By means of Luisa Maria Jacinta C. Jocson, Reporter
MONEY LAUNDERING activities are seen as a decrease after the introduction of a total ban Philippine offshore gaming onerators (POGO), said the Anti-Money Laundering Council (AMLC).
“Given that the POGO sector is highly vulnerable to money laundering activities, a total ban on POGOs could result in a reduction in money laundering opportunities within the gaming sector,” the report said in an email.
A risk assessment conducted by AMLC in March 2020 found that POGOs, which are considered internet casinos, are “highly vulnerable to money laundering.”
“Thus, the risk of money laundering within the gaming sector could be reduced by the Philippine government’s ban on the operation of POGOs,” AMLC added.
President Ferdinand R. Marcos Jr. ordered a total ban on all oFgambling activities on the coast, citing their links to illegal activities such as money laundering, prostitution and human traffickingfficken.
The Philippine Amusement and Gaming Corp. was ordered to close all POGO facilities by the end of the year.
The Philippines was among the top five countries in Southeast Asia with increased money laundering activities between 2018 and 2023, previous data from Moody’s showed. Money laundering in the Philippines increased 45% between 2022 and 2023, the report said.
However, the AMLC makes it clearFThe conclusion is that the remaining action items of the Financial Action Task Force (FATF) relate to mitigating the risks associated with junket operations in casinos and not POGO operations.
In June, the FATF placed the Philippines on its “grey list” of jurisdictions under enhanced money laundering supervision for the third year in a row.
The FATF said the country has taken action on 15 of the 18 recommended points. One of the remaining issues to be addressed is “demonstrating the use of anti-money laundering and anti-money laundering efforts by regulators.”Ffinancing terrorism controls (AML/CFT) to mitigate the risks associated with casino junkets.”
“We reiterate that POGOs are not related to the remaining action item regarding casino junket operations,” AMLC said.
“This means that the existence or absence of POGOs in the Philippines is not an eFperfect in addressing the action item regarding junket operations in casinos.”
Junkets are defined by AMLC as “an agreement between a casino and a junket operator to allow a gambling period for one player or a group of players in a casino.”
These are casino marketing programs organized as a gaming tour for ‘high rollers’ who travel to casinos to gamble. These junkets could include transportation, accommodation, casino rewards and moving money to and from the casino, it added.
AMLC said the action item on casino junkets includes implementing anti-money laundering controls to mitigate risks in junket operations.
“One of these measures is the implementation of Fit and proper testing on junkets, the use of appropriate customer due diligence mechanisms and regular monitoring of transactions involving junket operations,” it added.
To further eliminate money laundering risk, AMLC said gaming regulators should improve their AML/CFT controls.
“To further support the declining risk in the gaming sector, casino regulators must continue to vigorously implement the necessary risk measures, including robust compliance monitoring and enforcement of anti-money laundering obligations within the sector,” AMLC said.
“In any case, the Philippine government continues to implement all necessary measures to address all remaining action items and initiate the exit process within one year.”
BSP Governor Eli M. Remolona, Jr. previously said the Philippines could leave the gray list next year.
Antonio A. Ligon, a law and business professor at De La Salle University in Manila, said eliminating POGOs will have a “strong positive impact” on investor sentiment.
“Anything aimed at stopping illegal activities and irregularities in business is welcome,” he said in a Viber message. “The harmful effects of illegal activities should not be ignored because of the revenue generated from POGOs.”
The Makati Business Club previously said the contribution of POGO investments was “minimal,” equivalent to 0.2% of gross domestic product in 2023.
The finance department also said there are reputational risks from POGOs could also cost the government P55.36 billion in lost investments due to their criminal ties as P29.01 billion in lost revenueplays in tourism.