Anti-money laundering (AML) controls in the casino sector in the Philippines need to be tightened, according to an analysis report by the Philippine AML watchdog. The group pointed to the junket system, highlighting its "essential vulnerability" to money laundering and terrorist financing risks.
The Philippine Anti-Money Laundering Commission (AMLC) wrote the document in January 2023, but it became available only on the watchdog's website on Tuesday. It features an analysis of more than 7,400 suspicious transaction reports related to Casino Junket. 슬롯머신
The report identified "four notable types" of activities involving junket operators and potentially related to money laundering or terrorist financing. These were: Junket's non-reporting of transactions to casino operators in violation of existing contracts, Junket operators' participation in "criminal plots," chip purchases in microcurrency, moderate gambling practices, and conducting financial transactions that did not correspond to reported sources of funds.
The AMLC concluded that "the significant amount and value of questionable transactions involving casino junk highlights the inherent vulnerability of the junk system to money laundering and terrorist financing risks."
"The questionable transaction report submitted by the high-risk integrated resort reflects the need to tighten AML/CFT control in the casino sector," the watchdog added.
The AMLC specifically noted the risks associated with "excessive physical cash use by casino players and no reports of concealed and questionable transactions by certain casino junket operators." The group said such practices contributed to "the vulnerability of high-risk integrated resorts to money laundering risks."
In October last year, the Paris-based Special Committee on Financial Conduct released an update on the so-called "grey list" countries and regions in relation to the "strategic flaws" in the AML/CFT efforts. The Philippines was on the list.
The Financial Conduct Task Force said at the time that it should "continue to work to implement an action plan to address strategic deficiencies," including "proving that regulators are using AML/CFT controls to mitigate risks associated with casino junk."
an example of a dubious case
AMLC used two sets of data for analysis. The first set included a total of 3,308 suspicious transaction reports. From September 2018 to January 2023, we collected all reports submitted by various institutions and extracted reports containing the "junket" keyword in the descriptive field. The sample referenced a transaction comprising a total value of PHP $17.79 billion ($325.8 million).
The second data set is a total of 4,110 suspicious transaction reports, with local authorities at "highest risk" for money laundering or terrorist financing, referring to reports submitted by four integrated resorts in the Philippines from December 2021 to September 2022. The names of the four properties have not been released. The second sample mentioned a transaction with a total value of PHP of $17.59 billion.
The AMLC document detailed some case studies of suspected money laundering within the Philippines based on questionable transaction reports collected. These are examples of junk activity identified in the process. The watchdog's report did not disclose people or any of the entities involved in the case study.
Two cases were said to be tied to junket operators that had not fulfilled their obligations under the Philippines’ Anti-Money Laundering Act of 2001. The cases involved the same casino. Each of the junkets was found to be submitting daily reports to the casino operator stating they had not recorded any suspicious transactions during their activities at the property. But internal investigations by the casino operator eventually revealed a series of reportable transactions made by several individuals, and that had not been included in either junkets’ daily reports.
Neither of the junkets furnished the casino operator with an “explanation or reason” for its failure to declare these transactions, stated the AMLC document.
Another case featured in the AMLC document related to purchase of chips with small-denomination currency, followed by modest gambling actions. It referred to a Malaysian player that had purchased gaming chips totalling PHP1.5 million, using for that 14,970 PHP100 bills and three PHP1,000 bills. After gambling for about two hours, he “proceeded to the cage where he attempted to redeem PHP1.04 million but cancelled the transaction after realising he would be refunded with his original PHP100 bills”.
The player eventually “went to a separate cage a few minutes later and successfully redeemed PHP0.25 million”, stated the report. The document added that the individual returned to the property the following day and used PHP1.1 million in funds to win a total of PHP1.31 million. The earnings were eventually transferred to a cage linked to a junket operator.
“Notably, [the player] was previously the subject of five similar suspicious transaction reports that were submitted to the AMLC”, noted the document. But there was “no other information available” on the player that could help identify the source of the money the person used for gambling, the watchdog’s report noted.