Filipino on-line gambling operations are dealing with new AML commitments


Online gambling operators based in the Philippines will face tougher anti-money laundering (AML) requirements as the country seeks to avoid being graylisted by global financial watchdogs.

Last week, both bodies of the Philippine legislature passed a revised version of the country’s Money Laundering Act (AMLA), which includes Philippine offshore gaming operators (POGOs) and their service providers according to the AMLA definition of “insured persons”.

The AMLA, approved in 2001, was amended in 2017 to include the country’s land-based and online casino operators, as well as the casino’s junk operator partners, under the definition of insured persons. (Though critics have expressed dismay at the high cash threshold for reporting suspicious transactions.)

However, the amended bill did not affect the hundreds of POGO service providers identified as of concern by the Anti-Money Laundering Council (AMLC) in March last year. The AMLC also expressed concern about the lack of commitment by many POGOs to comply with their new KYC (know-your-customer) requirements.

The amendments give the AMLC the power to issue subpoenas to gambling operators and conduct search and seizure efforts if companies prove unwilling to cooperate. The changes also include tax crimes as a predicate for money laundering.

The revised AMLA still requires the signature of the Philippine President Rodrigo Duterte be effective. Duterte is expected to sign the revised bill to reduce the likelihood that the Financial Action Task Force (FATF) will comply with its threats to put the Philippines on the “gray list” of jurisdictions deemed insufficient to reduce money laundering activities apply obligatory.

The FATF graylisted the Philippines in 2000, and it took the country five years to leave this hall of shame. The 2017 AMLA changes came after the FATF threatened in a 2013 AMLA update to bring the country back into sin for exempting gambling providers from the insured person category.

Duterte is said to share legislative fears that returning to the gray list will negatively impact an economy already plagued by the pandemic. Of particular concern is the potential for increased costs for remittances sent to the Philippines by hordes of Filipino foreign workers from overseas.

The FATF’s final deadline for the Philippines to take AML seriously was supposed to be last October, but the ongoing effects of the pandemic caused the FATF to extend that deadline to February 1. The FATF will reportedly decide in June whether the new rules are strict enough to keep the Philippines on their good books.

The POGO sector has been decimated by the combination of pandemic restrictions and increased government oversight. POGOs saw an increasingly rare hiatus this month as the Supreme Court cut a new 5% sales tax on gambling, but the number of POGOs interested in keeping their Filipino licenses continues to shrink.