Casinos amenable to inclusion in AMLA

The Philippines’ gaming regulator welcomed a proposal to include the casino industry in the coverage of the Anti-Money Laundering Act, which will likely be toughened in the wake of the biggest hoard of dirty money reported to have entered and left the country last month.

At the same time, however, Philippine Amusement and Gaming Corp. chair Cristino Naguiat Jr. called on lawmakers and the financial community to help improve the control mechanisms in the banking system through which casino-bound funds of gamers are coursed.

“”The inclusion of casinos among the establishments monitored for money laundering activities would not have prevented the systemic failure at the bank level because banks are the primary gatekeepers against illegal transactions,” Naguiat told reporters after Tuesday’s Senate hearing on the $81-million money laundering activity.

The Anti-Money Laundering Act excluded casinos from the list of covered institutions that authorities could examine to root out dirty money. At the hearing, senators pointed out that the Senate included a provision in the revised anti-money laundering bill, but that this was deleted by pro-administration lawmakers in the House.

Naguiat added that most existing casino operators and potential investors were already being covered by similar anti-money laundering laws in their headquarters’ home countries, hence it would not make much difference if they would again be covered by the Philippines’ AMLA.

Naguiat noted that during previous discussions on amendments to the AMLA in 2013, casinos were amenable to their inclusion but only had issues on the threshold. “Will it be per bet or all transactions the whole day?” he said.

Naguiat said industry players were open to AMLA coverage as long as such would be in line with global industry standards.

At the same time, the Pagcor chief pointed out that the local casino industry has existing safeguards to deter laundering attempts, including a requirement that all fund inflows be converted into chips and played at the betting tables where would-be launderers would risk incurring losses.

Naguiat also said that all winnings in casinos were recorded by Pagcor and could easily be accessed by the government.

Given the fact that banks preceded casinos in the funds flow chain, Naguiat said it was the responsibility of banks to ascertain that funds coming out from the banking system came from legal sources as mandated by law.

Amid the finger pointing between the banking and casino industries over who was to blame for the money laundering scandal, the Pagcor chair said he welcomed proposals to have closer scrutiny of the gaming industry and stressed that they have always cooperated with the Anti-Money Laundering Council in probing suspected laundering activities.

Hackers recently diverted about $81 million from the Bangladesh Bank’s account with the Federal Reserve Bank in New York to the Philippines. The amount was channeled into four fictitious bank accounts in Rizal Commercial Banking Corp.’s (RCBC) Jupiter Street branch in Makati City, converted into the local currency by a foreign exchange dealer and an estimated $50 million was then moved to a number of local casinos while the rest was withdrawn in cash.