BSP tightens safeguards for casino junket transactions

By Francis Allan L. Angelo

The Bangko Sentral ng Pilipinas has directed financial institutions under its supervision to strengthen safeguards against money laundering, terrorism financing, and proliferation financing risks involving customers engaged in casino junket operations.

Casino junket operators are companies or individuals that arrange gaming-related services for high-value patrons, including travel arrangements, credit extension, and gaming-room bookings.

The BSP set out the safeguards in its guidance paper, “Risk Management Practices for Customers Engaged in Casino Junket Operations,” which the Monetary Board approved through Resolution No. 598 on July 2, 2026.

The central bank issued the guidance under Memorandum No. M-2026-037 dated July 9, 2026.

The paper seeks to prevent BSP-supervised financial institutions, or BSFIs, from being used as channels for money laundering, terrorism financing, proliferation financing, and other illicit activities.

Proliferation financing refers to funding the development and spread of weapons of mass destruction.

The guidance identifies warning signs linked to casino junket operations, including unusual cash movements, complex corporate ownership structures, and layered transactions.

Layered transactions involve a series of fund transfers or financial activities that may conceal the source, ownership, or movement of money, making its underlying purpose or origin more difficult to determine.

“Financial transactions linked to CJOs can pose elevated money laundering risks,” said Deputy Governor Lyn I. Javier. “We identify the best practices and red flags BSFIs need to watch out for to be strong partners in our shared goal of curtailing crime and safeguarding the integrity of the financial system.”

The BSP recommended stronger risk management across five areas: board and senior management oversight; the money laundering and terrorism financing prevention program; client acceptance and identification; ongoing monitoring and suspicious transaction reporting; and self-assessment and training.

The paper also highlighted practices that financial institutions should maintain, including enhanced due diligence for high-risk customers and automated transaction monitoring.

Other recommended safeguards include client link analysis, independent verification with regulatory agencies, and participation in information-sharing initiatives.

Client link analysis allows financial institutions to identify relationships among customers, beneficial owners, counterparties, and related entities.

The process can help institutions uncover hidden connections, assess risks, and detect potentially suspicious activities.

The BSP said enhanced cooperation among supervising authorities, particularly the central bank and the Philippine Amusement and Gaming Corp., remains critical to managing risks associated with junket operations.

The guidance was based on a BSP review of selected universal and commercial banks and thrift banks with exposure to casino junket operators and junket players’ transactions.

The review found that physical cash and checks were the main methods used to move funds into and out of junket operations.

Common transaction flows included time deposits and check deposits moved between banks, transfers among casinos and the personal accounts of financiers, players, and junket operators, and foreign-exchange transactions between casinos and money service businesses.

The BSP also cited a January 2023 Anti-Money Laundering Council analysis showing that universal and commercial banks submitted 71.6% of the sampled suspicious transaction reports involving casino junkets.

Land-based casinos, however, accounted for 60.6% of the total value of the suspicious transactions covered by the study.

The central bank’s review identified four broad transaction typologies, including the use of bills-purchase facilities, questionable business declarations and shared addresses, noncash instruments for casino fund movements, and customers whose activities evolved from casino-related transactions into junket operations.

In one case cited by the guidance paper, a client initially classified as a casino financier conducted 29 bills-purchase transactions totaling PHP 42.3 million within one month.

The same client made 23 cash withdrawals totaling PHP 83.6 million during the same period, showing a repetitive pattern of fund inflows through bills purchases and outflows through cash withdrawals.

The BSP said some junket-linked clients declared businesses involving entertainment, travel, hotels and resorts, gaming marketing, property leasing, management consultancy, and holding companies.

Other clients used declared businesses unrelated to gambling, including diagnostic laboratories, while sharing addresses, contact details, ownership, officers, or beneficial owners with identified junket operators.

The guidance also warned that shell companies, changing corporate names, and the use of directors, officers, signatories, holding companies, or affiliated businesses can complicate customer identification.

Financial institutions were advised to screen customers against regulatory information, sanctions lists, adverse media, and other reliable intelligence sources.

The BSP said information sharing is particularly important because banks may have limited access to complete and reliable lists of registered and delisted junket operators, their beneficial owners, authorized signatories, related parties, and interlocking shareholders.

The central bank expects supervised institutions to use the guidance in enhancing their anti-money laundering and counterterrorism and proliferation financing frameworks.