AMLC flags P14 billion suspicious transactions in online casinos  

MANILA, Philippines — Some P14 billion suspicious transactions involving the internet-based casino sector were recorded between 2013 and 2019, according to an analysis conducted by the Anti-Money Laundering Council (AMLC).

Based on the detailed analysis in the AMLC’s 2020 internet-based casino sector risk assessment, a total of 1,031 suspicious transaction reports (STRs) were filed during the seven-year period.

The AMLC said the year-on-year assessment of the STRs showed a sporadic trend that peaked in 2016 with 332 suspicious transactions worth P8.76 billion.

The financial intelligence unit also noted an upward trend between 2013 and 2016 followed by a relative decline beginning 2017 until 2019.

After peaking in 2016, the number of STRs declined steadily to 306 in 2017, 257 in 2018, and 63 in 2019. In terms of value, P1.47 billion was booked in 2017 that increased to P2.63 billion in 2018 before declining to P494.45 billion.

According to AMLC, majority of the STRs filed in terms of volume are based on the suspicious circumstance of “no underlying legal or trade obligation, purpose, or economic justification that accounted for 565 or 55 percent of the total reports filed valued at P4.07 billion.

In terms of value, it said violations of the Electronic Commerce Act of 2000 ranked at the top with P4.94 billion or 35 percent of the total value of the STRs.

The analysis covered gaming laboratories (GLs), interactive gaming licensees (IGLs), interactive gaming support service providers (IGSSPs), Philippine offshore gaming operators (POGOs), and service providers (SPs).

Service providers landed the top spot in terms of the number of STRs with 957, followed by POGOs with 28, IGLs with 23, IGL/IGSSPs with 18, and IGSSP with five.

The report showed 43 out of 217 SPs figured in 957 STRs with estimated transaction values of P7 billion, cornering majority of internet-based casino sector-related STRs both in volume and peso value.

One entity functioning both as an IGL and IGSSP with 18 STRs got the second largest chunk in terms of value with P6.3 billion.

The AMLC concluded that POGOs and IGLs pose a lesser threat compared to their service providers.

“This is supported by the number of STRs (888 or 86.1 percent of the total count) associated with the service category. Moreover, while the presence of 57 entities categorized as IGL, POGO, and service providers (comprising IGSSP and SP) in the STRs used showed that nearly all internet-based casino sector categories have exposure to possible suspicious financial activities,” it said.

According to AMLC, this suggests that suspicious financial flow seats highly on domestic participants of the sector.

The financial intelligence unit also observed that majority of the transactions are domestic in nature, largely involving cash deposit/withdrawal, check deposit, and incoming/outgoing remittances.

“The emergence of cash-related transactions is of particular concern. Considering the nature of business of the internet based casino sector, that is the use of online technology for its platform, the substantial flow of cash is a likely deviation from its business model,” AMLC said.

In addition, the statistics on cash deposits and withdrawals are consistent with the inherent risk of cash transactions for money laundering purposes as transacting in cash tends to obscure the audit trail. Identifying the ultimate source and beneficiary of funds becomes challenging.

The AMLC emphasized that covered persons should consistently employ safeguards in detecting unusual flows associated with this sector and immediately report transactional or behavioral deviations of its clients who are determined to be part of the internet-based casino sector to the AMLC.

Various typologies and suspicious indicators involving drug trafficking and related offenses, Electronic Commerce Act of 2000 violations, fraud such as swindling, among others, were also captured in the report.

Global dirty money watchdog Financial Action Task Force (FATF) has given the Philippines until January next year to address strategic deficiencies in its regimes to counter money laundering, terrorist financing, and proliferation financing.

The Philippines was included in the gray list or list of jurisdictions under increased monitoring by the FATF in June last year.