The Philippine Amusement and Gaming Corp (Pagcor), the casino regulator in that country, issued on Monday a guideline stating that all land-based casinos “must assess the fitness and propriety nature” of their junket operators and related associates, agents or promoters.
Criteria include whether “key individuals have been convicted, on indictment of dishonesty, fraud, breach of trust, money laundering, terrorist financing, proliferation financing, theft, or financial crimes”.
Casinos should also investigate whether “key persons” involved in junket operations “have been subject to any judgement debt or award in Philippines or elsewhere, that remains outstanding or was not satisfied either in whole or in part”.
Other criteria include if “key persons have made any arrangements with their creditors, filed for bankruptcy, been adjudged as bankrupt, been the subject of bankruptcy petition, or have been involved in proceedings relating to any of these.”
The four-page guideline – officially called “Casino Guide for a Fitness and Proprietary Assessment for Junket Operators V1.0” – is attributed to Pagcor’s Anti-Money Laundering Supervision and Enforcement Department. It is applicable to “junket operators, its key persons or the management, and the individuals who have controlling interest, as well as to those who exercise significant power or discharge certain responsibilities on behalf of the junket operator/key persons.”
The checks are required before a junket operator can either “obtain or maintain its contract/agreement” with a licensed casino.
In March, an executive director of the Philippines’ Anti-Money Laundering Council (AMLC), Mel Georgie B. Racela, said Pagcor was “identifying risks posed by junket operations” and would “implement necessary measures to mitigate these risks.”
Junket operations have historically played an important role in gaming jurisdictions in the Asia-Pacific region, particularly in Macau. But Macau’s VIP gambling trade has seen a decline in business in recent years, coupled with tightened supervision from authorities in Macau and mainland China.
The Macau decline of the VIP segment accelerated with the November detention of Alvin Chau Cheok Wa, on suspicion of promoting cross-border gambling overseas to mainland China customers, and the cessation of business at his junket brand Suncity Group. The latter brand was also present in the Philippines.
In January this year, the Macau VIP trade saw the arrest of Levo Chan Weng Lin, boss of junket brand Tak Chun, on suspicion of being a triad leader. Macau-based Tak Chun also had business presence in the Philippines.
Pagcor’s new guideline states that, “to conduct any business activity in licensed casinos, all persons responsible for the operations of junkets and/or applicants for junket operations must demonstrate they are a ‘fit and proper’ person”.
It adds: “The preservation of fit and proper standards is essential to ensuring that business activities in the casino sector are being conducted with high standards of market practice and integrity.”
It says that “a central database containing details of the persons who have been assessed will be maintained by the licensed casino and Pagcor.” The goal is to eliminate “the need for individuals to resubmit documentation multiple times in respect to further applications or approvals”.
The guideline states that persons linked to junket operations “are expected to remain fit and proper at all times”. The document says that “any change in circumstances must promptly be notified to Pagcor.”
An earlier document by Pagcor, issued in January, had set out a requirement for probity checks on a number of categories of people linked to any junket operator. They included: members of its board of directors; management; senior officers; or shareholders with a stake of at least 20 percent. This was to ensure that none of these officers or individuals had criminal records.
The Philippines remains on the “grey list” of the Paris-based watchdog, the Financial Action Task Force (FATF), regarding jurisdictions that require extra monitoring in relation to risk of financial crimes. The updated list was published last month, following a four-day plenary meeting of the organisation, and it flagged again junket-related risks in the Philippine casino industry.
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