbers game refers to an unauthorized/prohibited
lottery games such as, but not limited to, jueteng, masiao, etc.
p. Illegal numbers operation refers to any unauthorized
collection of bets for any authorized or legal activity such as,
but not limited to loteng, ending, etc.
q. Lottery refers to a game by which a person pays money for
the chance to win money or other thing of value on certain
contingencies, determinable by lot cast in a particular way by
the manager of the game, and in which result mans choice or
will has no part nor can human reason, foresight, sagacity or
design enable him to know or determine such result until the
same has been accomplished.
r. Operating Fund refers to the fund set up for operations
established in the PCSO Charter, equivalent to Fifteen Percent
(15%) of the Gross Sales/Receipts
s.PCSO refers to the Philippine Charity Sweepstakes Office,
with powers and functions provided for under Republic Act No.
1169, as amended by Batas Pambansa Blg. 42 and
Presidential Decree No. 1157.
t. PCSO Charter, Charter refers to Republic Act No. 1169, as
amended by Batas Pambansa Blg. 42 and Presidential Decree
No. 1157.
u. Retail Receipts refers to the actual bets collected from
bettors.
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v. Presumptive Monthly Receipts refers to the amount of Retail

Receipts presumed to have been collected by the Agent in a
month, declared by the Agent in its application.
w. Printing Costs refers to the cost for printing established in
the PCSO charter, equivalent to two percent (2%) of the Retail
Receipts.
x.Prize Fund - refers to the fund set up for prizes established in
the PCSO charter, equivalent to Fifty-five Percent (55%) of the
Gross Sales/Receipts.
y. Sales Force collectively refers to the sales personnel, i.e.,
Sales Representatives and Sales Supervisors, of the Agent.
z.Sales Representative refers to any person employed by an
Agent tasked to collect bets in accordance with these Rules
and Regulations.
aa. Sales Supervisor refers to any person tasked to supervise
Sales Representatives.
ab. Small Town Lottery, STL refers to a form of lottery
authorized and implemented by the PCSO implemented at the
local level.
ac. Ticket refers to the official ticket printed and/or duly
authorized to be printed by the PCSO, which shows the details
of a bet for a specific STL draw in a particular area and serves
as proof thereof.
ad. Taxes on Prizes refers to the amount paid to the Bureau of
Internal Revenue for prizes as established in the PCSO Charter,
equivalent to Five Percent (5%) of the Prize Fund
Article IV
Supervision and Monitoring
Section 7. In order to properly supervise and monitor STL operations
nationwide, the PCSO Board of Directors shall designate a
supervision and monitoring group that will supervise and monitor
the overall operations of the STL. The STL supervision and
monitoring group shall, among others, perform the following
functions:
a. Process and evaluate all applications filed by legal entities that
have signified intent to become STL Agents of the PCSO.
b. Submit to the PCSO Board of Directors for appropriate action,
through the General Manager, its recommendation on the
application/s.

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c. Coordinate with all other PCSO departments involved in the

STL operations nationwide.
d. Undertake all relevant and necessary activities authorized by
PCSO for the proper supervision and monitoring of operations
of and collections from Agents to ensure the successful
implementation of the STL.
Article V
Application, Evaluation and Qualifications of STL Agents
Section 8. The appointment of an STL Agent shall be limited to a
corporation or a cooperative organized under Philippine laws and
which possesses all the qualifications prescribed hereunder:
a. It must be a corporation/cooperative whose primary or main
purpose is to conduct STL operations.
b. Its principal office must be located within the province,
congressional/legislative
district,
chartered
city,
municipality/cluster of municipalities, wherein it currently
conducts business or intends to operate, and must have such
stations/branches in strategic locations therein.
c. It must have in its employ the necessary personnel
complement to efficiently undertake STL operations in the
area applied for, as determined by the Supervision Monitoring
Group.
d. It must be one hundred percent (100%) Filipino-owned.
e. It must have a minimum authorized capital stock of Fifty
Million Pesos (Php50,000,000.00), with a minimum paid-up
capital of Twelve Million Five Hundred Thousand Pesos
(Php12,500,000.00).
f.

It must possess the necessary competence, expertise and

credibility to undertake STL operations.

