The Bangko Sentral ng Pilipinas has told banks and other supervised financial institutions to tighten anti-money-laundering and counter-terrorism financing controls for customers engaged in casino junket operations. The central bank said the sector poses elevated risks of money laundering, terrorism financing and other illicit activity if institutions fail to sharpen their checks.
The guidance paper, titled “Risk Management Practices for Customers Engaged in Casino Junket Operations,” was issued to banks, electronic money issuers, money changers and payment service providers. It asks firms to strengthen board and senior management oversight, customer acceptance and identification, ongoing monitoring and suspicious transaction reporting, together with self-assessment and staff training.
Deputy Governor Lyn I. Javier said institutions should focus on bespoke policies and procedures, and on the effectiveness of controls at onboarding and during continuing due diligence. The BSP also pointed to warning signs such as unusual cash patterns, layered transactions and shell companies.
Layered transactions were described as a way of obscuring the source, ownership or movement of funds. The central bank said that makes it harder to determine the underlying purpose of the money flow and to track transactions to and from casino junket operators.
The paper also calls for a separate risk assessment for junket customers rather than relying only on broader casino or gaming policies. Banks are asked to verify casino accreditation, PAGCOR approval and junket agreements, and to review articles of incorporation, declared business activities, ownership structures and beneficial owners.
The guidance goes further by urging screening against PAGCOR and other sources, sanctions and adverse-media databases, and information on scam hubs and accounts that share the same address as junket operators. The BSP said information on junket operators, their beneficial owners, signatories, related parties and associated entities is crucial for cross-checking and validating related transactions.
The central bank said its paper was informed by a 2023 AMLC analysis of suspicious transaction reports linked to casino junkets. That analysis covered 3,308 reports worth PHP17.79 billion from Sept. 21, 2018 to Jan. 18, 2023, with universal and commercial banks accounting for 71.58% of the volume and land-based casinos for 60.6% of the value.
The AMLC analysis also flagged non-reporting of transactions that violated junket agreements, involvement of junket operators in criminal conspiracies, transactions inconsistent with a customer’s declared source of funds, and purchases of casino chips using small-denomination bills followed by minimal gambling activity.
PAGCOR’s latest AML and counter-terrorism financing risk assessment, released last week, said the Philippine casino sector faces heightened money-laundering risk, especially in high-value transactions, cash activity, VIP and junket relationships, electronic gaming and remote channels. It also said the industry faces medium to high terrorism-financing risk, even though it is not a primary channel for such flows.
That assessment said casinos can still be exposed if funds later enter casino activity through banks, remittance channels, e-money, money service businesses, informal transfer systems or intermediaries. It also said the overall vulnerability of the sector had been rated high in the second national risk assessment, because casinos are cash-intensive, operate around the clock and move large sums quickly.
PAGCOR examined eight of the 11 casinos with junket operations from 2018 to 2020 and found deficiencies in market entry, customer due diligence, ongoing monitoring and transaction reporting. It said the most significant areas for enhancement were market entry and CDD.
The BSP’s concern sits against a longer record of casino-related laundering risks in the Philippines. Inquirer noted that more than $100 million stolen from Bangladesh Bank passed through the country’s financial system in 2016 before being converted into pesos and laundered through casinos, while congressional inquiries into flood-control projects found former public works officials recorded casino losses of more than P950 million from transactions worth over P1 billion.
