Republic Act No. 11649

Subject to the provisions of the Constitution and applicable laws, rules and regulations, there is hereby granted to the Hapi Jockey Club, Inc., hereunder referred to as the Grantee, its successors or assignees, a franchise to construct, operate, and maintain a race assignees, a franchise to construct, operate and maintain race track within the provinces of Batangas, Laguna, and Cavite, establish branches hereof for booking purposes anywhere in the country, hold or conduct horse races with betting on results of such races directly or by means of mechanical, electrical, or computerized totalizator, and do and carry out all such acts, deeds, and things as may be necessary to give effect to the foregoing.

The races to be conductedby the Grantee shall be under the supervision and regulation of the Philippine Racing Commission (PHILRACOM), which shall enforce the laws, rules and regulations governing horse racing, including the framing and scheduling of races, the construction and safety racetracks, the allocation of prizes for winning horses, and the security of racing as provided in Presidential Decree No. 420, otherwise known as "Creating the Philippine Racing Commission", as amended:Provided,That the Games and Amusements Board (GAB) shall continue to supervise and regulate betting in horse races as provided in Sections 6, 11, 15, 18, and 24 of Republic Act No. 309, otherwise known as "An Act to Regulate Horse-Racing in the Philippines", as amended.

The Grantee or its duly authorized agency may offer, take or arrange bets for racfes conducted in or outside the Philippines, in person or by any electronic or other means of processing transactions, anywhere in the Philippines, whether within or outside the place, enclosure, or track where horse races are held, in on-track or off-track betting stations, a day in advance of and/or during schedule races held or conducted within or outside the Philippines. No other entity or person other than the Grantee or its duly authorized agents or licensees shall offer, take or arrange bets on any horse participating in any race conducted by the same, or maintain or use a totalizator or other device, method or system to bet on any horse within its premises or outside the place, enclosure or track in the course of horse races conducted or operated by the Grantee.

Any person or persons found to have violated the provisions of the preceding section shall be punished by a fine of not less than Twenty thousand pesos (P20,000.00) but not more than One hundred thousand pesos (P100,000.00) or by imprisonment of not more than six (6) months, or both, at the discretion of the court. If the offender is a partnership, corporation, or association, the criminal liability shall devolve upon its president, managing partner or manager responsible for the violation.

The Grantee is hereby authorized to do and carry out all such acts, deeds and things as may be necessary for the effective conduct of the business granted under this franchise in an orderly, clean and honest manner, and, in particular, to provide and operate any mechanical, electrical, electronic or computerized devices, equipment and facilities, including the following:

In case of the Grantee's failure to provide and install any of the aforementioned equipment or facilities within three-year period, the PHILRACOM shall forthwith suspend and prohibit the holding of races until such time as the equipment or facilities are provided and installed.

The GAB shall assign its auditors and inspectors to supervise and regulate the placing of bets, the proper computation of dividends and the distribution of wager funds.

The Grantee shall publish and display prominently and in appropriate places the terms and conditions regarding the sale of betting tickets.

The total wager funds or gross receipts from the sale of betting tickets will be appropriated as follows:

The receipts from betting corresponding to the fractions of less than Ten centavos (P0.10) eliminated from the dividends paid to the winning tickets, commonly known as breakage, shall be set aside as follows:

The provision of any existing law to the contrary notwithstanding, the Grantee is hereby authorized to hold horse races on at least two (2) days during the week as may be determined by the PHILRACOM, and on all Saturdays, Sundays and official holidays of the year, except on those official holidays where the law expressly provides that no horse races are to be held. The Grantee may also conduct races on the eve of any public holiday to start not earlier than five-thirty in the afternoon, but not exceed five (5) days a year.

The Grantee shall allocate racing days pursuant to the provisions of Republic Act No. 309, as amended.

The provision of existing laws to the contrary notwithstanding, the following taxes shall be imposed:

This franchise shall be in effect for a period of twenty-five (25) years from the date of the effectivity of this Act, unless sooner cancelled. This franchise shall be deemedipso factorevoked in the event that the Grantee fails to comply with any of the following conditions:

The Grantee shall hold the national, provincial, city and municipal governments of the Philippines free from all claims, liabilities, demands, or actions arising out of accidents causing injury to persons or damage to properties, during the construction or operation of the racetrack of the Grantee.

The Grantee shall not sell ,lease, transfer, grant the usufruct of, nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity, nor merge with any other corporation or entity, nor the controlling interest of the Grantee be transferred, simultaneously or contemporaneously, to any person, firm, company, corporation, or entity without prior approval of Congress. The Grantee shall inform Congress of any sale, lease, transfer, grant of usufruct, or assignment of franchise or the rights and privileges acquired thereunder, or of the merger or transfer of the controlling interest of the Grantee, within sixty (60) days after the completion of the said transaction. Failure to report to Congress such change of ownership shall render the franchiseipso factorevoked. Any person or entity to which this franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of this Act.

The Grantee shall offer at least thirty percent (30%) of its outstanding capital stocks, or a higher percentage that may hereafter be provided by law, in any securities exchange in the Philippines within five (5) years from the effectivity of this Act:Provided,That in cases where public offer of shares is not applicable, other methods of encouraging public participation by citizens and corporations must be implemented. Noncompliance therewith shall render the franchiseipso factorevoked.

The Grantee shall submit an annual report to the Congress of the Philippines, through the Committee on Legislative Franchise of the House of Representatives and the Committee on Public Services of the Senate, on its compliance with the terms and conditions of the franchise and on its operations on or before April 30 of every year during the term of its franchise.

The annual report shall include an update on the roll-out, development, operation or expansion of business; audited financial statements; latest General Information Sheet officially submitted to the Securities and Exchange Commission, if applicable; and certification of the PHILRACOM and the GAB on the status of its permits and operations.

The reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the PHILRACOM and the GAB.

Fine, -Failure of the Grantee to submit the requisite annual report to Congress shall be penalized by a fine of Five hundred pesos (500.00) per working day of noncompliance. The fine shall be collected by the PHILRACOM from the delinquent franchise Grantee separate from the reportorial penalties imposed by the PHILRACOM, if any, and the same shall be remitted to the Bureau of Treasury.

Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or which may hereafter be granted for horse racing, upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the herein Grantee:Provided,That the foregoing shall neither apply to nor affect the provisions of horse racing franchise concerning territorial coverage, the term, or the type of service authorized by the franchise.

This franchise shall be subject to amendments, alteration, or repeal by Congress when the public interest so requires and shall not be interpreted as an exclusive part of the privileges herein provided for.

If any of the sections or provisions of this Act is held invalid, all other provisions not affected thereby shall remain valid.

All laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances or parts thereof which are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

This Act shall take effect fifteen (15) days after its publication in theOfficial Gazetteor in a newspaper of general circulation.

Approved,

| (SGD.)VICENTE C. SOTTO III President of the Senate | (SGD.)LORD ALLAN JAY Q. VELASCO Speaker of the House of Representatives |