BSP Targets Online Gambling Payments with Stricter Rules to Bolster Consumer Protection and Combat Financial Abuse

The Bangko Sentral ng Pilipinas (BSP) is moving to impose stricter oversight on digital financial services connected to online gambling, releasing a draft circular that would introduce a wide array of measures aimed at curbing misuse of payment systems and addressing rising concerns over the social impact of gambling. According to a report by BusinessWorld, the central bank's sweeping proposal seeks to fortify financial safeguards, enhance consumer protection, and tighten the flow of funds to gambling platforms.

The draft regulation, circulated for industry feedback, would specifically bar payment service providers (PSPs) from embedding direct links or redirecting users to online gambling websites. A key provision would also restrict daily fund transfers to Online Gambling Transaction Accounts (OGTAs), capping them at 20 percent of a user’s average daily account balance. The move is part of what the BSP calls an effort to “promote responsible use of digital financial services, strengthen consumer protection, and mitigate the risks associated with online gambling.”

The proposed guidelines would apply not only to PSPs but also to operators of payment systems (OPSs) involved in any transaction related to online gambling. These institutions would be required to secure prior BSP authorization, maintain a minimum capital base of PHP300 million (approximately $5.3 million), and meet rigorous supervisory compliance standards, including attaining at least a composite rating of three under the BSP Supervisory Assessment Framework.

To strengthen financial integrity and prevent abuse, the draft circular requires PSPs and OPSs to develop and implement robust anti-money laundering (AML) and counter-terrorism financing systems. Governance mechanisms must include board-level oversight dedicated to monitoring risks associated with gambling services. Furthermore, the BSP would formally categorize online gambling operators as “high-risk merchants,” triggering mandatory enhanced due diligence procedures, beneficial ownership disclosures, and continuous risk assessments.

In addition to tighter operational controls, the rules set specific parameters for the use of OGTAs. Each user may only hold a single OGTA, which would be a designated transaction account used solely for gambling-related activity. All deposits into these accounts must originate from the same institution and are bound by the 20 percent daily funding cap. Moreover, gambling transaction hours must be limited to six hours per day. If a user demonstrates signs of excessive gambling activity, the PSP must enforce a 24-hour cooling-off period.

Notably, PSPs must ensure that lending features within their platforms are disabled for users maintaining an OGTA. All employees of payment service providers will be barred from engaging in online gambling activities altogether.

To further encourage responsible behavior, the BSP's draft circular mandates that PSPs implement a Responsible Online Gambling Policy. This would include in-app alerts to help users monitor their activity, self-exclusion mechanisms, and visible links to support services. The objective, the BSP notes, is to “help users exercise self-control and deter compulsive gambling behavior.”

Violations of the proposed framework could lead to steep financial penalties. PSPs found to be in breach of the guidelines may face fines of up to PHP1 million (around $17,100) per offending transaction or PHP100,000 (approximately $1,710) per day for continuing non-compliance. Repeat offenses could result in the suspension or full revocation of a provider’s authority to process gambling-related transactions.

The central bank's proposal comes amid parallel legislative efforts to rein in the country’s growing online gambling industry. Earlier this month, Senator Sherwin Gatchalian introduced a bill aimed at curbing abuse and tightening regulation of digital gambling platforms without imposing an outright ban. Among the senator’s recommendations are prohibiting the use of mobile wallet GCash for gambling, raising the legal gambling age from 18 to 21, and setting minimum thresholds of PHP10,000 ($176) for individual bets and PHP5,000 ($88) for account top-ups.

As both regulatory and legislative measures gain momentum, the BSP's initiative signals a clear intention to ensure that digital payment platforms do not become conduits for financial harm or social instability, particularly as online gambling activity continues to expand.

By fLEXI tEAM