The Philippines is bullish on exiting the FATF grey list this year. To that end, the country’s president, Ferdinand R. Marcos Jr has asked all government agencies to fix the regulatory shortcomings identified by the Financial Action Task Force.

According to reports, Marcos’ directive was communicated to agencies during a recent meeting. During that meeting, the President highlighted the economic importance of exiting the grey list. For reference, the Philippines originally had to convince the FATF that it should be removed from the grey list by January 2023. However, this period was extended by 12 months, providing the country with more time to address its shortcomings.

Matthew David, the executive director of the Anti-Money Laundering Council (AMLC) Secretariat, commented on the matter, saying that the President has “reiterated the government’s commitment” to addressing the deficiencies identified by the FATF.

David confirmed that the country hopes to address all of the points made by the task force in 2024 and trigger the country’s exit from the grey list by the end of the year. According to him, 10 of the 18 deficiencies identified by the FATF have already been addressed. The remaining eight are currently being addressed or not yet addressed.

David admitted that the Philippines still needs to properly tackle terrorism financing.

The Philippines Is Optimistic about Its Exit

While there is a lot more work to do, David said that the Philippine government believes that it is on the right track. According to him, the President is very content with the work of the AMLC.

In his interview with the Philippine News Agency, David said:

Our goal is to eventually exit the grey list. There are repercussions for being in the grey list because the longer we are in the grey list, the bigger the possibility or the higher risk that we will enter the black list.

Matthew David, exec director, AMLC Secretariat

In October, the Philippine government published Memorandum Circular No. 37, ordering 44 government agencies to work on addressing the 18 deficiencies outlined in the FATF’s report. A number of authorities, including the PAGCOR, were thus required to step up their AML efforts.

In line with its efforts to strengthen its regulations, the Philippines also joined forces with China to crack down on illegal offshore operators in the country. This followed a joint action between the two countries that resulted in the repatriation of 400 Chinese nationals.

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The Philippine authorities continue the crackdown on Philippine Online Gaming Operator-related crime. Previously, authorities busted an illegal POGO operation that was involved in human trafficking and found that a number of local police workers may have been involved.

In the wake of the raid, the Philippine Department of Labor and Employment (DOLE) will undergo a thorough assessment of the Alien Employment Permits (AEPs) which allow foreigners to work for local gambling operators and companies.

As a result, the DOLE will look into as many as 42,000 foreigners working for POGO companies and take punitive action if it learns that some of them are involved in crime. The department warned that people who have participated in fraudulent activities risk the cancelation of their AEPs or even prison time.

Senate Members Proposed Blanket Ban on POGOs

The action comes amid intense calls for a crackdown on POGOs and the review of AEP workers. The Philippine Senate recently underscored the importance of a blanket ban on offshore operators.

Senator Joel Villanueva slammed the POGOs, saying that these companies should not be allowed to operate and freely offer their services when their licenses have been revoked. The head of the Senate Committee on Ways and Means, Sherwin Gatchalian, on the other hand, said that POGOS should be kicked out from the Philippines as soon as possible.

The Philippines has a serious problem with AEP-related fraud as foreign criminals would oftentimes obtain their permits illegally and then buy a password. This creates a dangerous internal threat for the Asian country and has prompted the authorities to act.

Incidents often involve illegal gambling, human trafficking and gun crime and sometimes end in killings. A recent attack, for example, left two people dead and one severely injured. Authorities believe that the attack might also be related to POGO-related crime.

In the meantime, the Philippine government continues its efforts to exit the FATF grey list.

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Philippines casino operator cum gambling regulator, PAGCOR intends to come on board with an online casino for denizens there as early as the first quarter of 2024. The announced name is Casinofilipino. Casinofilipino.ph is the home page for a variety of large and small land-based casinos and dozens of satellite operations already in use by PAGCOR.

Casinofilipino.com is “taken” but parked free on Godaddy with servers based at Amazon for the last 90 days or so but was served by Google LLC for the three years prior.

