In a legal face-off, the Supreme Court sided with the Philippine Amusement and Gaming Corporation (PAGCOR), clarifying the extent of authority granted to economic zones. Specifically, the Court determined that the Zamboanga City Special Economic Zone Authority (ZAMBOECOZONE) does not have the power to operate, license, or regulate games of chance within its zone. This decision reinforces PAGCOR’s mandate to oversee and regulate gambling activities, ensuring uniformity and consistency in the enforcement of gaming laws across the Philippines.

Navigating Ambiguity: Can an Economic Zone License Games of Chance?

The case arose from a dispute between PAGCOR and ZAMBOECOZONE over the latter’s authority to license gaming activities within its economic zone. ZAMBOECOZONE, relying on Republic Act No. 7903 (R.A. No. 7903), specifically Section 7(f), argued that its power to operate or license “tourism-related activities, including games, amusements, and recreational and sports facilities,” included the authority to regulate games of chance. PAGCOR countered, asserting that R.A. No. 7903 did not explicitly grant ZAMBOECOZONE the power to license or regulate games of chance, and that such authority was reserved for PAGCOR under its charter, Presidential Decree No. 1869. The central legal question was whether the general terms “games” and “amusements” in R.A. No. 7903 could be interpreted to include “games of chance,” thus granting ZAMBOECOZONE the power to license gambling activities.

PAGCOR argued that statutes creating other economic zones, such as the Subic Bay Metropolitan Authority and the Cagayan Economic Zone Authority (CEZA), expressly granted those entities the power to operate and license games of chance. The absence of such explicit language in R.A. No. 7903, PAGCOR contended, indicated that the legislature did not intend to grant ZAMBOECOZONE similar authority. ZAMBOECOZONE, in its defense, maintained that the terms “games” and “amusements” should be interpreted broadly to include games of chance, reflecting the legislature’s intent to promote tourism and economic development within the zone.

The Supreme Court, in its analysis, applied the principle of verba legis, which dictates that when the words of a statute are clear and unambiguous, they must be given their literal meaning. The Court found that the terms “game” and “amusement” have distinct meanings that do not encompass “games of chance” or “gambling.”

The words “game” and “amusement” have definite and unambiguous meanings in law which 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.

Moreover, the Court compared the language of R.A. No. 7903 with similar provisions in other statutes creating economic zones. It highlighted that while other statutes explicitly authorized the operation and licensing of gambling activities, R.A. No. 7903 did not. The Court also took note of the Office of the President’s opinion, which supported PAGCOR’s interpretation, and gave deference to this opinion under the doctrine of respect for administrative construction.

The ruling clarifies that economic zones do not automatically possess the authority to regulate gambling activities unless explicitly granted by law. This reinforces PAGCOR’s central role in overseeing and regulating gaming in the Philippines. The decision also serves as a reminder of the importance of clear and precise language in legislative enactments, particularly when defining the powers and authority of government entities.

This case underscores the significance of adhering to the plain meaning of statutory language and the principle that specific grants of authority cannot be implied from general terms. By narrowly interpreting the scope of ZAMBOECOZONE’s authority, the Court ensured that the regulation of gambling remains centralized under PAGCOR’s control. Such consistency is crucial for maintaining public order and preventing potential abuses within the gaming industry.

FAQs

What was the key issue in this case?	The central issue was whether the Zamboanga City Special Economic Zone Authority (ZAMBOECOZONE) had the authority to operate, license, or regulate games of chance within its economic zone based on R.A. No. 7903.
What is the significance of PAGCOR in this case?	PAGCOR, the Philippine Amusement and Gaming Corporation, claimed that it has the sole authority to regulate and license games of chance, which was allegedly encroached upon by ZAMBOECOZONE’s actions.
What did the Supreme Court decide?	The Supreme Court ruled in favor of PAGCOR, stating that ZAMBOECOZONE does not have the authority to operate or license games of chance based on the language of R.A. No. 7903.
What is verba legis and how did it apply in this case?	Verba legis is a principle of statutory construction that says when the words of a statute are clear, they should be given their literal meaning. The Court applied this principle to interpret the terms “games” and “amusements.”
How did the Court compare R.A. No. 7903 with other similar laws?	The Court compared R.A. No. 7903 with laws creating other economic zones like Subic and Cagayan, noting that those laws explicitly granted the authority to license gambling, while R.A. No. 7903 did not.
What was the role of the Office of the President’s opinion?	The Office of the President’s opinion supported PAGCOR’s interpretation, and the Court gave deference to this opinion under the doctrine of respect for administrative construction.
What are the practical implications of this ruling?	The ruling clarifies that economic zones need explicit legal authorization to regulate gambling, reinforcing PAGCOR’s central role in overseeing gaming activities in the Philippines.
What does this case say about interpreting laws related to economic zones?	The case highlights the importance of clear and precise language in legislative enactments that define the powers and authority of government entities in economic zones.

In conclusion, this decision affirms the principle that statutory authority must be explicitly granted and cannot be inferred from general terms. The Supreme Court’s ruling ensures that the regulation of gambling activities remains centralized under PAGCOR, promoting consistency and accountability in the gaming industry.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: PAGCOR vs. PEJI, G.R. No. 177333, April 24, 2009