House bill proposes to tax offsite betting on cockfights, other electronic gambling

OFFSITE betting on cockfights, known as electronic sabong (e-sabong), could come in for more attention from the tax authorities after a bill was filed in the House of Representatives proposing a new electronic gambling tax to fund coronavirus containment efforts.

House Ways and Means Committee Chairman Jose Maria Clemente S. Salceda said Wednesday that the government should have a clear policy on offsite betting for cockfights, which currently fall into a regulatory “gray area.”

“The operations are already legal, by virtue of local ordinances, but the electronic aspect of it is a legal gray area. Because of the ambiguity, we are unable to levy national taxes on these activities, or look into their operations. My bill addresses that concern,” Mr. Salceda said in filing House Bill (HB) No. 7919.

HB 7919 proposes amendments to the National Internal Revenue Code of 1997 which clarify the tax treatment of offsite betting.

“The tax shall be 5% of gross revenues derived from offsite betting activities, and shall not be in lieu of taxes required by the local government units, and regulatory fees and charges imposed by government agencies,” Mr. Salceda said.�� “This is consistent with the bill’s intention not to overstep the authority of the local government units (LGUs).”

Mr. Salceda said most offsite betting activity represents electronic derivatives of “already-licensed physically-conducted activities.”

“Several LGUs have authorized these activities within their jurisdictions. However, because the regulatory framework for such activities has not been clarified, the national government has been unable to maximize the revenue potential of such activities,” he said.

“The Bureau of Internal Revenue (BIR) does not have clear and explicit legal oversight on the revenue-generating capacity of these activities,” according to the bill. “Many such activities do not fall within the purview of the government gaming agencies, such as the Philippine Amusement and Gaming Corporation (PAGCOR) or the Philippine Charity Sweepstakes Office (PCSO).”

Republic Act No. 7160, or the Local Government Code, grants LGUs the authority to “authorize and license the establishment, operation, and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks.”

Mr. Salceda, however, said the code appears not to have anticipated “the limits of these powers in the case of electronic betting on such activities.” — Kyle Aristophere T. Atienza