The Philippine Anti-Money Laundering Council (AMLC) says Philippine Offshore Gaming Operators (POGOs) have “a low level of awareness” regarding anti-money laundering and countering the financing of terrorism. The findings were part of a risk assessment conducted by the AMLC regarding the growing online sector in that country, according to a Tuesday statement.
As part of the risk assessment on POGOs, the AMLC said it found “an increasing level of threat” concerning money laundering and other fraudulent activities; a high number of unregulated or unsupervised “service providers” to the online industry; and a “low level” of “identification” regarding who ultimately owned the companies involved in the online gaming business.
Service providers were identified as companies that offer products, such as gaming software or content streaming, to licensed POGOs.
In a Tuesday release, the anti-money laundering watchdog stated POGO licences – and certificates of operation given to service providers – must be “re-evaluated,” as the growing sector could represent an expanding risk in terms of money laundering.
Other recommendations included: increasing the level of compliance and supervision through training and workshops; looking again at the supervision of POGOs and other service providers; and conducting a regulatory assessment and looking at powers of enforcement.
The AMLC recommended also that service providers to POGOs should be regarded as entities covered by the “company service-provider sector definition under the Anti-Money Laundering Act of 2001”.
Since 2017, casinos in the Philippines - including Internet- and ship-based operations – have been deemed “covered persons” by the country’s Anti-Money Laundering Act.
In 2019, the Philippine authorities “shut down around 200 Internet-based casinos and service providers, illegally servicing online gaming operations,” said the AMLC.
The AMLC statement was published amid growing calls for stronger oversight of the online gaming industry in the country. One suggestion has been to suspend such offshore gaming activities due to allegations the sector had been used for illegal activities.
But President Rodrigo Duterte has defended the operations of POGOs, saying the country needs the funds collected from the industry, according to local media reports. He urged the nation’s congress to pass a law further to regulate POGOs, instead of lawmakers seeking to shut them down.
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"There’s a huge amount of possibilities out there and in the case of Macau, it seems that some of these issues should be considered or we may lose the epithet of gambling capital of the world"
Macau-based lawyer and senior partner at law firm Rato, Ling, Lei and Cortés