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Sandoval v.

PAGCOR, 346 SCRA 485


Facts:

The Philippine Amusement and Gaming Corporation is a government-owned and


controlled corporation organized and existing under Presidential Decree No. 1869 which was
enacted on July 11, 1983. Pursuant to Sections 1 and 10 of P.D. No. 1869, respondent
PAGCOR requested for legal advice from the Secretary of Justice as to whether or not it is
authorized by its Charter to operate and manage jai-alai frontons in the country.Secretary of
Justice opined that the authority of PAGCOR to operate and maintain games of chance or
gambling extends to jai-alai which is a form of sport or game played for bets and that the
Charter of PAGCOR amounts to a legislative franchise for the purpose. Similar favorable
opinions were received by PAGCOR from the Office of the Solicitor General per its letter
dated June 3, 1996 and the Office of the Government Corporate Counsel under its Opinion
No. 150 dated June 14, 1996. Thus, PAGCOR started the operation of jai-alai frontons.
Federico S. Sandoval II and Michael T. Defensor filed a Petition for Injunction, which seeks to
enjoin respondent PAGCOR from operating or otherwise managing the jai-alai or Basque
pelota games by itself or in joint venture with Belle Corporation, for being patently illegal,
having no basis in the law or the Constitution, and in usurpation of the authority that
properly pertains to the legislative branch of the government.
Issue:
Held:

Whether or not PAGCOR has a franchise to operate jai-alai.

The Supreme Court ordered the closure of all jai alai betting stations in the country
after it found the game operators did not have the required franchise from Congress. SC
justices said that contrary to what it says, the Philippine Amusement and Gaming Corp.
(Pagcor) does not have the power to grant a franchise for jai alai operations. It was ruled
that Pagcor had erred when it granted Bell Jai Alai Corp. and Filipinas Gaming Entertainment
Totalizator Corp. (Filgame) the authority to manage, maintain and operate jai alai. From its
creation in 1977 and until 1999, Pagcor never alleged that it has a franchise to operate jai
alai.Twenty-two years is a long stretch of silence. It is inexplicable why it never claimed its
alleged franchise for so long a time, which could have allowed it to earn billions of pesos as
additional income. Four congressmen earlier questioned Pagcor approval of the revival of jai
alai operations. Petioners
claimed that Pagcor and the two private companies usurped
Congress authority of granting franchises to legal gambling. Pagcor cannot use the decrees
issued by deposed dictator Ferdinand Marcos on jai alai since these had been revoked when
Corazon Aquino took over the presidency in 1986. It was noted that on May 1987, Aquino
issued Executive Order 169 which repealed Marcos presidential decrees 810 and 1124. "The
new order revoked the jai alai franchise. The law is clear on the extent of Pagcors powers.
There can be no sliver of doubt that Pagcors franchise is only to operate gambling casinos
and not jai alai.