PAGCOR orders all casinos must strengthen AML controls after high-risk assessment

PAGCOR’s main concerns were cash-based transactions, high-risk clients and complex business operations

PAGCOR (the Philippine Amusement and Gaming Corp) has said that all its casinos must tighten safeguards against illicit capital flows to counter money laundering (ML) and terrorism financing (TF).

In the regulator’s latest Casino Sector Risk Assessment (CSRA) into institutional risk frameworks, it warned that the sector remains highly vulnerable to financial crime.

The assessment, which covered an investigation from 2021 to 2024, said: “The casino sector remains a priority area for Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) supervision because it handles substantial value, includes cash-intensive and high-value activity, and serves a diverse customer base that may include domestic patrons, foreign customers, VIP players, junket-related customers, and users of electronic or remote gaming channels. These features are commercially significant, but they may also be misused to place, move, disguise, or integrate illicit funds if controls are not effective in practice.”

The report highlighted that PAGCOR‘s main concerns were cash-based transactions, high-risk clients and complex business operations, along with inconsistent compliance among regulated operators.

“Casinos are peripheral to the principal TF transmission channels, but may still be exposed when funds that moved through banks, remittance channels, e-money, money service businesses, informal transfer systems, or intermediaries later enter casino activity. For regulated entities, the key message is practical: AML/CTF controls must operate effectively at the point where risk occurs. Licensees should be able to identify the customer, understand the source of funds and source of wealth where required, monitor cash and chip movement, detect unusual value conversion, screen for sanctions and adverse information, escalate suspicious activity, and maintain records that allow timely reconstruction of customer activity,” the assessment stated.

“Land-based casinos remained high-impact due to their scale, cash intensity, high-value play,
foreign patronage, and VIP or junket exposure. Electronic gaming expanded and diversified, creating wider customer reach, higher transaction frequency, and more complex supervision across venues, systems, and platforms. Offshore gaming and offshore-style activity contracted sharply, but historical and residual risks remain relevant because of their foreign-facing, non-face-to-face, intermediary-based, and cross-border characteristics.”

“High-value play, intermediated customer relationships, foreign patronage, and complex settlement arrangements can reduce transparency over the source of funds, beneficial ownership, and the true person controlling the activity,” it added.

It warned that casinos must look out for frequent low-value funding followed by gaming activity that is inconsistent with the customer profile. It must flag remittance-funded play without clear source, purpose, or relationship between sender and customer. Customer, funder, counterparty, or intermediary with unexplained links to TF-sensitive locations, networks, or adverse information must be reported.

PAGCOR warned that not complying could see more severe ‘supervisory or enforcement response.’