Familiar Brand Name to Drive Local Traffic

It’s unclear which top-level domain will be used to serve players in the Philippines their first legal online games beginning next year. However, during the opening ceremony of the SiGMA Asia Summit 2023 at the SMX Convention Center in Pasay City on July 20, 2023, PAGCOR Chairman and CEO Alejandro H. Tengco referred to the dot com site in his keynote address according to information on the regulator/operator’s website.

The CEO explained some reasons for the launch, the main one being to raise revenue.

“This will bring several benefits and opportunities such as increased revenue, extended reach and market expansion, cost efficiency, and enhanced customer engagement,” Pagcor’s Tengco said. Launching the online casino would allow for additional revenue.

“It will allow players to interact with the digital counterparts of traditional casino games. This will also transcend physical boundaries and will enable users from around the world to interact and participate in virtual environments.

“It can reach a global audience and can establish a presence in virtual communities of avid gamers. It will likewise offer an opportunity to tap into new markets and diversify its customer base.”

As part of PAGCOR’s plans to modernize operations, changes will also be made at its land-based venues. Slot machine ops have already undergone the beginnings of modernization according to Tengco, which he said brings hope to continue the trajectory with at least 3,500 new machines being installed in its multitude of land-based venues.

“We endeavor to enhance our game offerings by replacing our old machines with a total of 3,500 brand-new units under a lease agreement with the manufacturer,” said the CEO.

He added inter alia, “We have already taken the preliminary steps and entered into negotiations with different manufacturers for the modernization of our slot machines. I expect our customers to have a renewed gaming experience.”

Casino Management System to be Revamped as Well

“This will play a pivotal role in improving Pagcor’s casinos in terms of operational efficiency, enhancing customer experience, facilitating real-time reporting and analytics, ensuring security and fraud prevention, optimizing financial management, and streamlining compliance requirements,” Tengco said.

Prior to announcing the upcoming money-making venture into cyber-space, the agency had launched a major crackdown on locally-based online gambling service providers without regard to the location of customers the alleged violators were serving. In early May over 1,000 human trafficking victims were rounded up and repatriated to their home countries when the Sun Valley Hub in Clark was raided.

Over 1,000 human trafficking victims were rescued from the government-owned buildings in the early-May raids, with about a dozen perpetrators being arrested. In response to that news, Philippine senators renewed calls to entirely eliminate POGOs (online operator-licensed companies).

CGC Technologies was the first POGO to lose its license as a result of the raid followed by every other operator at the hub at month’s end in one fell swoop by pulling a provisional license that allowed occupants to offer service. In addition to human trafficking, crypto scams were widely cited as a reason to end the POGOs.

Nearly 500 of the trafficking victims haled from Vietnam and have been sent home. At the time, Chairman Tengco stated that job seekers should “check the credibility of the companies that they are applying in. By going the extra mile, they can protect themselves from possible scams and human trafficking activities.”

Inside the Clark Freeport Zone are only four remaining accredited service providers and one licensed offshore gaming operator.

In early June the regulator joined the newly created Clark Security Advisory Council, just prior to its first meeting. The inter-agency organization aims to curb all illegal offshore gaming activities within the Clark Freeport Zone in Pampanga.

During the Council’s launch on June 9, 2023, Atty. Jessa Fernandez, PAGCOR Assistant Vice President for Offshore Gaming Licensing announced that it will impose heavier sanctions on all licensed offshore gaming operators and accredited service providers who stray from the rules.

Revenues Recover from COVID Disruption

During his keystone address at the most recent event, Tengco noted the post-pandemic revenue story for PAGCOR:

“For the first half of this year, I am proud to share with you the figures we have generated so far. Our total income from gaming operations from January to June of 2023 has reached P34.125 billion. Of this amount, PAGCOR’s contributions to nation building also rose by 48.50% — from P15.23 billion in the first half of 2022 to P22.62 billion this year,” he said.

