Pagcor overpaid rentals of two satellite casinos

CEBU, Philippines - The Philippine Amusement and Gaming Corporation in Cebu City has overpaid more than P3 million in rentals for its satellite casinos in Parkmall and Crown Regency.

The Commission on Audit has found out a total of P3.1 million overpayment made by the state-run gambling firm to the operators of the space it leased for satellite casinos.

In its annual audit report, State auditors said the lease contracts entered into by Pagcor officials and establishment operators show that even the areas exclusively occupied by the lessors for their own business interest have been included in the lease.

According to COA, the government stands to lose P10,074,732 in overpayment every year if the questionable transaction will continue.

Citing Article 2154 of the Civil Code which provides that no one shall enrich himself at another’s expense, the state auditors said the lessee of a property in a lease contract is only obliged to pay the areas he occupies for his own use.

COA said when its technical personnel inspected the Pagcor’s leased premises at Parkmall in Barangay Subangdaku, Mandaue City and Crown Regency along Osmeña Boulevard, it was found that the leased spaces include areas commonly used by the Pagcor and of the establishment.

Worst, the COA technical personnel found out that the spaces that are used exclusively by the lessors for their business interests were included in the lease.

The record shows that Pagcor is leasing 3,016 square meters of space in Parkmall for its satellite gambling casino operation, but it was found out that it exceeded 67.11 square meters that covers the ground and second floor kitchen managed by the building owner.

In Crown Regency, the record also shows that Pagcor is leasing 2,518 square meters of space, but it was found out that the 442.5 square meters of space covers the common area used by the hotel.

State auditors said that a total of P3,124,855 excess rentals was paid by the government as of December 31, 2011.

According to COA, the excess monthly rentals in Parkmall is P87,243 or P1,086,316 while for Crown Regency is P752,318 every month. Pagcor only paid P2,038,539 excess payment to Crown Regency because the lease only started June 3, 2011 up to December 31.

COA has recommended a renegotiation of the lease contract to adjust the monthly rentals.

The allocation of the rental for the common-use areas will be on an equal sharing basis, COA said.

The state auditors also recommended that Pagcor should ask for the refund of the P3,124,855 that was overpaid, which may be made through deductions from future rentals.

Pagcor officials have already sent letters to Parkmall and Crown Regency managements asking them to refund the overpayment. (FREEMAN)