PAGCOR tightens anti-money laundering rules

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The Backstory

Digital growth put compliance gaps under pressure

PAGCOR’s latest anti-money laundering changes fit into a broader regulatory reset in the Philippines, where rapid online gambling growth has forced officials to tighten controls across payments, advertising, player verification and operator conduct. The regulator’s decision to bring banks, digital banks, non-bank financial institutions and e-money issuers more directly into its oversight network reflects a recognition that gambling supervision can no longer stop at the operator level.

The shift has been building for months. PAGCOR Chairman and Chief Executive Alejandro Tengco has said the expansion of igaming exposed weaknesses in rules designed for a more venue-based industry. Those weaknesses became more visible as players moved to e-wallets and other digital payment channels, creating faster transaction flows and more complex monitoring obligations. Earlier regulatory steps, including stricter know-your-customer checks and new advertising restrictions, showed that PAGCOR was moving from growth management to risk containment.

That change matters because the Philippines is trying to preserve a legal online gambling market while distancing it from the scandals associated with offshore gambling, financial crime and consumer harm. The updated framework is not an isolated technical amendment. It is part of a wider effort to make licensed online gambling more defensible to lawmakers, banks and international compliance bodies.

Payments became the central risk point

The most direct precursor to the new rules was PAGCOR’s recent push to make payment flows more traceable. In a related move, the regulator said it had already delinked e-wallets and some payment channels as part of stricter responsible gaming controls for online play. Tengco acknowledged that the changes contributed to softer third-quarter revenue, but said they were needed to align the market with global compliance standards.

The updated anti-money laundering framework extends that logic. By relying more heavily on Bangko Sentral ng Pilipinas-supervised institutions, PAGCOR is placing payment processors inside a more formal compliance chain. Banks and e-money issuers already face financial-sector supervision, but the memorandum clarifies how their gambling-related activities may trigger Anti-Money Laundering Council obligations and potential penalties.

The move also streamlines accreditation, allowing applicants to submit a Bangko Sentral ng Pilipinas-issued license and fit-and-proper compliance proof instead of undergoing duplicative PAGCOR checks. That is a practical concession to regulated financial firms, but it also raises the stakes for institutions that service gaming operators. If payment providers are part of the transaction infrastructure, regulators are signaling that they are also part of the risk-control system.

The ban on credit cards and cryptocurrencies for wagering, announced as part of the responsible gaming package, points to the same concern. Credit cards raise risks tied to excessive borrowing and impulsive gambling, while cryptocurrencies complicate source-of-funds reviews. Together, the measures show that PAGCOR is trying to narrow the channels through which gambling money enters and leaves the system.

Lawmakers pushed for a tougher financial crime regime

Regulatory pressure has also come from Congress. Senator Joel Villanueva filed Senate Bill No. 1983 to update the country’s Anti-Money Laundering Act for digital transactions and cybercrime, including by adding online casino operators to covered entities. The proposal, detailed in an anti-money laundering overhaul targeting Philippine online gambling operators, would expand the powers of the Anti-Money Laundering Council and impose tougher customer due diligence and reporting obligations.

The bill reflects a political view that the existing AML framework has not kept pace with digital finance. Online gambling platforms process large volumes of transactions, often through wallets and other nontraditional channels. That makes them attractive not only to legitimate players but also to criminal networks seeking to layer and move funds quickly.

Villanueva’s proposal would give enforcement authorities more tools, including administrative freeze powers, subpoenas and faster court processes. It also would introduce stricter penalties for non-compliance and new data security requirements. Even before enactment, the measure has helped shape the regulatory environment by putting online gambling operators on notice that financial crime compliance is becoming a legislative priority, not merely an agency preference.

The involvement of the Presidential Anti-Organized Crime Commission and the Cybercrime Investigation and Coordinating Centre in offshore gambling enforcement has added another layer of pressure. The message from government agencies is increasingly coordinated: gambling, digital payments and cybercrime are now viewed as overlapping risk areas.

Offshore gambling scandals changed the politics

The crackdown has been sharpened by the legacy of Philippine Offshore Gaming Operators, known as POGOs. The sector was formally renamed Internet Gaming Licensees in October 2023, according to Inside Asian Gaming reporting on the licensing change, but the rebranding did little to ease public concern. Offshore operators had been linked to criminal activity, foreign-facing gambling operations and weak oversight.

Those concerns escalated after President Ferdinand Marcos Jr. ordered a ban on POGOs with immediate effect, a move Inside Asian Gaming reported in July 2024. The ban, effective from Jan. 1, 2025, marked a political break with a sector that had generated revenue but also exposed the government to reputational and law enforcement risks.

The allegations against former Bamban Mayor Alice Guo further hardened the environment. The Department of Justice approved the filing of 62 money laundering counts against Guo and 31 others tied to a POGO hub in Tarlac. The case, described in charges against Alice Guo over gambling-related money laundering, also involved alleged love scams, investment scams, crypto scams and qualified human trafficking.

For PAGCOR, the Guo case underscored the risk that gambling entities can become gateways for broader criminal ecosystems. Even when legal online gambling is separate from the banned offshore model, public trust has been damaged. That makes stronger AML rules essential to maintaining a distinction between licensed domestic-facing platforms and the former offshore operators associated with criminal allegations.

Consumer protection and market legitimacy now overlap

PAGCOR’s compliance agenda has not been limited to money laundering. The regulator has also moved against consumer harm and aggressive marketing, both of which affect the industry’s political durability. At a Senate Committee on Games and Amusement hearing, PAGCOR said it was studying whether to extend gambling advertising bans beyond existing primetime restrictions and had strengthened identity verification for players. Those measures were outlined in PAGCOR’s broader tightening of online gambling rules.

New players must now submit identifying details, a government-issued ID and a real-time selfie before depositing funds. The goal is to prevent fake or borrowed identities, a recurring concern in Senate hearings. PAGCOR also has worked with the Ad Standards Council to police gambling promotions on social media and other online platforms, while preparing expanded safer gambling tools, including self-exclusion and accredited treatment centers.

The launch of a 24-hour national helpline and cooperation with the Seagulls Flock Organization widened the regulator’s remit from licensing and tax collection to harm reduction. That shift is important because AML compliance and responsible gambling increasingly reinforce each other. Stronger identity checks help detect suspicious transactions, while payment limits and self-exclusion tools can reduce both consumer harm and abuse by bad actors.

The latest AML amendments therefore reflect a convergence of priorities. PAGCOR is trying to satisfy financial regulators, reassure lawmakers, protect consumers and keep the legal online gambling market viable. The stakes are high: failure could invite stricter legislation, banking resistance or renewed calls for broader prohibitions. Success would allow the Philippines to argue that it can regulate digital gambling without repeating the failures of the POGO era.