Tengco said that with the agency’s consistent upward revenue trend, it is highly possible for PAGCOR to reach or even surpass its pre-pandemic income by the end of 2023.

Source: PAGCOR to launch own online casino in 1st QTR of 2024, eyes modernization of slot machine operations, Gov.PH, July 20, 2023

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PAGCOR, the country’s regulator, has conducted a series of operations that have focused on clamping down on such activities, with the latest taking place in Las Piñas City in Metro Manila where the Philippine National Police raided a business and ordered an offshore gaming service provider to stop business with immediate activity.

Clamping Down on the POGO Sector Harder

According to a statement issued by authorities and cited by local media outlets, the business in question has to do with Xinchuang Network Technology, Inc. The business is allegedly involved with what the regulator and police suspect is both human trafficking and cryptocurrency scams.

The latter usually takes place in the form of “pig-butchering scams.” In those cases, a victim is approached by a pretend romantic partner. The fake partner continues to ask the victim for money until they cannot pay any longer. PAGCOR said that it had been tipped about the potential offenses and had surveilled the company’s offices for a month before conducting an operation last week.

The operation was a success with police authorities retrieving a staggering number of people – some 1,534 nationals hailing from the Philippines and 1,000 nationals from the region, including countries such as Singapore, Taiwan, China, Vietnam, Indonesia, Malaysia, and Thailand. The country has had more than 41,000 illegal arrests in 2023 so far.

During the raid, authorities seized a number of electronic devices and documentation owned by the company and potentially used in the purported scams. PAGCOR chairman and CEO Alejandro H. Tengco welcomed the efforts of law enforcement and his own colleagues.

“As we have always said before, PAGCOR will not hesitate to impose sanctions on erring licensees and accredited service providers,” H. Tengco said.  The official said that PAGCOR will continue to work actively with authorities and police to ensure that its businesses are protected.

POGOs, an Ongoing Apple of Discord in the Region

The series of recent regulatory moves have to do with a toughening on the overall stance into Philippine Offshore Gaming Operations or POGOs which have been coming under a lot of heat from the regulator, but also regional countries’ governments, most prominent amongst which has been that of China.

The Philippines was recently associated with an illegal gambling website which has opportunistically stolen the domain name that was originally intended to celebrate American history in the United States but was hijacked and used to promote dangerous gambling operations instead.

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Lawmakers in the Philippines are intensifying their focus on offshore gambling operators, commonly known as POGOs, and their regulatory bodies as they aim to crack down on the expanding web of cryptocurrency scams and the associated human trafficking networks.

During a recent inquiry held by the Philippine Senate Committee on Women, Children, Family Relations, and Gender Equality, attention was drawn to a raid conducted in early May at an approved POGO site located near the capital city, Manila. The operation resulted in the rescue of over a thousand victims of human trafficking from various Asian countries.

At the hearing, senators vehemently criticised officials from the Philippine Amusement and Gaming Corporation (PAGCOR), the regulatory authority overseeing online casinos in the nation.

Senator Sherwin Gatchalian expressed his concern over the international embarrassment brought upon the Philippines.

“This casts a negative light on us as the country becomes a hub for scams,” he said.

“POGOs are being exploited as fronts for fraudulent activities and human trafficking due to corruption within PAGCOR and its failure to fulfil its responsibilities.”

The victims involved in this particular case were trafficked from eleven Asian countries. One survivor, identified as Jason, whose real identity and nationality have been withheld for safety reasons, shared his experience with Voice of America (VOA) after providing testimony before the Senate committee.

Jason revealed that he had arrived in the Philippines under the impression of securing a legitimate marketing position, only to be coerced into executing cryptocurrency scams targeting American and Canadian men, posing as a woman.

Jason disclosed to VOA that when PAGCOR inspectors visited the POGO site on a weekly basis, approximately half of the trafficking victims would hide within the dormitories, drawing the curtains and locking the doors out of fear.

