Philippine gaming regulator pushes AML/CTF framework review by all operators

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The Backstory

PAGCOR’s compliance push follows a wider clean-up

The Philippine gaming regulator’s order for operators to revisit their anti-money laundering and counter-terrorism financing controls did not emerge in isolation. It is the latest step in a broader reset of the country’s gambling oversight after years in which online gaming, offshore operators, junket networks and cash-heavy casino activity became politically linked with fraud, trafficking, money laundering and reputational risk.

PAGCOR’s sector risk assessment, covering 2021 to 2024, classified the gaming industry as high risk for money laundering and medium risk for terrorism financing. That finding gives the current directive its urgency. The regulator is not merely asking licensees to update paperwork. It is pushing casinos, electronic gaming operators and service providers to reassess how money enters their businesses, how suspicious behavior is detected and how senior leadership is held accountable for compliance failures.

The emphasis on junkets, VIP play, electronic gaming and remote channels reflects where regulators see the greatest vulnerabilities. High-value cash transactions and third-party customer relationships can obscure beneficial ownership and source of funds. Digital gambling adds speed, scale and, in some cases, distance between the operator and the customer. Those risks are no longer being treated as isolated weaknesses at individual companies, but as sectorwide exposure.

The POGO ban changed the regulatory baseline

The backdrop is the collapse of the Philippine Offshore Gaming Operator model. POGOs were introduced under former President Rodrigo Duterte in 2016 and expanded into a major online gambling segment serving customers outside the Philippines. Over time, the sector became associated with scam compounds, money laundering, drugs, illegal detention and human trafficking, turning what had been promoted as a revenue generator into a national security and law enforcement concern.

President Ferdinand Marcos Jr. moved decisively in July 2024, announcing an immediate ban on all POGOs, according to Inside Asian Gaming’s report on Marcos’ POGO ban. The policy set a hard deadline for existing operators to close by Jan. 1, 2025, and signaled that offshore gaming would no longer be tolerated as a licensed industry. By December, however, officials were still dealing with the wind-down, with Inside Asian Gaming reporting that 47 POGOs remained in operation as the deadline approached.

That phase-out matters for the AML/CTF directive because banning one segment does not automatically remove the financial crime infrastructure that grew around it. Payment channels, shell companies, foreign networks and technology suppliers can migrate. Policymakers have repeatedly warned that former POGO activity could reappear under different labels, including through domestic-facing online platforms or illegal sites claiming some connection to licensed operations.

Lawmakers are widening the lens to online gambling

With POGOs formally prohibited, attention has shifted to Philippine Inland Gaming Operators, or PIGOs, which serve local customers. Senate President Francis Escudero has called for PAGCOR to conduct a transparent cost-benefit review of inland online gambling, arguing that some of the harms blamed on POGOs could also appear in products aimed at Filipinos. His concern, outlined in a call for an online gambling review, is that the country banned offshore operators whose customers were foreigners while permitting domestic online gambling that directly affects Filipino households.

The debate has created a policy bind. Legal online gambling generates significant revenue for the state and gives regulators visibility over licensed operators. But lawmakers, church leaders and education officials have raised concerns about addiction, youth access and the normalization of gambling through mobile platforms. The Palace has sought to slow calls for a blanket ban, saying any major change should be based on evidence rather than political pressure. In a data-driven review of online gambling, officials pointed to the persistence of illegal e-sabong despite its ban as a warning that prohibition can push activity underground.

PAGCOR Chairman Alejandro Tengco has also warned that a total ban on online gambling could cost the government more than PHP100 billion in annual revenue. That figure shapes the stakes for the regulator’s AML/CTF action. If the government intends to preserve licensed gaming revenue, it must show that legal operators are safer, better monitored and more accountable than illegal alternatives.

Anti-POGO politics keep pressure on enforcement

The political pressure is unlikely to ease. Sen. Risa Hontiveros has pushed for an Anti-POGO Act to entrench the ban and prevent offshore-style operations from returning through legal loopholes. Her proposal, described in a renewed push for an Anti-POGO Act and regional cooperation, frames POGOs as part of a transnational criminal web rather than a domestic licensing problem. That view puts pressure on PAGCOR, immigration authorities, police and financial intelligence agencies to coordinate more closely.

Hontiveros has also called for regional cooperation through ASEAN and coordination with governments in the U.S., Australia and Europe, arguing that scam hubs and illicit online gaming networks victimize people across borders. That regional framing is important because money laundering controls at Philippine gaming operators can affect more than local compliance. Weak customer due diligence or poor reporting can allow proceeds from overseas fraud, trafficking or cybercrime to move through Philippine-regulated businesses.

The distinction between criminal operators and trafficked workers also affects enforcement. Lawmakers have warned that many people found in scam hubs may be victims rather than perpetrators. Stronger AML/CTF systems can help identify organized networks and financial flows without relying solely on raids, deportations or after-the-fact criminal investigations.

Australia offers a warning for online operators

The Philippines is not alone in tightening scrutiny of gambling-related financial crime. Australia’s AUSTRAC has taken a series of actions against major betting operators, underscoring that regulators are increasingly focused on online gambling’s speed, payment flows and customer monitoring challenges. Bet365 recently entered an enforceable undertaking after AUSTRAC found serious gaps in risk management and suspicious activity reporting, as detailed in the case involving Bet365’s AML/CTF shortcomings.

That action followed earlier scrutiny of Sportsbet, which was required to remediate deficiencies in risk assessment, customer monitoring and suspicious matter reporting. AUSTRAC later said the company had completed its remediation, according to a report on Sportsbet being cleared after prior AML/CTF control deficiencies. The pattern is instructive: regulators are not treating AML/CTF programs as static compliance manuals. They expect ongoing risk assessment, independent testing, board-level oversight and evidence that controls work in practice.

PAGCOR’s directive follows the same logic. It asks operators to distribute the risk assessment internally, revisit their controls and improve due diligence, transaction monitoring, source-of-funds checks and suspicious transaction reporting. It also puts platform and service providers on notice that their systems must support operators’ legal obligations. That widens responsibility beyond casino floors and branded websites to the technology and payments infrastructure beneath them.

The stakes are credibility, revenue and market access

For the Philippine industry, the immediate compliance burden could be substantial. Operators will need to document updated risk assessments, train staff, examine customer and junket relationships and prepare for PAGCOR examinations. Weaknesses could lead to administrative sanctions. More broadly, poor compliance could invite further legislative intervention, particularly if illegal online gambling or former POGO networks are found to be exploiting licensed channels.

The long-term issue is credibility. The Philippines wants to retain gaming revenue while distancing its regulated market from the abuses that brought down the POGO sector. That requires a convincing divide between licensed, monitored gambling and illicit operations. PAGCOR’s AML/CTF review is one mechanism for drawing that line.

If operators respond with substantive upgrades, the directive could strengthen the case for regulated gaming as a controllable industry that contributes public revenue. If they treat it as a box-checking exercise, lawmakers calling for broader bans will gain new arguments. In that sense, the current order is not just a compliance circular. It is a test of whether the Philippine gaming sector can keep its license to operate in a political environment shaped by scandal, enforcement failures and rising public concern over online gambling.