Philippine Casino Industry Faces Heightened AML Oversight Following PAGCOR’s Latest Sector Risk Assessment

Philippine casino operators are entering a period of intensified regulatory oversight after the issuance of PASED Advisory No. 2026-005 on July 13, 2026. Through the advisory, the Philippine Amusement and Gaming Corporation (PAGCOR) formally released its second Casino Sector Risk Assessment, covering the years 2021 through 2024. The assessment assigns the regulated casino sector an overall High risk rating for money laundering and a Medium-High risk rating for terrorism financing, reinforcing expectations that gaming licensees and accredited support service providers immediately incorporate the findings into their institutional risk management frameworks. Regulators have made clear that future supervisory assessments will examine the extent to which these national risk indicators have been embedded into everyday compliance operations.

The advisory places significant emphasis on the obligations imposed under Republic Act No. 9160 and Republic Act No. 10927, requiring regulated entities to maintain anti-money laundering controls that are proportionate to the risks identified. Every licensed casino operator is expected to circulate the national risk assessment throughout its organization, ensuring that boards of directors, senior executives, compliance personnel, internal auditors, and frontline operational staff understand its findings and implications. Institutions are also instructed to conduct immediate evaluations of their existing risk assessment models to determine whether current controls remain effective. Where inconsistencies or weaknesses are identified between institutional frameworks and the national assessment, operators are expected to implement corrective measures without delay. Supervisory examinations will increasingly focus on how comprehensively licensees have integrated the sector assessment into active compliance programs, with inadequate implementation potentially resulting in adverse examination findings, administrative penalties, or additional regulatory enforcement measures.

The regulatory guidance also stresses that institutional risk assessments should function as dynamic compliance tools rather than static documents. As criminal methodologies evolve alongside advances in gaming technology, regulated entities are expected to regularly reassess and strengthen their customer due diligence processes, transaction monitoring systems, and internal reporting mechanisms. Executive management carries direct responsibility for ensuring compliance functions possess the necessary authority, staffing, technology, and financial resources to effectively administer anti-money laundering controls. At the same time, internal audit departments are required to independently evaluate the effectiveness of these compliance systems on an ongoing basis. By assigning accountability throughout every level of an organization, from boards of directors to operational personnel on casino floors, regulators seek to establish a more resilient framework capable of identifying and mitigating financial crime risks.

The sector assessment identifies several inherent characteristics of casino operations that continue to expose the industry to elevated money laundering threats. Traditional land-based casinos remain one of the most significant areas of concern due to their substantial transaction volumes, extensive reliance on cash, concentration of high-value gaming activity, and frequent engagement with foreign patrons. Business relationships involving junket operators, VIP customers, and international gaming arrangements require particularly robust transparency regarding beneficial ownership and the true origin of customer funds. During the assessment period, electronic gaming expanded considerably, increasing customer accessibility, transaction frequency, and operational complexity through remote gaming interfaces. Although offshore gaming activity declined significantly between 2021 and 2024, regulators caution that risks continue to exist through residual legacy operations, successor entities that may disguise previous offshore activities, and cross-border payment structures capable of facilitating illicit financial flows.

According to the assessment, the combination of significant domestic criminal threats and sector-specific vulnerabilities underpins the overall High money laundering risk rating assigned to the casino industry. Criminal proceeds generated through drug trafficking, cyber-enabled fraud, environmental crime, corruption, tax offenses, and human trafficking may be introduced into casino environments through cash buy-ins, chip purchases, or deposits into digital gaming accounts. Criminals may then seek to legitimize those funds by purchasing casino chips, engaging in only minimal gaming activity, and subsequently redeeming their balances through wire transfers or cashier’s checks that create the appearance of legitimate gambling winnings. Modern multi-channel casino environments further complicate detection efforts by allowing illicit funds to move between physical gaming tables, electronic gaming machines, casino cage operations, and digital payment platforms. Regulators therefore expect casino operators to deploy monitoring systems capable of consolidating customer activity across every gaming channel and operational platform in real time to identify suspicious transactional patterns.

The assessment also extends regulatory expectations to service providers supporting licensed casino operators. Companies responsible for delivering technical infrastructure, gaming platforms, hosting services, marketing solutions, or other operational support may not conduct gaming directly, yet they maintain systems that underpin transaction processing, customer databases, and financial interfaces essential to casino operations. These organizations are expected to review the national sector risk assessment carefully and determine whether their technological environments adequately support the anti-money laundering obligations of licensed gaming operators. Technical providers are encouraged to identify weaknesses in software architecture, user access controls, and transaction data management that could permit criminals to conceal financial activity or disrupt audit trails. Organizations maintaining group-wide risk management frameworks are further expected to incorporate the assessment’s findings to promote consistent compliance integration across both primary casino operators and their supporting technology partners.

While the assessment concludes that casinos are not the primary channel used for terrorism financing, it nevertheless assigns the sector a Medium-High terrorism financing risk rating due to the potential for indirect misuse. Funds associated with terrorism financing frequently enter the financial system through banks, money service businesses, or electronic money platforms before eventually reaching casino environments. Once inside the gaming sector, they may be converted through cash buy-ins, transfers of casino chips, gaming funded by remittances, or rapid redemption of winnings. Because terrorism financing often involves relatively modest transaction amounts that resemble ordinary customer activity, conventional monitoring systems based primarily on large-value transactions may fail to identify suspicious behavior. Consequently, casino operators are expected to strengthen staff awareness by providing specialized training focused on recognizing subtle warning signs, including unexplained links to remittance activity, unusually rapid movement of funds, and transactional patterns connected to higher-risk geographic regions.

The report concludes by outlining several operational priorities designed to strengthen compliance across the casino industry. Customer onboarding procedures should include comprehensive screening against targeted financial sanctions lists, politically exposed person databases, and adverse media sources. Whenever customers present elevated risk profiles or utilize complex ownership structures, compliance personnel are expected to undertake enhanced due diligence that verifies both the source of wealth and the source of funds. Casino cage operations should maintain detailed records covering every cash transaction, chip redemption, safekeeping deposit, and wire transfer conducted within their facilities. Frontline employees should receive ongoing training on emerging money laundering typologies so they are able to identify suspicious conduct, reject questionable transactions where appropriate, and escalate concerns promptly to compliance departments.

The assessment also highlights the importance of maintaining effective suspicious transaction reporting processes throughout regulated institutions. Compliance teams are expected to ensure that suspicious transaction reports contain comprehensive narratives explaining the basis for suspicion, accurate identification of relevant predicate offenses, and complete supporting documentation. Internal governance arrangements should establish clear procedures governing how potentially suspicious activity is reviewed and escalated, minimizing unnecessary delays before reporting obligations are fulfilled. In addition, regulated entities are reminded of their responsibility to preserve customer identification records, transaction histories, and gaming activity logs for the full statutory retention period. Maintaining complete, accurate, and readily accessible records enables casino operators to reconstruct customer activity efficiently during internal investigations and regulatory examinations while supporting broader efforts to safeguard the integrity of the Philippine gaming sector.

By fLEXI tEAM