REGULATORY FRAMEWORK FOR THE ACCREDITATION OF GAMING SYSTEM

SERVICE PROVIDERS FOR ELECTRONIC GAMES, ELECTRONIC BINGO, AND

SPORTS BETTING

This framework shall govern the accreditation of Electronic Games, Electronic Bingo,
and Sports Betting Service Providers.

Operators may avail of the services of a Service Provider who shall provide the
electronic gaming/electronic bingo gaming/electronic sports betting technology along
with its gaming/betting systems and game contents that shall be utilized at the gaming
sites.

By virtue of the foregoing, the following are laid down as the Regulatory Framework
for the accreditation of Gaming System Service Providers:

I. GENERAL PROVISIONS

1. Service Provider is the entity accredited by PAGCOR to provide the necessary

gaming service and/or game offering to PAGCOR-licensed gaming sites for a
specific gaming activity.

2. Operator on the other hand is the entity duly licensed by PAGCOR to conduct
gaming activities through the use of the technology and game offering as provided
by a particular Service Provider.

3. Gaming Activity refers to conduct of any gaming operations regulated and

sanctioned by PAGCOR, i.e. electronic gaming, sports betting, or electronic bingo
gaming.

Accreditation of Service Providers for the above mentioned gaming activities shall
be given independently and separately. In other words, separate accreditation shall
be given to a Service Provider for each gaming activity.

4. Gaming System refers to the technology or the combination of various related

software, servers and database/s, communications technology, and other
proprietary hardware and software specifically designed or modified for, and
intended for use in the conduct of gaming.

A gaming system may either be for Electronic Gaming, for Electronic Bingo, or for
Sports Betting. These gaming systems include the Service Provider’s Remote
Gaming Platforms.

5. Game Offering refers to the brand of gaming service and/or suite of games offered
by an accredited Service Provider duly recognized and approved by PAGCOR for
the corresponding gaming activity under which the former was accredited for.

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6. By virtue of the accreditation of PAGCOR, Service Providers are tasked, among
others, to execute the following:

a. Provision and maintenance of an Electronic Gaming/Electronic

Bingo/Sports Betting System;
b. Provision and maintenance of Electronic Games/Electronic Bingo
Games/Sports Betting Games;
c. Provision of 24/7 Technical Support;
d. Provision of Marketing and Customer Account Management
Services; and
e. Provision of Training Services for Front-Line Staff

7. The accreditation contractually binds the Service Provider to deliver to the

Operators, on behalf of PAGCOR, all of the above required services, and any other
services that PAGCOR may deem appropriate later on.

8. Operators shall procure gaming system and equipment and other gaming
paraphernalia only from Accredited Service Providers.

9. The Service Provider’s Gaming System shall not accept bets emanating outside
the Philippines and shall not be accessible in any way whatsoever outside the
Philippines.

10. The Service Provider’s Remote Gaming Platform, if developed, shall comply with
the Regulatory Framework for the Remote Gaming Platform.

II. ACCREDITATION OF SERVICE PROVIDERS

1. Only corporations duly registered with the Securities and Exchange Commission
(SEC) may apply for accreditation as a Service Provider either for Electronic
Games, for Electronic Bingo, or for Sports Betting.

2. The Applicant must possess PAGCOR’s probity standards for Service Provider and
comply with all documentary and system requirements.

3. The E-Games/E-Bingo Licensing Department (EGEBLD) shall process all

applications for accreditation as a Service Provider. Only applications with
complete requirements shall be considered received. Applications with incomplete
details and/or requirements shall be returned to the Applicant which shall resubmit
the same after duly addressing all insufficiencies.

4. The Applicant shall submit the duly filled-out Application Form for Service Provider
Accreditation together with the following requirements:

A. Company-related requirements:

i. Company profile;
ii. Detailed location sketch of company office;

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 iii. Copy of Registration Certificate from Securities and Exchange
Commission (SEC) with required capitalization of 50 Million Pesos
authorized capital stock and 12.5 Million Pesos paid-up capital; iv.
Articles of Incorporation, By-laws duly approved by the SEC;
v. Latest General Information Sheet (GIS) duly filed with SEC
vi. Photocopy of the following documents:

a. Mayor’s Permit/Business Permit/Municipal License for the relevant

gaming activities from the location of the company office;
b. BIR Registration Certificate;

B. Submission of an original bank certification with a minimum of Twenty-Five

Million Pesos (P25,000,000.00);

C. Payment of the non-refundable PhP2.5 Million Accreditation Fee;

D. Has the capability to provide the services (outlined in Item III below) and
electronic gaming equipment and paraphernalia, if need be, that are in
accordance with PAGCOR’s prescribed standards; and

E. Provide servers for the Gaming System that are either located physically in a
Tier 1 Data Center within the Philippines or via cloud computing services.

