Regulatory Framework for The Accreditation of Gaming System Service Providers for Electronic Games, Electronic Bingo, Sports Betting, and Specialty Games

PAGCOR

I-Gaming Licensing and Regulation Group E-Games Licensing Department

REGULATORY FRAMEWORK

FOR THE ACCREDITATION OF

GAMING SYSTEM SERVICE

PROVIDERS FOR

ELECTRONIC GAMESL

ELECTRONIC BINGO.SPORTS

BETTING.AND SPECIALTY

GAMES

Effectivity: Rev. No: 1 : s boao i o .m by the Board on May 25, 2023, shall conditions, table of offenses, as well as Accreditation of Gaming System Service remain in force and effect. Regulatory ProvidersforElectronicGames, Electronic Bingo, Sports Betting, and Specialty Games which was approved applicable penalties FrameworkforThe under the

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

electronic gaming/electronic bingo gaming/electronic sports betting/electronic Operators may avail of the services of a Service Provider who shall provide the

specialty gaming technology along with its gaming/betting systems and game contents that shall be utilized at the gaming sites.

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.

Every Operator shall be reguired to post a performance cash bond(PCD) per gaming activity it operates in its gaming sites in the amount as prescribed in the

framework. Gaming Site Regulatory Manuals (GSRM) or other applicable regulatory

By default, an Operator may offer and operate multiple game offerings simultaneously in its gaming site and any exclusivity contract between an Operator and a Service Provider shall not bind PAGCOR whatsoever.

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

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

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

intended for use in the conduct of gaming. proprietary hardware and software specifically designed or modified for, and software, servers and databasels,communications technologyand other

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

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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

The Service Provider shall be under the obligation to establish or contract at least thirty (30) gaming sites which shall offer and operate its approved game offering

For a newly accredited Service Provider or one which has yet to commence

prior to the commencement of its commercial operations, then at least ten (10) operations, it shall be required to establish or contract at least one (1) gaming site

gaming sites within twelve (12) months from the commencement date, and the required thirty (30) gaming sites within twenty-four (24) months from said date.

For an existing Service Provider which has already commenced operations, it shall be reguired to establish or contract at least ten (10) gaming sites on or before 31 December 2023 and to complete the required thirty (30) gaming sites on or before 31 December 2024.

the amount of two-hundred thousand pesos (PhP200,000.00) per lacking gaming Noncompliance with the above shall be ground for the imposition of penalties in site per month or any fraction thereof

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/Specialty Gaming System; b Provision and maintenance of Electronic Games/Electronic Bingo

C. Provision of 24/7 Technical Support; Games/Sports Betting/Specialty Games;

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

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

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.

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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

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,for Sports Betting,or for Specialty Games

2. The Applicant must possess PAGCOR's probity standards for Service Providers

and comply with all documentary and system requirements.

3.TheE-Games/E-Bingo LicensingDepartmentEGLDshall process all

applications for accreditation as a Service Provider. Only applications with complete requirements shall be considered received. Applications with incomplete details andlor 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:

4 Company-related requirements: I. N Company profile; Detailed location sketch of company office;

iN N I Latest General Information Sheet (GIS) duly filed with SEC; Articles of incorporation, By-laws duly approved by the SEC; Copy of Registration Certificate from Securities and Exchange authorized capital stock and 25 Million Pesos paid-up capital; Commission (SEC) with required capitalization of 100 Million Pesos

Vi a. Mayor's Permit/Business Permit/Municipal License for the relevant Photocopy of the following documents:

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

B. Submission of an original bank certification with a minimum of Fifty Million

Pesos (P50,000,000.00);

C. Payment of the non-refundable PhP5 Million Accreditation Fee for each gaming activity;

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

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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 reguirements;

b) Payment of the non-refundable PhP5 Million Accreditation Fee for

C each gaming activity; 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.

Once the Application is approved, the Service Provider shall post to PAGCOR its services to PAGCOR's licensees for Electronic Games, Electronic Bingo, the required cash bond of Fifty Million Pesos (P50,000,000.00).Once compliant with all pre-commencement requirements, EGLD shall then issue a Notice to Commence Gaming Operations in which case the Service Provider may now offer Sports Betting, and Specialty Games.

II SCOPE OFSERVICES

The Service Provider must fulfill all of the following:

1. Provision and Maintenance of a Gaming System:

a. The Service Provider must:

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.

I Update and improve the hardware/software components of the Gaming

System from time to time. The Service Provider shall request PAGCOR's

components. The specific changes to be done and their corresponding use and/or impact shall be documented. prior approval for any update or improvement of the hardware/software

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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

shall be shouldered by the Service Provider. is free of defects, where any losses and/or damages resulting therefrom

Vi. Shoulder the cost of all software license fees, if any.

Vi. Provide website hosting, domain name registration and maintenance,

internet connectivity and interconnectivity between the Service Provider and Operators.

Vii. Update and improve the software components of the Gaming System from

be done and their corresponding use and/or impact shall be documented. for any update or improvement of the software. The specific changes to time to time. The Service Provider shall request PAGCOR's prior approval

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.)

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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

used for all time stamping. time as specified by PAGCOR. The Gaming System Clock must be

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.

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

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.

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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 capablel

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 e. Other player account information that may be required by

PAGCOR.

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

a. Information on the games hosted on the servers; b.Performance of game titles; and of generating the following reports: C.E Other game information that may be required by PAGCOR.

V. Audit

1. The Gaming System must be able to provide records pertaining to gaming operations for purposes of audit.

2. The Gaming System must be capable of integration with PAGCOR's Platform Third Party Audit

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 Gaming Site Regulatory Manual.

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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

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

to facilitate tracking and resolution of player complaints and The Service Provider's Call Center must have a ticketing system

disputes.

4. Provision of Marketing and Customer Account Management Services

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

An Operator Account Management Team to assist Operators in efforts to increase membership and activity.

I 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.

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 OBLIGTIONS

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 55.00% of Gross Gaming Revenue (GGR)

2.For Electronic Games - 47.50% of GGR

3.For Sports Betting, as follows:

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Period Covered PAGCOR Share* Monthiy MGF

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

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

4.For Specialty Games - 15.00% of GGR plus Audit Fee (10.00% of PAGCOR Share

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 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.

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

3. Finally, this regulatory framework shall repeal previous issuances the independent

provisions of which are inconsistent with the same.

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