Senator Risa Hontiveros, the committee’s chairperson, has called for the banning of POGOs, emphasising that they serve as a legal facade for illicit hubs that evade regulatory scrutiny. She warned that if POGOs were allowed to continue operating unhindered, the prevalence of crypto-scams and human trafficking would escalate at an alarming rate, surpassing the government’s ability to combat them effectively.

During the hearing, PAGCOR officials acknowledged the presence of corruption within their organisation and conceded the need for enhanced regulations and monitoring. They also confirmed the immediate revocation of accreditation for the raided POGO site.

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The company has teamed up with Jade Gaming, a company operating out of the Philippines. This deal is now part of Velvix’s overall strategy to grow its presence in the country’s market, but also expand to Vietnam.

Velvix is seeing the two countries as an important part of its Asian pivot after the company managed to gain a strong footprint in the United States and is likely to continue growing there. An initial product catalog is expected to go live in June, with further expansions to come over the next months.

Commenting on the company’s current plans and successes, Velvix VP Amy Jiang said that the North American success gives the company a strong reason to believe that the same business strategies can be levied in Asia, particularly in the Philippines and Vietnam:

The Asian Pacific region has demonstrated remarkable growth in recent quarters, surpassing even the most optimistic expectations. We strongly believe in the resurgence of Asian gaming and are thrilled to be part of it by launching Velvix in The Philippines and Vietnam.

Velvix VP Amy Jiang

Jiang similarly hailed Jade Gaming and the company’s significance in helping Velvix reach new audiences and establish a robust product footprint that will be useful to the company’s grander strategy in these Asian markets and possibly others.

Velvix is serious about the future of its products and gaming machines, with the company already operating a research and development office in Sydney, Australia. Velvix focuses on different products, investing in both Class III slot machine titles that come as linked progressive and standalone game variations.

Innovative Developer Committed to Expanding Its Global Presence

For the time being, Velvix remains an up-and-coming company that is focused on expanding its reach across new jurisdictions rapidly. The company attended the IGA 2023 show in San Diego, California, with the team on the ground and looking to analyze and secure new business opportunities.

The company has also expanded its fleet of games at a good clip, announcing innovative products such as a Keno-themed slot back in March. Velvix holds certifications from BMM and international regulators, demonstrating its commitment to creating products that meet industry standards at the highest level.  

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The Philippine gaming regulator PAGCOR has cancelled the accreditation of offshore gaming customer relations service provider CGC Technologies after an investigation.

CGC, an accredited service provider operating under the offshore gaming licensee Oriental Game Ltd, had its accreditation revoked after an investigation revealed it engaged in criminal activities.

PAGCOR confirmed CGC was engaged in criminal activities and had breached certain conditions associated with its accreditation. The investigation revealed that CGC was operating six buildings within the Sun Valley Business Hub in Mabalacat, Pampanga, despite only two of them being accredited by PAGCOR.

Read more: Philippines online casinos

“The company was embroiled in various allegations, including credit card fraud, serious illegal detention, and human trafficking activities,” PAGCOR stated.

The cancellation of the accreditation comes within a week of issuing a stern warning to offshore gaming licensees and accredited service providers involved in illegal activities.

In addition to the cancellation order, CGC’s performance bond was also forfeited with immediate effect. Oriental Game Limited, the offshore gaming licensee, was also fined $350,000.00 for its failure to ensure the legitimate operation of CGC’s business.

Chairman and CEO of PAGCOR Alejandro Tengco warned the continued operation of the CGC after the cancellation of its accreditation was illegal and would not be condoned.

“Continued operations despite the cancellation of their accreditation or licences shall be considered illegal. Immediate action will be taken against those who are engaging in such behaviour,” Tengco said.

“PAGCOR strongly advocates responsible gaming to curb all forms of social ills linked to gaming.

“This is the reason why we continue to forge close partnerships with other government agencies.

