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The Bangko Sentral ng Pilipinas (BSP) has issued new guidance requiring banks and other supervised financial institutions to strengthen anti-money laundering (AML) controls over casino junket operators following a review of the sector’s financial risks.
The central bank said banks should enhance customer due diligence, transaction monitoring and suspicious transaction reporting for junket operators, which arrange gaming-related services including travel, credit and casino bookings for high-value players.
The guidance follows a thematic review of selected universal, commercial and thrift banks with exposure to casino junkets. The review examined customer due diligence procedures, transaction flows and the effectiveness of existing risk controls.
According to the BSP, cash and cheque transactions remain the primary methods of moving funds into and out of junket operations, making illicit financial flows more difficult to detect. The review also identified frequent transfers involving casinos, junket operators, financiers, high-value players and money service businesses.
The central bank highlighted several key vulnerabilities, including the cash-intensive nature of junket operations, cross-border fund transfers, limited transparency over the identities and sources of funds of high-value players, and the use of intermediaries and layered transactions.
Among the warning signs identified were transactions inconsistent with a customer’s declared source of funds, purchases of casino chips with small-denomination cash followed by minimal gaming activity, unexplained large cash and cheque deposits, and failures to report transactions required under junket agreements.
The BSP also noted instances where individuals initially identified as casino players or financiers were later found to be junket operators or beneficial owners of junket companies.
While most banks already classify junket operators as high-risk customers subject to enhanced due diligence, the BSP said institutions should adopt more tailored policies covering customer onboarding, ownership structures, business activities and transaction patterns.
The central bank added that the limited availability of official information on registered and delisted junket operators and their beneficial owners continues to hamper effective risk assessment. It said closer information sharing between the BSP, the Philippine Amusement and Gaming Corporation (PAGCOR) and financial institutions would be critical to strengthening oversight of the sector.
