Gambling disguised as ‘text’ games
The Philippine Star
08/25/2003

Filipinos’ penchant for "texting" has opened new innovative opportunities for Globe Telecoms and Smart Communications, the country’s two largest telecommunications firms, to earn more money.

By keying pre-set numbers and letters, for example, one can get the hour’s breaking news or the real time traffic situation in almost any major Metro Manila thoroughfare. Many of these "texting" services – for a fee, of course – clearly provide value for money.

However, some "texting" schemes have permutated into forms that are not only unproductive but also equally annoying. In fact, "texting" in the Philippines has become an opportunity for text-based gaming, spam, and in some cases, gambling.

Games of chance via text messaging

Last year, the Philippine Amusement and Gaming Corp. (Pagcor) called the attention of both Globe and Smart for not securing proper permits after introducing raffle games via text messaging. Pagcor argued that since the raffle games were a form of gambling, these should fall under their wings.

A subsequent inquiry by the Lower House of the text games mechanics corroborated the view that since the telecommunication companies’ text games do not demand skill or ability, they should likewise be considered as games of chance.

Emboldened by these findings, Pagcor threatened to file a complaint against the two telcos for violating the law on illegal gambling through the conduct of games of chance using the cellular phone short message system (SMS) or "texting."

Pagcor cited about 50 text-based games, including Game K N B?, Weakest Link, Who Wants To Be A Millionaire, imGAME’s True or False, Trivia Trivia, Bible Answerman, Celebrity Secrets, MVP Challenge, Health is Wealth and Travel Quest.

Big stakes in text games

The two telcos, however, argued that their text games are for entertainment, advertising and promotional purposes, similar to raffles offered by other companies.

Cellular firms do not agree that text gaming is gambling, and therefore are rejecting Pagcor’s regulation bid. Furthermore, the two firms cite that the Department of Trade and Industry (DTI) and the National Telecommunications Commission (NTC) already regulate their services.

With a combined 13.6 million subscribers in the country, the traffic of text messaging in the Philippines – already dubbed as the world’s text capital – averages from eight to 10 million SMS a day, or about one billion text messages a month.

Game shows charge from P2 to P10 per text message, with revenues split by the telecom firm and the broadcast network. One radio station even charged P25 to P50 for each ring tone sent to interested listener subscribers. Indeed, the prospects of juicy profits are high for those venturing into text gaming.

Taking a slice of the booty

Which is why Pagcor is now eyeing a hefty 20 percent of the telcos’ gross revenues from text games plus regulatory fees from all companies involved in text-based game shows that offer prizes at stake and involve a wager of money and a random chance of winning.

Pagcor is insisting that the two cellular firms should submit the mechanics of their text games for the scrutiny of the gaming body. It has entered into a memorandum of agreement with various government agencies to jointly regulate text-based games and sales promotion.

Under the agreement, DTI will review all applications and mechanics of text-based sales promotions, Pagcor would approve text-based games or sales promotions that have wagering schemes such as chance and prize money, the Movie and Television Review and Classification Board would control advertisements of text-based sales promotions and games, and NTC would police major telcos in the transmission of text-based games and sales.

Weak legislation

This agreement in essence is a strong attempt to control current and future text-based promotions and games in view of the current weak regulatory framework over text-based gaming. With mounting complaints against cellular phone firms and their services, pressure is building up for the government to find the best way to respond to public grievances.

DTI admits that Consumer Act of 1992 is already outdated and urgently needs refinement to reflect recent changes in the digital age. The Consumer Act that empowered the DTI to address all consumer-related concerns failed to cover wireless and web-based technologies like cellular phones and the Internet.

‘Texting’ a boost or bane

The power of "texting" is clearly evident as it had been instrumental in unseating a duly elected president perceived as indulging in gambling and other morally questionable practices.

"Texting" also seems to be addicting. Observe how students sacrifice part of their allowance in order to reload their phone cards and pass on a joke or gossip. A telco is spending millions of pesos aggressively advertising and promoting this addictive feature.

And now, "texting" is extensively being used as a medium for games of chance or outright gambling. As millions of users are enticed to key in letters and numbers for a chance to win big prizes, money keeps on flowing into the telcos’ coffers.

What next will these telcos think of to keep this money-spinner going? And when will the millions of "addicted" users stop for a moment, look at the details in telco billings and realize that hundred of pesos could have been saved or spent on better things than "idle text" or "gambling text"?

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