PAGCOR Demands AI-Ready Gaming Regulations to Combat Sophisticated Fraud

The landscape of online gaming is facing a technological turning point that presents both regulatory bodies and operators with entirely new challenges. In the Philippines, the state regulator, the Philippine Amusement and Gaming Corporation (PAGCOR), has officially raised the alarm. Artificial Intelligence (AI) is evolving so rapidly that existing legal frameworks can no longer keep pace. It is a classic arms race: while authorities use AI for oversight, criminals utilize the same technology to mask fraudulent activities.

Jessa Mariz Fernandez, Assistant Vice President of PAGCOR’s Electronic Gaming Licensing Department, highlighted the urgency of the situation during her keynote speech at the CiG iDEA Summit in Manila on Monday, September 14, 2026. She made it clear that resisting technology is not an option for regulators. Instead, regulatory frameworks must grow in parallel with technology to seize new opportunities and effectively mitigate the associated risks. The future of the sector will largely depend on how accurately algorithms can distinguish between legal gaming enjoyment and manipulative fraud.

“The challenge for regulators is not to resist technology. Instead, regulatory frameworks must develop alongside it to address the opportunities and risks created by AI.” - Jessa Mariz Fernandez, Assistant Vice President at PAGCOR

Numbers and facts

PAGCOR views AI as a powerful tool to stabilize Gross Gaming Revenue (GGR) within a secure environment. Automated systems can significantly speed up compliance processes. Fernandez emphasized that AI can help identify unusual activities in real-time. However, the downside is grim: tools developed for fraud detection can, according to PAGCOR, lead to fraudulent activities becoming more complex, less visible, and thus harder to detect in the wrong hands. The authority is already coordinating its actions with other government agencies and legitimate industry stakeholders to respond to these changing risks in the online space.

Background

The Philippines is considered one of the most important hubs for online gaming in Asia. PAGCOR functions in a dual role as both an operator of its own casinos and as a state oversight body. The current debate over AI regulation stems from the need to keep the licensed market transparent and fair. Fernandez warned against relying on old assumptions when planning for the future. Oversight systems must be capable of responding to new business models and technological leaps without falling into a purely reactionary stance. It is about a fine balance between fostering innovation and protecting consumers from automated fraud systems.

Why it matters for German players

For German players operating under the Interstate Treaty on Gambling 2021 (GlüStV 2021), these international developments are highly relevant. In Germany, the Joint Gambling Authority of the States (GGL) monitors the market extremely strictly. While PAGCOR in Asia is still debating the introduction of AI rules, the German LUGAS system (cross-state gambling supervision system) already uses automated mechanisms to monitor deposit limits of 1,000 euros per month and prevent multi-accounting. German customers are already largely protected from the excesses that PAGCOR now fears on a global level through the stake limit of 1 euro per spin on virtual slots and the strict separation of gaming forms. Nevertheless, the warning from Manila shows that local authorities must also constantly adapt their algorithms to fend off deepfakes in identity verification (KYC) or AI-driven bot networks.

What it means for GGL-licensed casinos

Casinos with a German GGL license must already meet the highest requirements for IT security and data protection. The discussion in the Philippines clarifies that German providers will increasingly have to invest in AI-supported compliance tools in the future to remain on the whitelist. While providers without a license (often from Malta or Curacao) are often less strictly controlled, GGL-licensed companies must prove that they actively prevent manipulation by third parties. The use of AI for the early detection of individuals at risk of gambling addiction is already a topic in Germany and is further supported by international findings from authorities like PAGCOR. A fair market, as demanded by Fernandez, is already the primary goal in Germany due to the strict requirements of the GGL.