PAGCOR Showroom Inventory Monitoring: Rules for Gaming Equipment

How PAGCOR monitors gaming equipment inventory in showrooms

Gaming equipment and gaming paraphernalia stored in an authorized storage area or showroom must be covered by a valid Permit to Hold (PTH). Under PAGCOR's Implementing Rules and Guidelines for the Monitoring of Inventory of Gaming Equipment and Gaming Paraphernalia Stored in Authorized Area/Showroom of GLDD-Enrolled Suppliers (effective September 7, 2023), the enrolled supplier must keep complete inventory records, shipment forms, and commercial invoices on file, and must submit a Quarterly Log Report (GLDD-1017) and an Annual Inventory Log Report (GLDD-1018). A PAGCOR Inspection Team may conduct spot inspections to confirm that reports match the actual inventory.

Who must comply and what the rules cover

The rules apply to GLDD-enrolled suppliers — suppliers to whom PAGCOR has granted a Certificate of Enrollment — that store gaming equipment or gaming paraphernalia in an authorized storage area or showroom.

Under the Suppliers Regulatory Manual (SRM), a "showroom" is the venue where an enrolled Supplier may display its gaming equipment and/or gaming paraphernalia to prospective clients. "Items in Display" refers to all gaming equipment and/or gaming paraphernalia on display or showcased within the showroom.

The SRM's stated objectives include tracking gaming equipment and paraphernalia imported into the Philippines, monitoring supplier warehouses, maintaining a registry of current suppliers, and enrolling suppliers. Possession of gaming equipment and paraphernalia in the Philippines is prohibited unless authorized by PAGCOR.

The inventory record: real-time data and proof of every movement

The IRG requires the supplier to maintain a real-time inventory — any form of inventory management is allowed, provided it can produce up-to-date data and full control and monitoring of the movements of all items under its Permit to Hold.

Every data entry in the inventory record must have a corresponding GLDD form attached as proof of the transaction or movement:

• From importation to the authorized storage facility/showroom: Supplier's Shipment Clearance Request and Approval Form (GLDD-1013), Commercial Invoice, Shipment/Shipout Processing Fee Payment Form (1202), Official Receipt, and PTH.
• From a gaming establishment to the storage facility and vice versa; and from the storage facility to the showroom: Pull-out and Transfer of Gaming Equipment and/or Gaming Paraphernalia Notification Form (GLDD-1014) and the PTH.
• From the storage facility/showroom to the port of exit: Ship-out Clearance Request and Approval Form (GLDD-1015), Commercial Invoice, Shipment/Shipout Processing Fee Payment Form (1202), and Official Receipt.
• From one storage facility to another: Pull-out and Transfer Notification Form (GLDD-1014) and the PTH.

Inventory records must be made available upon request of the Inspection Team, which has full discretion over the inventory coverage and covered period. The Inspection Team is composed of representatives from the Compliance Monitoring and Enforcement Department (CMED) together with the Gaming Licensing and Development Department (GLDD).

Reportorial deadlines suppliers must meet

Under Regulation 3, Section 4 of the SRM, reports are submitted to GLDD on a per-site basis:

• Quarterly Log Report (GLDD-1017) — covering equipment imported or shipped during the previous quarter, pulled out from gaming establishments and transferred to the storage facility, exported or shipped out to its point of origin, and transferred to gaming establishments. Due on or before the 10th day of the month following each calendar quarter (i.e., April, July, and October).
• Annual Inventory Log Report (GLDD-1018) — listing all approved gaming equipment and paraphernalia currently stored in the storage facility, including date of storage, PAGCOR inventory tag number (when applicable), type of gaming equipment, manufacturer, manufacturer's serial number, game name/theme and quantity, date the device was last modified, and the location where it was last installed. Due on or before the 10th day of January each year.

Transfers and showroom movements

The supplier must still use GLDD Form No. 1014 for every transfer of gaming equipment and/or gaming paraphernalia from the supplier's storage facility to a gaming establishment (such as gaming sites under EG/EBLD, PAGCOR-operated casinos under TGD, VIP Clubs under SMD, and licensed casinos), to another storage facility, or vice versa.

A transfer from any gaming establishment to the supplier's storage facility or vice versa no longer requires a Permit to Hold, provided the current PTH is still valid and not due for renewal, the items are completely and accurately documented in the inventory records, and the supplier dutifully complies with the reportorial requirements covering the movement.

The GLDD-1014 notification must be filed at least two (2) business days before the intended date of movement.

Penalties for unauthorized or illegal possession

Gaming equipment and paraphernalia stored in an authorized storage area or showroom without a valid Permit to Hold is unauthorized and deemed illegal. The following are considered unauthorized or illegal acts: holding inventory with no PTH; with an expired PTH; with an invalid PTH (for example, wrong input of serial number or PAGCOR tag, or a tampered PTH); and other offenses determined by GLDD, classified as serious (such as misrepresentation in a PTH application or falsification of documents) or minor (non-compliance with the IRG, such as incomplete or non-submission of documents, or failure to provide access to inventory records).

After due notice and evaluation, GLDD imposes administrative penalties. For a no PTH violation, the penalty is P100,000 for the first offense, P200,000 for the second, and P300,000 for the third. For an expired PTH, the penalty is P50,000, P100,000, and P150,000 for the first to third offenses, respectively. For an invalid PTH, it is P25,000, P50,000, and P75,000. Serious offenses carry P100,000, P200,000, and P300,000; minor offenses carry a written reprimand, P15,000, and P30,000. On the fourth offense, GLDD may cause the delisting of the erring supplier from the list of GLDD-enrolled suppliers.

Frequently asked questions

How often must a PAGCOR supplier submit inventory reports? Two reports are required on a per-site basis: the Quarterly Log Report (GLDD-1017), due on or before the 10th day of the month following each calendar quarter, and the Annual Inventory Log Report (GLDD-1018), due on or before the 10th day of January each year.

Can PAGCOR inspect a showroom without prior notice? Yes. The PAGCOR Inspection Team may conduct spot inspection of the inventory in the authorized storage area or showroom to confirm data accuracy and reconcile reports with the actual inventory.

What happens if gaming equipment in a showroom has no valid Permit to Hold? The equipment is considered unauthorized and illegal, and GLDD may impose administrative penalties after due notice and evaluation — starting at P100,000 for a first offense of holding without a PTH.

Practical takeaways

• Maintain a real-time inventory of every item under your Permit to Hold, with the corresponding GLDD form attached to each recorded movement.
• File the Quarterly Log Report (GLDD-1017) and Annual Inventory Log Report (GLDD-1018) on time and on a per-site basis.
• Use GLDD-1014 for every transfer and file it at least two business days before the movement.
• Keep the Permit to Hold valid — expired, invalid, or missing PTHs trigger graduated fines and possible delisting on a fourth offense.
• Make inventory records available to the Inspection Team on request; the team decides the coverage and period of the inventory.

Primary sources

The rules discussed above are drawn from the following PAGCOR issuances, embedded here in full for your reference.

Supplier Regulatory ManualOpen in Law LibraryDownload PDF

Implementing Rules and Guidelines for the Monitoring of Inventory of Gaming Equipment and Gaming Paraphernalia Stored in Authorized Area/Showroom of GLDD-Enrolled SuppliersOpen in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.