Section 9. The applicant is required to submit to PCSO the following

documents:
a. Duly accomplished STL Agency Application Form (STL-AAF),
signed by any of its following officers: Chairman, President,
Chief Executive Officer or General Manager;
b. Corporate/Cooperative Secretarys Certification of a resolution
from the board of the corporation/cooperative board granting
him/her the authority to execute/sign the said application,
and particularly stating therein the area applied for;
c. Certified true copy of its Articles of Incorporation/Cooperation,
as well as its Constitution and By-Laws, duly registered with
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the Securities and Exchange Commission (SEC)/Cooperative

Development Authority (CDA);
d. Company Profile, Organizational Structure and, if applicable,
the past and current Business Portfolio.
e. Tax Clearance and/or Certificate of Registration duly issued by
the Bureau of Internal Revenue (BIR);
f. Audited Financial Statements (FS) and Income Tax Return (ITR)
for the immediately preceding year, if applicable;
g. Duly accomplished Joint and Several or Solidary Undertaking
form, duly notarized, executed by each of the members of the
Board
of
Directors
and
principal
officers
of
the
corporation/cooperative.
h. Comprehensive Curriculum Vitae/Bio-Data of its Corporate
Officers and Directors showing their qualifications and
experience.
i. Feasibility study on the proposed STL area applied for,
showing the projected viability of the implementation of the
STL in the said area, taking into account the following
considerations: (1) information/data on illegal numbers games
which have operated in their proposed area, particularly on its
estimated daily sales based on field reports, (2) financial
statistics indicating projected STL sales and income, (3)
employment to be generated, to include both sales force
complement and administrative/management personnel, (4)
profile of the proposed area in terms of population, main
sources of livelihood, local products, trade and industry, peace
and order condition, and other relevant information, and (5)
proposed operating plan;
j. Official Receipt (OR) issued by the PCSO Treasury Department
for the payment of the processing fee of Fifty Thousand Pesos
(P50,000,.00)l; and,
k. Such other documents as the PCSO may deem necessary or
proper to assess the capacity of the corporation, and to
ascertain the feasibility of the implementation of the STL in
the area concerned.
Section 10. In the event of a favorable evaluation of the application, the
PCSO Board of Directors, thru the recommendation of the General
Manager, shall issue a resolution approving the same.
Section 11. Within fifteen (15) days following receipt of a written notice of
the approval of its application by the PCSO Board of Directors, the
applicant shall comply with the post-approval procedural
requirements, such as, but not limited to the submission of the list
of all its employees, supervisors and representatives.

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Section 12. After the submission of and compliance with all the postapproval requirements, the Agent applicant shall be issued an order
to pay a non-refundable Agency Fee according to the following
schedule.
Coverage
Province
Legislative District
City/Municipality

Amount
(in millions of Pesos)
P20 to P25
P15 to P20
P10 to P15

Period to pay
(from written notice)
Thirty (30) days
Thirty (30) days
Fifteen (15) days

Section 13. Upon receipt of the written notice from the PCSO, the Agent
applicant shall also deposit with the PCSO Treasury Department the
required performance bond with a reputable bonding company
acceptable to the PCSO, in the same amount as its required Agency
Fee, which shall answer for faithful compliance of its duties and
responsibilities under these Rules and Regulations and in the
Agency Agreement, including, but not limited to, non-remittance,
loss or theft of the STL proceeds, damages and all other liabilities of
the agent to the PCSO, its Board of Directors, officers and
employees, or to third-parties, arising from the conduct of STL
operations.
Section 14. After the Agent applicant shall have paid the agency fee and
posted the required performance bond, it shall execute the
corresponding Agency Agreement and Performance Bond
Agreement.
Article VI
Obligations of STL Agents
Section 15. The Agent shall strictly comply with the following duties and
obligations contained in this article, among its other duties and
obligations in these Rules and Regulations. Failure to comply with
any of its duties and obligations shall be a ground for the
cancellation of the Agency Agreement, revocation of its authority to
operate, and forfeiture of the Performance Bond.
Section 16. The Agent shall, in the conduct of its operation have, among
others, the following duties and responsibilities:
a. Sell STL Tickets for the STL games and other PCSO lottery
products, as may be mandated or authorized, only to
individuals 18 years and above. No bet must be accepted
from minors whether in their own behalf or that of another.
b. Provide its sales force and other employees with PCSOprescribed uniforms and Identification cards which must be
strictly worn and prominently displayed when they are on duty.
c. Furnish the PCSO, Department of Interior and Local
Government, Philippine National Police, the concerned local
government unit, and other offices as may be mandated, a list
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of its sales force and employees, indicating and their

