Philippine Amusement and Gaming Corporation v. Philippine Gaming Jurisdiction Incorporated
REITERATIONFacts
The Antecedents: The Philippine Amusement and Gaming Corporation (PAGCOR) filed a petition for Prohibition against the Zamboanga City Special Economic Zone Authority (ZAMBOECOZONE Authority) and Philippine Gaming Jurisdiction, Inc. (PEJI). The ZAMBOECOZONE Authority, in Resolution No. 2006-08-03, approved PEJI's application to be a Master Licensor/Regulator of on-line/internet/electronic gaming/games of chance. PEJI then advertised itself as such licensor. Procedural History: The case reached the Supreme Court via a petition for Prohibition filed by PAGCOR. The Petition: PAGCOR assails the authority of the ZAMBOECOZONE Authority to operate, license, or regulate games of chance within the ZAMBOECOZONE, contending that Republic Act No. 7903, specifically Section 7(f), does not grant such power. PAGCOR argues that unlike other statutes creating economic zones which explicitly grant powers related to games of chance, R.A. No. 7903's use of "games" and "amusements" does not include "games of chance."
Issue(s)
Whether the ZAMBOECOZONE Authority has the power under R.A. No. 7903 to operate, license, or regulate games of chance. Whether the terms "games" and "amusements" in Section 7(f) of R.A. No. 7903 include "games of chance."
Ruling
The petition is GRANTED. The ZAMBOECOZONE Authority is DIRECTED to CEASE and DESIST from exercising jurisdiction to operate, license, or otherwise authorize and regulate the operation of any games of chance. PEJI is DIRECTED to CEASE and DESIST from operating any games of chance pursuant to the license granted to it by the ZAMBOECOZONE Authority.
Ratio Decidendi
On whether the ZAMBOECOZONE Authority has the power under R.A. No. 7903 to operate, license, or regulate games of chance: The Court ruled that R.A. No. 7903 does not grant the ZAMBOECOZONE Authority the power to operate or license games of chance. Section 7(f) of the law authorizes the ZAMBOECOZONE Authority "[t]o operate on its own, either directly or through a subsidiary entity, or license to others, tourism-related activities, including games, amusements and recreational and sports facilities." The Court applied the plain meaning rule (verba legis), stating that where the words of a statute are clear, plain, and free from ambiguity, they must be given their literal meaning and applied without interpretation. The Court found no absurdity, contradiction, or injustice in adhering to the literal meaning of "games" and "amusements" as distinct from "games of chance." On whether the terms "games" and "amusements" in Section 7(f) of R.A. No. 7903 include "games of chance": The Court held that the terms "game" and "amusement" have definite and unambiguous meanings in law that are clearly different from "game of chance" or "gambling." In its ordinary sense, a "game" is a sport, pastime, or contest, while an "amusement" is a pleasurable occupation of the senses, diversion, or enjoyment. Conversely, a "game of chance" is defined as "a game in which chance rather than skill determines the outcome," and "gambling" is "making a bet" or "a play for value against an uncertain event in hope of gaining something of value." The Court contrasted Section 7(f) of R.A. No. 7903 with similar provisions in other statutes creating economic zones, such as R.A. No. 7922, which explicitly authorized the Cagayan Economic Zone Authority to operate gambling and casinos. The Court noted that the legislature could have easily employed the words "games of chance" and "gambling" if that was their intent, as they did in R.A. No. 7922, enacted only a day after R.A. No. 7903. The Court also gave weight to the Opinion of the Office of the President, which found that ZAMBOECOZONE was not authorized to enter into gaming activities under its legislative franchise.
Main Doctrine
The Zamboanga City Special Economic Zone Authority (ZAMBOECOZONE Authority) is not authorized by Republic Act No. 7903 to operate or license games of chance, as the terms "games" and "amusements" in Section 7(f) of the law do not encompass "games of chance" or "gambling."