Philippines Anti-Money Laundering Council Says Casinos Highly Vulnerable to Criminal Activity

Posted on: January 25, 2020, 02:00h. 

Last updated on: January 23, 2020, 03:59h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Philippines Anti-Money Laundering Council (AMLC) says the country’s land-based casinos and online gambling sites remain highly vulnerable to criminal activity.

Philippines casinos anti-money laundering
The agency that regulates casinos in the Philippines is joining the country’s Anti-Money Laundering Council. (Image: Asia Gaming Brief)

AMLC Chairman Benjamin Diokno revealed a memorandum of agreement with the Philippine Amusement and Gaming Corporation, the state gaming regulator and operator known as PAGCOR. Under the arrangement, the two parties will share relevant information to promote closer cooperation.

The latest National Risk Assessment notes a high sectoral money laundering threat among designated non-financial businesses and professions – including casinos, which are highly vulnerable,” Diokno explained Thursday.

Diokno’s comments were reported by Filipino economic media outlet BusinessWorld. The anti-money laundering partnership comes after the United Nations said last summer that casinos in Southeast Asia are a “perfect partner” for crime syndicates to launder funds.

Escalating Problem

Diokno said it’s becoming increasingly difficult to properly monitor cashflow through casinos and internet gambling sites due a decrease in transparency regarding high rollers. He says it’s a burdensome task in identifying someone who is truly a high-stakes gambler instead of a person who is funneling funds.

The spread of licensed Philippine Offshore Gaming Operators (POGOs), which primarily target players in China where such gambling is illegal, has only added to the problem.

“This calls for strict enforcement of and compliance to anti-money laundering and counter-terrorism financing policies,” Diokno added. “With internet casinos, junket operations, and reduced transparency of high-rollers, there is much vulnerability in identifying sources and movements of funds.”

There are 60 licensed POGO firms and nearly 70 licensed land-based casinos throughout the Philippines.

Most of the gaming revenue, however, is won at Manila’s four large-scale integrated resorts: Resorts World, Okada, City of Dreams, and Solaire. All four of those casinos have already registered with the AMLC.

In the US, casinos must file a Currency Transaction Report (CTR) for anyone transacting $10,000 or more in a 24-hour period. They additionally are required by law to file a Suspicious Activity Report (SAR) should they suspect any wrongdoing – an example being “structuring,” the act of making several transactions to stay below the CTR threshold.

In contrast, Filipino casinos are only required to report to AMLC transactions of PHP5 million ($98,100) or more.

Few Can Forget

PAGCOR’s willingness to exchange information back-and-forth with the AMLC comes one month shy of the four-year anniversary of the Philippines’s involvement in the Bangladesh Bank cyber heist.

It was February of 2016 when a series of transactions were scheduled with the Federal Reserve in Manhattan. The Bangladesh Bank appeared to be withdrawing a considerable sum – $951 million in total. After $81 million was successfully withdrawn, a keen eye at the Federal Reserve noticed a spelling error and contacted bank officials in Bangladesh.

Bangladesh said it was not requesting the funds, and the Federal Reserve terminated the remaining withdrawals. However, only $18 million was recovered.

Solaire in Manila’s Entertainment City is thought to have been used to launder the money. North Korea is suspected to have carried out the theft.