GR 144463; (January, 2004) (Digest)
G.R. No. 144463 ; January 14, 2004
SENATOR ROBERT S. JAWORSKI, petitioner, vs. PHILIPPINE AMUSEMENT AND GAMING CORPORATION and SPORTS AND GAMES ENTERTAINMENT CORPORATION, respondents.
FACTS
The Philippine Amusement and Gaming Corporation (PAGCOR), a government-owned corporation created under Presidential Decree No. 1869, executed a “Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming” in favor of respondent Sports and Games and Entertainment Corporation (SAGE). This agreement authorized SAGE to operate sports betting stations and internet gaming facilities. SAGE subsequently commenced trial-run operations for internet gambling.
Petitioner Senator Robert Jaworski, as a Senator and Chairman of the Senate Committee on Games, Amusement and Sports, filed this petition for certiorari and prohibition. He sought to nullify the grant of authority, arguing that PAGCOR’s legislative franchise, PD 1869, does not authorize it to operate internet gambling. He contended that the decree, enacted in 1983, could not have contemplated internet gambling, which transcends territorial jurisdiction and does not fall under the enumerated activities like “gambling casinos” or “clubs,” which imply physical structures.
ISSUE
Whether PAGCOR’s legislative franchise under PD 1869 authorizes it to delegate or share its franchise by granting SAGE the authority to operate internet gambling.
RULING
The Supreme Court GRANTED the petition and declared the Grant of Authority and Agreement NULL and VOID. The Court ruled that PAGCOR’s franchise is a special privilege granted by the State, which it must exercise personally and cannot delegate without express legislative authority. The legal principle delegata potestas delegare non potest (a delegated power cannot be further delegated) applies. PD 1869 authorizes PAGCOR to enter into operator’s or management contracts but does not permit it to relinquish or share its franchise itself.
By granting SAGE the authority to operate internet gambling, PAGCOR effectively conferred a veritable franchise upon a private entity. This act constituted a grave abuse of discretion amounting to lack or excess of jurisdiction. For SAGE to legally operate such gambling activities, it must secure its own separate legislative franchise from Congress; it cannot merely “ride on” PAGCOR’s franchise. The Court thus upheld the inviolability of a legislative franchise as a personal grant that cannot be sub-delegated absent clear statutory permission.