The Philippine Amusement and Gaming Corporation (PAGCOR) has issued a critical advisory, PASED Advisory No. 2026-005, on July 13, 2026, requiring all licensed casino operators and gaming support service providers in the Philippines to review and strengthen their Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) frameworks.
This directive follows PAGCOR's "Casino Sector Risk Assessment" for 2021-2024, which classified the sector as "High Risk" for money laundering and "Medium Risk" for terrorism financing, necessitating immediate integration of these findings into institutional risk management.
Key Takeaways for Filipino Operators
- PAGCOR's advisory, issued July 13, 2026, stems from a 2021-2024 risk assessment.
- The Philippine casino sector is now classified as "High Risk" for money laundering and "Medium Risk" for terrorism financing.
- Operators must update their internal AML/CTF risk models and strengthen customer due diligence (CDD) and enhanced due diligence (EDD).
- Increased scrutiny is placed on large cash transactions, VIP junket segments, and multi-channel operations.
- Non-compliance may lead to administrative sanctions, with future supervisory assessments focusing on the practical embedding of national risk indicators.
Understanding the High-Risk Classification
PAGCOR's 2021-2024 Casino Sector Risk Assessment identified several key vulnerabilities contributing to the "High Risk" classification for money laundering. These include the prevalence of large cash transactions, the involvement of high-risk customers and intermediaries, particularly within VIP junket segments, and the complexities arising from multi-channel operations, including electronic gaming and remote access.
The assessment also highlighted uneven implementation of compliance controls across different operators, significant foreign patronage, and complex settlement arrangements as factors increasing the sector's susceptibility to illicit financial activities.
While the sector was assessed as posing a medium risk for terrorism financing, PAGCOR noted that no confirmed cases involving PAGCOR-licensed entities were identified during the review period. However, the advisory cautions that casinos could still be exposed when funds pass through other financial channels before entering casino activities. This underscores the need for a comprehensive approach that considers all potential entry points for illicit funds.
Mandatory Actions for Enhanced Compliance
The PAGCOR directive outlines several mandatory actions for licensed casino operators and gaming support service providers to bolster their AML/CTF frameworks. Operators are required to review and update their existing AML and CTF risk models to align with PAGCOR's findings. This includes updating internal risk assessments to reflect the identified vulnerabilities and risk classifications.
A significant focus is placed on strengthening customer due diligence (CDD) and enhanced due diligence (EDD) processes, particularly for high-risk customers and transactions.
Furthermore, operators must improve their transaction monitoring capabilities to detect and report suspicious activities more effectively. Enhanced verification of source-of-funds and source-of-wealth is also mandated. The directive also emphasizes the implementation of robust sanctions screening and politically exposed person (PEP) checks. Strengthening suspicious transaction reporting (STR) mechanisms is crucial, ensuring timely and accurate submission to relevant authorities.
Finally, the risk assessment findings must be distributed to boards of directors, senior management, compliance officers, internal audit teams, and frontline staff to ensure a unified understanding and implementation of the new requirements.
Addressing Key Vulnerabilities in Operations
PAGCOR's advisory specifically targets several operational vulnerabilities. For instance, the directive implicitly calls for more stringent controls around large cash transactions, which are a primary concern for money laundering. Operators should review their cash handling policies, implement stricter reporting thresholds, and enhance due diligence for transactions exceeding certain limits. Regarding high-risk customers and intermediaries, particularly VIP junket segments, operators are expected to apply enhanced due diligence measures, including more thorough background checks and ongoing monitoring of these relationships.
The challenges posed by multi-channel operations, including electronic gaming and remote channels, require operators to ensure their digital platforms have robust AML/CTF controls. This involves implementing advanced transaction monitoring systems that can identify unusual patterns across various gaming channels. Addressing uneven implementation of compliance controls means that all operators must standardize and elevate their AML/CTF practices to meet the new benchmarks set by PAGCOR. This may necessitate internal audits and training programs to ensure consistency across all operational units.
Training and Internal Controls
Effective compliance hinges on well-trained personnel and robust internal controls. PAGCOR's directive implicitly calls for enhanced AML/CTF training requirements for various staff levels. Frontline employees, cage personnel, surveillance teams, and electronic gaming staff are often the first line of defense against money laundering and terrorism financing. Their training should focus on identifying red flags, understanding customer due diligence procedures, and knowing how to escalate suspicious activities.
Compliance officers and internal audit teams require more in-depth training on risk assessment methodologies, regulatory updates, and the practical application of enhanced due diligence measures.
Operators must identify deficiencies in their existing controls and implement necessary improvements. This includes reviewing and updating internal policies and procedures to reflect the new risk classifications and mandatory actions. Treating terrorism financing as a distinct component of institutional risk assessments is also crucial, requiring specific protocols for identifying and mitigating TF risks.
The directive emphasizes that compliance standards need to adapt to rising risks linked to VIP gaming, junkets, e-gaming, and cross-border money transfers, demanding continuous adaptation and improvement of internal control frameworks.
Consequences of Non-Compliance and Future Outlook
PAGCOR has made it clear that inadequate implementation of these new measures may lead to administrative sanctions. This underscores the seriousness with which the regulator views the strengthening of AML/CTF frameworks. Future supervisory assessments will specifically examine the extent to which national risk indicators, as identified in the 2021-2024 Casino Sector Risk Assessment, have been embedded into daily compliance operations.
Operators should not rely solely on documented policies and procedures but must ensure their AML/CTF controls are effective in practice.
The assessment places responsibility on individual operators to compare their existing safeguards against the identified risks and address weaknesses relevant to their specific businesses. This proactive approach is essential for maintaining regulatory compliance and safeguarding the integrity of the Philippine casino sector. The directive signals a heightened regulatory environment where continuous vigilance and adaptation to evolving money laundering and terrorism financing risks are paramount.
What This Means for Filipino Casino Operators
For Filipino casino operators, PAGCOR's July 2026 AML directive represents a significant shift towards more rigorous and data-driven compliance. It is no longer sufficient to have basic AML/CTF policies; operators must actively integrate the specific findings of PAGCOR's risk assessment into their daily operations and risk management frameworks.
This requires a comprehensive review of existing practices, investment in enhanced technology for monitoring and verification, and continuous training for all relevant personnel. Proactive engagement with these new requirements will be critical for avoiding penalties and ensuring long-term operational stability in the Philippine gaming market.
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