PAGCOR Probity Checks Gain Greater Importance as Philippines Reinforces FATF Anti-Money Laundering Commitments

The Philippine Amusement and Gaming Corporation (PAGCOR) is placing increased emphasis on its fit-and-proper or probity assessments as the Philippines seeks to preserve the anti-money laundering and counter-terrorism financing (AML/CFT) reforms that led to its removal from the Financial Action Task Force (FATF) grey list.

The heightened focus also comes as the country prepares for its next international evaluation in 2027.

According to a legal analysis published on July 10 by Patricia De Guzman of Arden Consult, PAGCOR's probity checks extend beyond corporate entities and may involve direct assessments of directors, corporate officers, significant shareholders, and beneficial owners.

Investors holding at least a 20 percent stake in a company are generally subject to these reviews as part of the regulator's licensing and compliance framework.

The analysis also noted that PAGCOR licensees are required to notify the regulator within 15 calendar days of any changes involving directors, officers, or ownership structures. Failure to provide complete or accurate disclosures may result in a licensing application being denied or considered withdrawn. Existing license holders also risk suspension or revocation if they fail to comply with these reporting requirements.

Arden Consult, a Philippine legal and regulatory advisory firm specializing in gaming, fintech, digital assets, and technology, advises companies on regulatory approvals, compliance matters, and market entry involving agencies such as PAGCOR.

Post-grey-list oversight remains in focus

De Guzman explained that probity checks are designed to determine whether both gaming companies and the individuals behind them possess the integrity, honesty, and suitability required to obtain or maintain a gaming license, authorization, or accreditation. Rather than relying solely on documents submitted with an application, the reviews may examine an applicant's financial condition, criminal background, regulatory compliance history, and overall reputation.

"Probity checks are not bureaucracy for its own sake," De Guzman wrote, emphasizing that the reviews form part of the Philippines' broader commitment to meeting international AML/CFT standards.

The FATF removed the Philippines from its list of jurisdictions under increased monitoring in February 2025 after concluding that the country had made "significant progress" in strengthening its AML/CFT framework.

Among the improvements highlighted by the FATF were enhanced measures addressing money laundering risks associated with casino junket operations, along with evidence demonstrating effective risk-based supervision of designated non-financial businesses and professions, a category that includes casinos.

Following the decision, FATF President Elisa de Anda Madrazo stated, “The Philippines is now actively combating the risk of dirty money flowing through casinos in the country.”

Despite the country's removal from the grey list, international oversight has not ended. The FATF has instructed the Philippines to continue working closely with the Asia/Pacific Group on Money Laundering to ensure that the reforms already implemented remain effective. Another comprehensive evaluation is scheduled for 2027.

Madrazo said the upcoming review will provide assessors with an opportunity to determine whether the reforms introduced under the Philippines' action plan continue to function effectively and remain consistently implemented.

Ownership changes can affect licensing outcomes

According to Arden Consult, PAGCOR may initiate probity assessments in several circumstances, including new license applications, license renewals, changes in corporate ownership or management, adverse reports, or suspected misconduct.

The analysis explained that applicants are assigned one of three risk categories based on factors such as the complexity of their ownership structures, geographic exposure, financial position, and compliance history. Lower-risk assessments are conducted internally by PAGCOR, while more complex reviews may be referred to accredited third-party providers, with the associated costs borne by the applicant.

Arden Consult added that probity assessments are generally expected to be completed within 30 calendar days after all required documentation has been submitted, although more complex cases may require additional time.

The firm also stressed that a successful probity assessment does not automatically result in the issuance of a gaming license. Applicants must still satisfy all other applicable regulatory requirements before receiving final approval from the PAGCOR board.

By fLEXI tEAM