“Through proper regulation and cooperation with our law enforcement agencies, we will continue to ensure that revenues from regulated gaming will be used for more worthy causes, especially nation-building.”

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The study’s broader scope is an attempt to better understand the money laundering and terrorist financing failings in the casino sector, and specifically the junket sector. The majority of those originate in casino junket operators, the AMLC argues, with the study flagging multiple transactions that should have been reported but hadn’t.

Junket Operators Feed Operators Wrong Data

Essentially, the AMLC contends that junket operators have not been flagging and reporting all issues with relevant parties, in this case, their casino partners, allowing suspicious transactions to clear, and potentially breaking AML and CFT controls in the industry as they failed to disclose the transactions. The AMLC has stopped short of publicly naming the offenders but argued that junket operators linked to prominent resorts had been found to underperform insofar as this was concerned.

Junkets have been a particularly hot topic in Asia. After the near-blanket ban on junket operators in Macau, other jurisdictions have started taking the matter more seriously. Some junket operators tried to blindside their partner casinos by issuing blank reports and claiming that they had not detected any suspicious transactions whatsoever.

However, casinos which did the snooping on their own discovered discrepancies in the report. One particular property used CCTV to establish that there seemed to be large volumes of cash being exchanged which the junket had failed to flag as suspicious. The junket of that particular casino argued that it was a genuine mistake rather than a premeditated act.

Regardless, the suspicion remains. In the particular case cited above, the AMLC claims that the casino was able to nevertheless submit 507 Suspicious Transaction Reports, indicative that the operator was determined to ensure that it complies with AML and CFT rules.

AMLC Says Operators Need to Hold Junkets Accountable

There are ways to counter such bad practices, however. The AMLC insists that should casino operators want to, they can monitor their relationship with junkets and ensure that they impress upon the junkets that reporting of suspicious transactions must happen accurately and transparently.

One of the most serious issues discovered by the AMLC remains the exchange of physical cash on casino floors, which casinos would have to work to tackle actively by raising the stakes for junket operators who may be turning a blind eye to paying customers who could be breaking AML and CFT rules.

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Billionaire Enrique Razon Jr. is expanding his casino resort presence throughout the Philippines as Bloomberry returns to profitability following the relaxation of COVID-19 restrictions after a two-year period.

Razon announced this during Bloomberry’s full-year 2022 earnings call last week. He said the group would commence an expansion drive in the Philippines due to the strong gaming revenue generated at Solaire and other casinos, which is the driving force behind the forthcoming growth.

The company’s gross gaming revenue rose by 30% to 6.9 billion pesos, resulting in a net profit of 679.4 million pesos for the quarter ending on March 31 – a significant turnaround from the 780.8 million loss reported during the same period last year.

According to a regulatory filing on Thursday, Bloomberry, the operator of the Solaire casino resort in Manila, has agreed to purchase 2.8 million square metres of waterfront properties in Ternate, Cavite, for 7.55 billion pesos (US$144.6m) from a group of landowners, including Boulevard Holdings and Puerto Azul Land. 

“For the first time in eight quarters, we recorded positive net earnings on growth driven by our domestic mass gaming segment,” Razon, chairman and CEO of Bloomberry, said in a statement.

“Business and pandemic conditions permitting, we look to sustain the recovery for the rest of the year.”

The purchased property will be transformed into an integrated resort and entertainment complex that will include a casino, hotel, and golf course, as well as commercial and residential buildings. Bloomberry stated that the project will commence after the Solaire casino resort in Quezon City, located in northern Metro Manila, begins operating.

Razon has in recent years increased his investments in utilities and currently holds a controlling stake in the global port giant International Container Terminal Services Inc. Additionally, in June 2021, his infrastructure-focused subsidiary, Prime Strategic Holdings’ Trident Water, acquired control of water utility Manila Water from Ayala Corp.

As per Forbes’ real-time data, Razon’s net worth is US$6.3 billion.

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