corresponding
Identification
numbers
and
specimen
signatures. Any addition and/or subtraction from said list must
be submitted to said parties within 24 hours from the
effectivity of the same.
d. Use HHTs for the recording of bets, printing of Tickets and online transmission of recorded bets.
Should no HHT be available or operable, due to the lack of
technical facilities, the Agent shall use the pre-printed Tickets,
as designed by the PCSO, in such manner as prescribed. The
supervisor shall send the list of bets, in the prescribed form,
no later than Twenty (20) minutes before each draw, through
fax/ email to the PCSO-designated hotlines/email address.
e. Remit to the PCSO the amounts equivalent to the Printing
Cost, Charity Fund and Operating Fund, corresponding to the
Retail Receipts, within the first hour of the banking day
immediately following the collection thereof. Any delay shall
merit a penalty of 1/10 of 1% on the amount due, computed
from due date to the date of actual remittance. Three (3)
instances of delay will be a ground for the cancellation of the
Agency Agreement, revocation of its authority and forfeiture of
the Performance Bond.
Any deficiency in the remittance based on the actual Retail
Receipts remitted in a month and that expected from the
Presumptive Retail Receipts, as stated in the STL-AAF, shall be
remitted immediately by the Agent, upon written notice from
PCSO.
f.

Pay within the first five (5) days of every month or as may be
required by law, all taxes, fees and other charges dues to the
government relative to its existence or operation as an Agent
and submit to PCSO proof of said payment immediately
thereafter.

g. Maintain a separate account for the Prize Fund, which shall be

subject to audit by PCSO at anytime within office hours. For
this purpose the Agent shall issue a continuing authority to
PCSO or its duly authorized representative/s to inquire into
said account with any and all banks.
h. Regularly submit to PCSO reports on required information, in
the form and frequency as may be prescribed by PCSO.
i.

Keep proper books of accounts of its operation in accordance

with generally accepted accounting principles and as may be
required by PCSO and/or Commission on Audit. Said books and
other records and documents in support thereof must be kept
at its principal office, and must be made readily available for
inspection by PCSO or its authorized representatives and the
Commission on Audit at anytime.
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Section 17.
The authority under the Agency Agreement is exclusive
and non-transferable. Thus, the Agent cannot transfer its rights or
obligation under said agreement. Likewise, the Agent or any of its
shareholders may not assign, transfer, cede, sell or dispose or any
portion of its/their stock/shares to any natural/juridical person/s
without the prior written approval by PCSO.
ARTICLE VII
DRAW PROPER
Section 18. Draws shall be centralized and conducted at the offices of the
PCSO, or such other designated venue, as often times a day as may
be determined by the PCSO.
Section 19. The centralized draws shall be broadcast live on national
television and/or reported/published on national/local radio/print
media.
Section 20. Until such time as such centralized draws are in place, the
Agent shall conduct its local draws, under the supervision of PCSO
or its duly authorize representatives, including all previously
prescribed pre-draw procedures, publicly and transparently at such
previously approved times and places. The pre-draw and draw
proceedings for each local draw must be recorded and collated
chronologically, manifesting clearly the date and time of each local
draw, on a weekly basis. The recorded and collated material shall
be sent to PCSO, through its Regional/Provincial District Office on
the first working day of the week following the recording.
Moreover, the Agent must immediately and extensively disseminate
the results of each local draw through its sales force verbally and
broadcast through national/local radio. The Agent must secure a
certification of each broadcast, containing the results of the local
draw, from the contracted station/s. Such certifications must be
submitted together with the recorded material.
Article VIII
Allocation of Retail Receipts
Section 21.

The Retail Receipts shall be allocated as follows:

Item

Retail Receipt
Agency Commission

For

Agen
t
PCSO

Printing Cost
Gross Sales/Receipts
Prize Fund (55% of Gross Sales/Receipt, net of PCSO
taxes)

Percentage
of Retail
Receipt
100.00
18.00
2.00
80.00
41.80
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Taxes (5% of Prize Fund)

Charity Fund (30% of Gross Sales/Receipt)
Operating Fund (15% of Gross Sales/Receipt)

