PAGCOR’s Directives for Casino Operators
The Philippine Amusement and Gaming Corporation (PAGCOR) has issued a directive for gaming operators to bolster their anti-money laundering (AML) measures. This comes after the sector was deemed to have a ‘high’ risk of money laundering. The instruction follows PAGCOR’s second Casino Sector Anti-Money Laundering and Counter-Terrorism Financing Risk Assessment, calling for its inclusion in operators’ risk and compliance assessments. Covering 2021 to 2024, the evaluation was ratified on June 25th. Despite moderate terrorism-financing risks, there were no identified cases linked to PAGCOR-regulated casinos during this period.
Factors Contributing to High Risk
The elevated risk level has been attributed to several factors, including cash handling and conversion activities, dealings with high-risk customers, and complex multi-channel operations. PAGCOR highlighted the sector’s susceptibility to proceeds from serious crimes, accentuating areas like high-value transactions and VIP engagements, where controls may be insufficient. The prevalence of cash and reliance on high-stakes gaming further exacerbates these vulnerabilities.
Vulnerability in Land-Based and Electronic Gaming
Land-based casinos are particularly vulnerable due to their expansive operations, cash intensity, and international customer base. Additionally, exposure to VIP and junket activities amplifies their risk. Meanwhile, electronic gaming received a medium-high rating, driven by its wide reach, frequent transactions, and online nature. The system maturity within electronic platforms remains irregular, posing further challenges to regulatory compliance.
Guidance for Gaming Operators
PAGCOR has urged operators to intensify measures such as customer due diligence, source-of-funds verification, and transaction monitoring. Focus on monitoring high-value interactions, including VIP and remote gaming activities, is essential. Larger operations may have robust systems already, but smaller venues could struggle with data tracking and transaction analysis across different channels.
Potential Consequences of Non-Compliance
PAGCOR has issued a stern warning, indicating that a lack of adequate consideration for these assessments could influence future regulatory actions. Operators must therefore prioritize compliance to avoid potential scrutiny or enforcement actions.
Conclusion
In an industry where financial integrity is crucial, PAGCOR’s call for enhanced anti-money laundering practices underlines the importance of robust compliance frameworks. Operators across the Philippines must adapt swiftly to these demands to safeguard against the inherent risks identified in the latest assessments.