Photo courtesy of Bangko Sentral ng Pilipinas.
Seeking to prevent local financial institutions from being used to launder money and move illicit funds, the Bangko Sentral ng Pilipinas (BSP) is requiring banks to adopt stricter practices when dealing with customers involved in casino junket operations.
In a guidance paper released this week, the BSP outlined best practices for banks handling accounts linked to casino junket operators—companies and individuals that arrange gaming-related services for high-value patrons, including travel, credit and private gaming room bookings.
The central bank urged banks to watch for warning signs such as unusual cash movements, complex corporate ownership structures and layered transactions—a series of transfers or financial activities designed to obscure the source, ownership or movement of funds.
“Financial transactions linked to casino junket operations can pose elevated money laundering risks,” BSP deputy governor Lyn Javier pointed out as she cited that the newly issued guidance was based on analysis by the Anti-Money Laundering Council (AMLC).
According to AMLC, in 2023 universal and commercial banks filed 71.6 percent of the suspicious transaction reports involving casino junkets that were reviewed. By value, however, land-based casinos filed 60.6 percent of the suspicious transactions.
The Ciyncil identified several common schemes, including the nonreporting of transactions that violated junket agreements, the involvement of junket operators in criminal conspiracies, financial transactions that were inconsistent with a customer’s declared source of funds and the purchase of casino chips using small-denomination bills followed by minimal gambling activity.
Javier noted that the money kaundering risks highlighted by regulators come amid a history of casinos being used as conduits for illicit funds in the Philippines.
“In 2016, more than US$100 million stolen from Bangladesh Bank’s account at the Federal Reserve Bank of New York passed through (our local) financial system before much of the money was converted into pesos and laundered through casinos,” she disclosed.
“More recently, congressional inquiries into alleged irregularities in flood control projects found that several former public works officials had recorded casino losses exceeding ₱950 million from transactions worth more than ₱1 billion,” she mentioned.
Based on the BSP guidance, finance experts recommend strengthening risk management in five areas: board and senior management oversight; money laundering and terrorism financing prevention programs; customer acceptance and identification; ongoing monitoring and suspicious transaction reporting; and self-assessment and training.
Javier encouraged banks to maintain existing safeguards, including enhanced due diligence for high-risk customers, automated transaction monitoring, client link analysis, independent verification with regulators and participation in information-sharing initiatives.
“We identify the best practices and red flags supervised financial institutions need to watch out for to be strong partners in our shared goal of curtailing crime and safeguarding the integrity of the financial system,” she asserted.