5. Once the Application is evaluated as compliant with the above requirements, the
PAGCOR Inspection Team shall conduct an ocular site inspection of the facility
and testing of the Service Provider’s gaming platform/system and games, player
registration, income reporting, among others, to determine capability and readiness
of the Gaming System to fulfill gaming services.

6. The Application shall only be recommended to the Board of Directors for approval
upon compliance with the following:

a) Submission of complete documentary requirements;

b) Payment of the non-refundable PhP2.5 Million Accreditation Fee;
c) Satisfactory results of ocular inspection of the Service Provider’s facility and
actual testing of Gaming System; and
d) Compliance with the prescribed probity requirements.

7. Once the Application is approved, the Service Provider shall post to PAGCOR the
required cash bond of Twenty-Five Million Pesos (P25,000,000.00). Once
compliant with all pre-commencement requirements, EGEBLD shall then issue a
Notice to Commence Gaming Operations in which case the Service Provider may
now offer its services to PAGCOR’s licensees for Electronic Games, Electronic
Bingo, and Sports Betting.

III. SCOPE OF SERVICES

The Service Provider must fulfill all of the following:

1. Provision and Maintenance of a Gaming System:

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 a. The Service Provider must:

i. Provide the necessary hardware, system security resources. and hosting

facilities required to operate the Gaming System, such as but not limited to
routers, servers, hubbing equipment, power supply systems, encryption
software and other requirements;
ii. Update and improve the hardware/software components of the Gaming
System from time to time. The Service Provider shall request PAGCOR’s
prior approval for any update or improvement of the hardware/software
components. The specific changes to be done and their corresponding use
and/or impact shall be documented. iii. Conduct preventive maintenance at
least twice a year on the hardware equipment, communication systems and
its adjuncts. A post-activity report shall be submitted to PAGCOR. iv. Design,
develop, test, provide, implement and monitor the integrity and security of
the Gaming System, which shall include all data collection and reporting
capabilities specified by PAGCOR.
v. Take all reasonable measures to ensure that Gaming System software is
free of defects, where any losses and/or damages resulting therefrom shall
be shouldered by the Service Provider.
vi. Shoulder the cost of all software license fees, if any.
vii. Provide website hosting, domain name registration and maintenance,
internet connectivity and interconnectivity between the Service Provider and
Operators.
viii. Update and improve the software components of the Gaming System from
time to time. The Service Provider shall request PAGCOR’s prior approval
for any update or improvement of the software. The specific changes to be
done and their corresponding use and/or impact shall be documented. ix.
Conduct preventive maintenance of the software and its adjuncts.
x. Be solely responsible for any action or suit brought about by any third party
for violation of such party’s intellectual property rights

b. Required Capabilities of the Gaming System

i. Data Collection/Reporting Capabilities, pertaining to the Gaming System

1. The Gaming System must be able to extract data from licensed

operators and generate reports specified by PAGCOR on demand or for
the interval defined for each required report.
2. All required reports must be generated by the system, even if the period
specified contain no data to be presented.
3. The report generated shall indicate all required information and contain
an indication of “No Activity” or similar message if no data appears for
the period specified.
4. The Gaming System must provide a mechanism to export the data
generated for any report to an acceptable format (i.e. PDF, CSV, etc.)
as specified by PAGCOR for purposes of data analysis and
auditing/verification.
5. The system must be capable of retaining the report data for a period of
time as specified by PAGCOR. The Gaming System Clock must be used
for all time stamping.

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 6. The Gaming System must have the ability to restore the system from the
last back up in case of failure or shutdown.
7. The Gaming System must be able to recover all critical information from
the time of the last back up to the point in time at which the Gaming
System failure or shutdown occurred.
8. The Gaming System must be able to retrieve all critical information from
time of failure or shutdown to the point in time at which the Gaming
System was re-started.

ii. Player Registration – the Gaming System must be able to collect/store player
information as defined/directed by the existing Gaming Site Regulatory
Manual.

1. The Gaming System must be able to collect player session information.

2. The Gaming System must be able to administratively exclude players
upon order of PAGCOR.
3. The Gaming System must be capable of applying regulatory limits set by
PAGCOR either to individual Players, a class of Players, a class of
Operators, or a class of Games.
4. The administrative-exclusion method must be such that upon exclusion,
no bets or deposits can be made by the Player. Notwithstanding such,
the system may allow to withdraw funds during the period of
administrative-exclusion.
5. The Gaming System must be able to disable or enable all gaming on
command.
6. The Gaming System must be able to disable or enable individual games
on command.
7. The Gaming System must be able to disable or enable individual player
session on command.
8. A player account is considered inactive if the player has not logged into
the account for a period specified by PAGCOR.

iii. Player Activity

1. The Gaming System must be able to collect and maintain records for all
player deposits, withdrawals, transfers, and adjustments.
2. The Gaming System must be able to collect and maintain records for all
player winnings, payouts and bonuses.

iv. Reporting

1. The Gaming System must be able to provide reports for analytical

purposes.

