FINANCIAL transactions involving casino junket operators (CJOs) pose elevated money laundering risks, the Bangko Sentral ng Pilipinas (BSP) said as it issued new guidance outlining red flags and best practices for handling such clients.
“Financial transactions linked to CJOs can pose elevated money laundering risks,” central bank Deputy Governor Lyn Javier said on Tuesday.
“We identified the best practices and red flags BSFIs (BSP-supervised financial institutions) need to watch out for to be strong partners in our shared goal of curtailing crime and safeguarding the integrity of the financial system,” she added.
BSFIs were directed to consider a newly issued guidance paper in enhancing their anti-money laundering and counterterrorism financing frameworks and risk management practices for customers engaged in casino junket operations.
Casino junket operators arrange gaming tours that bring foreign high rollers to licensed casinos in the Philippines under agreements with casino operators. Since they facilitate large financial transactions, the sector has long been viewed as vulnerable to money laundering and other financial crimes.
The BSP cited findings from an Anti-Money Laundering Council (AMLC) study released in 2023, which showed that universal and commercial banks accounted for 71.6 percent of suspicious transaction reports involving casino junkets while land-based casinos represented 60.6 percent.
Several common schemes were identified, including transactions inconsistent with customers’ declared sources of funds, the involvement of junket operators in criminal conspiracies, violations of junket agreements and the purchase of casino chips using small-denomination cash followed by minimal gambling activity.
The BSP said that vulnerabilities were heightened by the cash-intensive nature of junket operations, cross-border transactions, limited transparency over the identities and funding sources of high-roller clients, the use of intermediaries and the practice of casinos safekeeping gaming chips.
In reviewing selected universal, commercial and thrift banks with significant exposure to casino junket operators and players, the BSP found varying levels of risk appetite.
Some institutions prohibited relationships with such customers while others allowed these under specific conditions or fully accepted them subject to enhanced monitoring. Most banks were said to classify casino junket operators as high-risk clients and subjected them to enhanced due diligence during customer onboarding and transaction monitoring.
The BSP review found that physical cash and checks remained the dominant means of moving funds into and out of junket operations.
Typical fund flows include time deposits and check deposits between banks, transfers between casinos and the personal accounts of financiers, players and junket operators, as well as foreign exchange transactions involving casinos and money service businesses.
The BSP noted that banks had already adopted several good practices, including filing suspicious transaction reports, using automated systems to detect unusual or structured transactions, reviewing or closing accounts deemed high risk, conducting link analysis to identify related customers and participating in the AMLC’s public-private partnership for information sharing.
However, the central bank said further improvements were needed.
“Certain areas require further enhancements to reinforce risk management measures in dealing with CJO clients,” it said.
Among its recommendations, the BSP urged financial institutions to develop dedicated risk management frameworks specifically for casino junket customers rather than relying solely on broader policies covering casinos or gaming businesses.
Banks were also encouraged to strengthen customer onboarding procedures by verifying casino accreditations, Philippine Amusement and Gaming Corp. (Pagcor) approvals and junket agreements, reviewing ownership structures and beneficial owners, expanding screening against sanctions and adverse media databases, and improving staff training on junket business models and associated risks.
To help banks identify suspicious activities, the BSP outlined several red flags observed during its review.
These include frequent large cash deposits and withdrawals without legitimate business justification, multiple companies sharing addresses or ownership structures in casino hubs, the use of shell companies or unrelated businesses to conceal junket activities, rapid transfers between casino-related accounts and the use of checks or inter-account transfers to move funds without clear economic purpose.
“It is important to take collective efforts to effectively address these challenges and risks associated with casino junket operations,” the BSP said.
“Enhanced coordination and information sharing among supervising authorities particularly Pagcor, the BSP and BSFIs is critical, with supervisors playing a proactive role in guiding institutions, setting clear expectations, conducting targeted oversight and providing feedback to strengthen risk mitigation measures,” it added.
