PAGCOR Tightens Anti-Money Laundering Controls for Philippine Casinos

The Philippine Amusement and Gaming Corporation (PAGCOR) has ordered licensed casinos and service providers to strengthen their anti-money laundering (AML) and counter-terrorism financing (CTF) controls. This directive follows a comprehensive review that identified high money laundering risks and medium-high terrorism financing risks within the industry. The new guidelines aim to ensure that operators implement practical compliance measures rather than merely relying on written policies. These measures apply to both land-based casinos and their supporting service providers. PAGCOR is thus underlining its commitment to safeguarding the integrity of the Philippine gambling sector. This is a crucial step towards adhering to international standards and curbing criminal activities. Similar efforts are also observed in other Asian gambling regions, such as Goa, India, where the government has also approved new rules to tighten casino oversight, aiming to increase transparency and combat money laundering. There, the Gaming Commissioner has been granted new enforcement powers, including the ability to close casinos for non-compliance or impose financial penalties of up to INR7.5 million (approximately US$81,000).

Numbers and facts

PAGCOR's review covered the period from 2021 to 2024. It assessed money laundering risk as “high” and terrorism financing risk as “medium-high.” PAGCOR clarified that during this period, no confirmed terrorism financing cases involving a regulated casino were found. Nevertheless, the authority requires operators to treat terrorism financing as a separate risk in their internal assessments. Identified risky areas include cash-heavy activity, large transactions, junkets, VIP gaming, electronic gaming, remote channels, and cross-border fund transfers. According to PAGCOR chief Alejandro Tengco, there are around ten million active online players in the Philippines. However, only 32 million users are registered, as many players use multiple accounts.

“As digital gaming continues to grow, PAGCOR has implemented significant regulatory upgrades to protect players, promote transparency and ensure that online gaming operates within a secure and well-regulated environment.” - Alejandro Tengco, Chief of the Philippine Amusement and Gaming Corporation (PAGCOR)

PAGCOR demands that casinos reassess their risk profiles and adapt their current procedures to the identified risks. This includes more comprehensive customer due diligence, covering beneficial ownership checks, source-of-funds reviews, source-of-wealth reviews, sanctions screening, and checks on politically exposed persons (PEPs). Monitoring of rapid redemptions, large buy-ins, limited-play activity, and fund transfers across different gaming channels will also be intensified. PAGCOR requires better customer-level data to detect suspicious patterns and reconstruct transaction histories when needed.

Background

The Philippine gambling authority, PAGCOR, has a dual role as both a casino operator and a regulator. However, PAGCOR plans to withdraw from casino operations in the future and focus solely on regulation, as suggested by previous reports. This decision aims to enhance the efficiency and credibility of its regulatory work. The current AML and CTF measures are a significant step in this direction. Closer scrutiny of VIP customers, junket relationships, and other high-value accounts is a priority. Junkets, which are third-party promoters bringing high-stakes players to casinos, have long attracted regulatory attention due to their potential to complicate the oversight of player funds. Cash and chip activity, electronic gaming, reporting quality, and operators with higher exposure to riskier business segments will also receive increased supervision. PAGCOR warns that insufficient consideration of the sector assessment could affect supervisory reviews or enforcement actions. Furthermore, PAGCOR is considering a complete ban on gambling advertisements to improve public perception and player protection. An advertising ban during prime time evenings already exists. In parallel, Know Your Customer (KYC) rules are being tightened, including a two-step verification process with valid government IDs and real-time selfies.

Why it matters for German players

For German players living and gambling in Germany, these tightened regulations in the Philippines have no direct impact. The rules and regulations of the German Joint Gambling Authority of the Federal States (GGL) are decisive here. The Interstate Treaty on Gambling 2021 (GlüStV 2021) introduced strict regulation in Germany to ensure player protection and prevent money laundering. German players are only permitted to play at online gambling providers licensed by the GGL and listed on its official whitelist. These providers are subject to stringent conditions that go well beyond what we sometimes see in other jurisdictions. These include, for instance, a maximum stake of 1 Euro per spin on slot machines and a monthly deposit limit of 1,000 Euros, which is monitored via the central LUGAS system. LUGAS ensures that players do not exceed these limits even across multiple providers. Bonus offers are highly restricted and must not be tied to excessively high wagering requirements. These measures aim to prevent gambling addiction and ensure that gambling takes place safely and responsibly.

What it means for GGL-licensed casinos

The situation in the Philippines highlights the global importance of robust AML controls. GGL-licensed casinos in Germany are already subject to very high standards regarding anti-money laundering prevention and player protection. They must implement comprehensive KYC processes to verify player identities and ensure transparency regarding the origin of funds. Regular audits and close collaboration with financial authorities are standard practice. Transaction monitoring is highly sophisticated to quickly detect and report suspicious activities. These continuous reviews and adjustments to regulations are necessary to maintain the highest level of protection against crime and gambling addiction. German regulations could even serve as a model for regions like the Philippines, as they already aim for a high degree of transparency and player identification.