2. The Gaming System with respect to player accounts must be capable of

generating the following reports:

a. Active player accounts;

b. Inactive player accounts including reasons for deactivation;
c. Accounts which the player has self-exclusion;
d. Accounts for which the player has administrative inclusion; and

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 e. Other player account information that may be required by PAGCOR.

3. The Gaming System with respect to games must be capable of

generating the following reports:

a. Information on the games hosted on the servers;

b. Performance of game titles; and
c. Other game information that may be required by PAGCOR.

v. Audit

1. The Gaming System must be able to provide records pertaining to

Electronic Games operations for purposes of audit.
2. The Gaming System must be capable of integration with PAGCOR’s
Third Party Audit Platform

2. Provision and maintenance of gaming system/platform and its game contents:

a. A Service Provider’s Gaming System/Platform must meet all requirements

outlined in the applicable Regulations of the corresponding Gaming Site
Regulatory Manual.

3. Provision of 24/7 Technical Support:

a. The Service Provider must have the facility to provide 24/7 technical support to
the Operators.

i. First level support: Phone and Email

ii. Second-level support: Field Technicians to go on-site to resolve technical
matters.

b. The Service Provider must have facility to provide 24/7 customer service to
players through a live, call center.

i. The Service Provider’s Call Center must have a ticketing system to

facilitate tracking and resolution of player complaints and disputes.

4. Provision of Marketing and Customer Account Management Services:

a. The Service Provider must allocate resources to grow the Business through:

i. An Operator Account Management Team to assist Operators in efforts to

increase membership and activity.
ii. Conduct and assist in various retention and rewards activities directed to
Customers.

b. The Service Provider’s Marketing Activities must conform to all Membership,

Marketing and Responsible Gaming Regulations as outlined in the Gaming Site
Regulatory Manual.

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5. Provision of Training Services for Front-Line Staff:

a. The Service Provider must allocate dedicated training resources for the frontline
staff of Operators.

IV. MONETARY OBLIGATIONS

As PAGCOR Share, Operators shall remit, based on the schedule as imposed by the
Compliance Monitoring and Enforcement Department (CMED), the following:

1. For Electronic Bingo Games – 55% of Gross Gaming Revenue (GGR)

2. For Electronic Games – 47.50% of GGR

3. For Sports Betting, as follows:

Period Covered PAGCOR Share* Monthly MGF

For Live Sports using bookmaking in

determining payoff odds - 25.00% of
GGR PhP500,000.00 plus
PhP50,000.00 per
First Year For Live Sports using methods of additional approved site
determining payoff odds other than
bookmaking (e.g. pari-mutuel) - At
beyond ten (10) sites.
least 25.00% of GGR or the sharing
percentage as may be approved by
PAGCOR, whichever is higher.
Additional
Succeeding years For Virtual Sports - 47.50% of GGR PhP500,000.00 per year
up to Year 5

*In the event that the sum remittance of all client Operators falls below the
above aggregated monthly MGF, the concerned SB Service Provider shall be
under obligation to remit to PAGCOR the difference between the total monthly
remittances and the applicable monthly MGF.

V. MULTIPLE ACCREDITATION

In the event that an entity applied and was accredited as a Service Provider in multiple
or in all of the above-mentioned gaming activities, the following conditions shall apply:

1. The Service Provider may develop and implement a unified or single remote
gaming platform to host these gaming activities. Provided that:

a. The Service Provider may only contract Operators who are qualified to host
these gaming activities in their gaming site operations, as partners; or

b. The Service Provider may implement a functionality in its unified gaming

platform such that its partner-Operators and respective registered players may

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 only be given the permission to access the gaming console the latter are
qualified with.

2. Notwithstanding the above, the unified gaming platform may implement a single
player account and wallet or separate accounts and wallets for each gaming
activity.

3. PAGCOR Share as stated in Item IV above shall still be imposed individually per
gaming activity.

VI. MISCELLANEOUS PROVISIONS

1. Any misrepresentation, breach and/or circumvention, directly or indirectly, of any

of the conditions/requirements set in this regulatory framework, any other relevant
communication or memorandum issued by PAGCOR, and/or any law, local or
national, of the Philippines shall be sufficient ground for the immediate blacklisting
of the erring Service Provider and shall be cause for the imposition of suspension,
penalties, and revocation, as approved by PAGCOR management.

2. The above are general provisions regulating PAGCOR’s Accredited Service

Providers which are still subject to continuous review and to changes, revisions,
modifications, or amendments from time to time, as the case may be.

3. Finally, this regulatory framework shall repeal previous issuances the independent
provisions of which are inconsistent with the same.

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