The Philippines Central Bank Tells Casinos to Check on Junket Clients More

The Bangko Sentral ng Pilipinas has issued new guidance urging banks and other financial institutions it supervises to tighten anti-money laundering and countering the financing of terrorism controls for customers involved in casino junket operations. The move follows a thematic review of selected banks with exposure to junket operators and junket-related transactions.

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New Risk Controls Pushed

This guidance will assist the banks in identifying, assessing, and managing the risks associated with this industry. The junket operators of casinos provide services related to games to their wealthy clients, including traveling and accommodation; therefore, the central bank said that the transactions associated with this business could be more risky since they could involve cash, would be cross-border, and would have intermediaries involved.

BSP deputy governor Lyn Javier said that transactions relating to casino junket operators have higher risks of money laundering. She added that the guidance identifies best practices and red flags that banks should watch for as part of the shared effort to curb crime and protect the integrity of the financial system.

The paper recommends stronger risk management across 5 areas: board and senior management oversight, money laundering and terrorism financing prevention programmes, client acceptance and identification, ongoing monitoring and suspicious transaction reporting, and self-assessment and staff training.

What Banks Are Seeing

The BSP said some institutions are already applying good practices such as enhanced due diligence for high-risk customers, automated transaction monitoring, client link analysis, independent verification with regulatory agencies, and participation in information-sharing initiatives. Even so, the regulator said further improvement is needed in some areas.

According to the central bank, banks generally classify junket operators as high-risk clients and subject them to enhanced due diligence during onboarding and transaction monitoring. The BSP nonetheless said institutions should build dedicated risk management frameworks for junket clients and improve staff training on the sector’s risks.

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Among the red flags identified by the BSP are unusual patterns of large cash transactions and cheque deposits without an apparent economic purpose, layered transactions, complex ownership structures, and the use of non-cash instruments to move funds into and out of casinos. The guidance also pointed to shell companies, shared business addresses, and the reclassification of customers initially tagged as casino financiers or players into junket operators after further analysis.

Findings Behind The Guidance

The review was informed by an earlier study from the country’s Anti-Money Laundering Council on suspicious transactions involving casino junkets. That study found typologies such as transactions inconsistent with declared sources of funds, junket operators involved in criminal conspiracies, and the purchase of casino chips using small-denomination currency followed by limited gaming activity.

It also pointed to the cash-heavy nature of junket operations, cross-border transactions, and limited transparency around high-roller clients’ sources of funds as key vulnerabilities. The BSP said effective risk management will require stronger information sharing among supervising authorities, particularly the BSP, the Philippine Amusement and Gaming Corp, and financial institutions.

Coordination With Regulators

The central bank noted that banks still face challenges because of limited reliable information on registered and delisted junket operators, their beneficial owners, and related entities. It also cited the use of shell companies and layered transactions, which can obscure fund flows and make monitoring more difficult.

PAGCOR has also instructed casino operators to strengthen their AML and CFT frameworks after completing its latest sector-wide risk assessment. Its directive warned that industry controls must keep pace with risks linked to VIP gaming, junkets, electronic gaming, and cross-border transactions.

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Source: GGR Asia