BIR
PCSO
PCSO

2.20
24.00
12.00

Section 22. The Prize Fund shall be held in trust by the Agent and used
exclusively to pay the winning tickets. Any balance of the Prize Fund
at the end of the contract or upon its termination or cancellation,
shall be remitted to PCSO to form part of the latters Charity Fund.
Section 23. The Charity Fund shall be distributed by PCSO on a monthly
basis in the following percentages of the Gross Sales/Receipts:
Beneficiary
Province
Province
Legislative
District
City/Municipalit
y
PNP

10
5

Coverage of Agent
Legislative
City/Municipalit
District
y
5
5
10
5

10

10

10

10

Article IX
STL TICKETS, WINNINGS, RESTRICTIONS
Section 24. Agents shall only use the official Tickets printed by the HHT,
and/or its duly authorized and accredited printer/s in accordance
with the prescribed form and design.
Section 25. The Ticket is a bearer instrument. Thus, the holder is
presumed to be its owner. PCSO and/or the Agent or any of their
officers/employees shall not be responsible for lost tickets.
Section 26.
A Ticket containing the winning combination for a
particular draw shall be paid the corresponding prize provided the
following circumstances concur:
a. It contains the winning series/combination of numbers;
b. It is complete in all pertinent aspects;
c. It is free from any alteration, mutilation, erasures, markings,
irregularity or any other sign of tampering; and,
d. It is verified and declared authentic by the Agent.
Any complaint on unpaid winning tickets shall be brought in writing
to the PCSO, whose decision shall be final and unappealable.
Section 27. Winners shall claim their prizes from any Agent. Prizes not
claimed within one (1) year from draw date shall be forfeited and
shall be remitted to the PCSO to form part of its Charity Fund.
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Section 28.
No prize shall be paid to or redeemed by any person
under the age of eighteen (18) years.
Section 29. The prize for each bet of one peso (P1.00) shall be set by the
Board of Directors and shall be paid from the prize fund. In the
event that the amount of the prizes to be paid by the Agent in a
particular draw exceeds the prize fund allocated for that particular
draw, the amount of deficiency shall be shouldered solely by the
Agent. However, said deficiency can be recouped from general
prize funds.
Article X
Grounds for Cancellation/Revocation/Termination of the Agency
Agreement
Section 30. The PCSO Board may cancel, revoke or terminate the Agency
Agreement of any STL Agent on any of the following grounds:
a.

Failure to organize and operate the STL in the areas assigned

within a period of sixty (60) days from the date of the Agency Agreement;

b.

Failure to submit any document and comply with any

requirement of PCSO within the required period;

c.

Change of ownership of the Agent, unless authorized in writing

by the PCSO Board;

d.

Unauthorized suspension or termination of operation for more

than three (3) days;

e.

Failure to reach the prescribed presumptive sales/quota for

three (3) consecutive months;

f.

Failure or refusal to pay the legitimate winning ticket despite

its due presentation, or decision of the PCSO, as the case may be;

g.

Commission of fraudulent acts or misrepresentations, such as,

but not limited to:
1. Supplying false information regarding itself or its owners;
2. Providing false or incorrect information on any pertinent
fact regarding the STL operations and management;
3. Manipulation of the
payment process.

betting,

collection,

draw

and

h.

Violation of any provision of these Rules and Regulations, and

of pertinent and relevant PCSO issuances, directives, memoranda or
circulars, and existing applicable laws;

i.

Violation of any of the provisions contained in the STL Agency

Agreement; and,
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j.

Commission of any act or causing/creating any situation by

the Agent and/or its officers and employees, whether intentional or not,
that may be prejudicial to PCSO as may be determined by the PCSO
Board.
Section 31. PCSO shall notify the Agent in writing of its decision to
cancel/terminate or revoke the Agency Agreement who, in turn, has
fifteen (15) days from receipt thereof within which to contest said
decision. The resolution by the PCSO of said contest shall be final
and unappealable.
Article XI
Miscellaneous Provisions
Section 32. These Rules and Regulations may be modified, amended or
supplemented as the need arises, or as the situation may require,
through the issuance of an appropriate resolution by the PCSO
Board of Directors, upon the recommendation of its Chairman or the
General Manager.
Section 33. All existing rules and regulations, board resolutions, circulars,
memoranda, and directives from the PCSO inconsistent with these
Rules and Regulations if any, are hereby amended, revoked,
repealed or superseded.
Section 34. These Rules and Regulations shall take effect immediately
upon approval by the PCSO Board of Directors.

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