In 2005, President Gloria Macapagal-Arroyo tasked the PCSO to help in the campaign to stamp out jueteng and to democratize charity at the national and local levels by introducing an alternative – the Small Town Lottery or STL. The PCSO Board of Directors approved a resolution calling for a test run of the S-T-L on December 28, 2005. Resolution No. 464 likewise, effected the approval of the rules and regulations governing the conduct of STL in select pilot areas in Luzon.
The new STL is a democratized form of the grassroots-based lottery and charity first introduced during the time of President Corazon Aquino. Incorporating the lessons learned from the first STL, the new, reinforced STL was launched in mid-February 2006 under a test-run mode. This experimental feature of the new STL gives it the flexibility to institute needed changes during its test-run phase. It is a feature that was absent during the first STL.
By operating under a test-run mode for a period of one (1) year, the PCSO was able to adopt changes needed to make the game effective as a local governments-based charity mechanism for PCSO, even as the new STL provided livelihood for those displaced by President Gloria Macapagal-Arroyo’s anti-jueteng campaign.
The PCSO executed contracts with private corporations for the test runs of STL, with the understanding that a contract can be revoked if a corporation violated any of the provisions in its approved contract.
In late March 2006, the National Police Commission, in coordination with PCSO, released guidelines for STL operations to policemen. Under the guidelines, police cannot arrest anybody authorized by the PCSO to operate the STL except if there are complaints from the PCSO, local government officials, religious groups, and non-government organizations. Arrests can also be conducted when operators violate Republic Act 9287 or the anti-illegal gambling act.
Under the STL charity fund sharing scheme, revenues accruing to STL will be divided as follows: city or municipality, 10 percent; provincial government, 5 percent; congressional district, 2.5 percent; and PNP, 5 percent. To effectively decentralize the use of charity funds, the proceeds of STL will directly reach the local government units. It will go to the municipal treasurer’s office. PCSO executed memorandum of agreements (MOAs) with local government units on how to disburse the funds given to them via STL. The remaining 7.5 percent of the charity fund will go to PCSO.
Implementing the STL has allowed PCSO to provide immediate and localized funding assistance for health and developmental projects in various localities.
By end of 2007, PCSO has launched the STL in 15 approved test run areas. These include: Quezon province, Angeles City, Bataan, Occidental Mindoro, Pampanga, Laguna, Bulacan, Negros Oriental, Iloilo City, Tarlac, Oriental Mindoro, Ilocos Norte, Albay, Olongapo City, Batangas.
During its first year of operations (2006-2007), STL generated revenues totaling to more than P3B, creating about 62,500 jobs and livelihood for displaced cabos and cobradores, as well as for the organic staff of the agent-corporations.
To date, the PCSO temporarily stopped processing new applications for Small Town Lottery (STL) agency pending a comprehensive review of the project. The PCSO Board of Directors approved a recommendation of its Technical Working Group, which suggested that the agency wrap up first its assessment of the STL dry-run before accepting new applications from gaming proponents.
“The comprehensive review of the STL is being undertaken for the purpose of putting in place all the necessary features to make its operations as transparent, honest and credible as the lotto. PCSO may resume accepting applications after finishing its assessment of STL, depending on overall findings after the evaluation” explained PCSO General Manager Rosario C. Uriarte.