New Regulations Proposed by the Philippines Central Bank Aim to Tighten Control Over Online Gambling
The Philippines Central Bank (BSP) is introducing fresh regulations aimed at enhancing oversight of online gambling, particularly concerning payment services. This initiative arises in response to growing concerns regarding the social and financial ramifications associated with iGaming.
Recent discussions spotlight the troubling impact of online gambling on Filipino households, with many facing addiction and severe financial difficulties. A report from the Straits Times highlights how easy access to these platforms has exacerbated such issues.
While some lawmakers advocate for a complete ban on online gambling, the Philippine Amusement and Gaming Corporation (Pagcor) takes a more moderate stance, favoring tighter advertising regulations instead. Ironically, President Ferdinand Marcos Jr. has already placed constraints on offshore gaming operations and is exploring the feasibility of a sin tax targeting the online gaming sector.
Setting Standards and Safeguards
The BSP’s proposed regulations are designed to protect end users by imposing limits on digital payment platforms utilized for online gambling. This includes imposing caps on daily transfer amounts for bettors and enhancing due diligence requirements for operators.
A draft circular from the BSP states that to foster a "safe, efficient, and reliable retail payment system," it’s crucial to prevent payment service providers (PSPs) from engaging in transactions tied to socially harmful activities. The regulations emphasize the need for stringent know-your-customer (KYC) protocols in the provision of online gambling payment services.
Under the new framework, PSPs will be required to secure approval from banks to operate. Key requirements for applicants include:
- A minimum capitalization of PHP 300 million ($5.29 million).
- A strong management approach to combatting money laundering and fraud.
- Establishment of a board-level committee responsible for compliance with anti-money laundering and counter-terrorism financing regulations.
- Monthly or as-needed reporting on gambling-related transactions and partner platforms.
- Restrictions on gameplay to a maximum of six hours per day, along with a 24-hour cooling-off period for heavy users.
Restrictions on at-risk Groups
The proposed regulations will prevent PSPs from directing individuals to online gambling sites and will exclude specific demographics from participation. This prohibition affects individuals under 21, university students, military personnel, government workers, and those receiving welfare benefits.
The Fintech Alliance of the Philippines, which includes influential players like GCash and Maya, has pledged support for the BSP’s initiatives to combat problem gambling and illegal online platforms. Founding chair Lito Villanueva stated their commitment to collaborating with regulators to enhance consumer protections.
Outcry from Religious Leaders
In a striking condemnation of the situation, Bishop Cardinal Pablo Virgilio David has labeled the surge in online gambling an epidemic affecting the youth and impoverished communities. Referencing how easily accessible iGaming has become, he emphasized that it has transformed homes into gambling venues, thereby victimizing Filipinos.
Cardinal David criticized Pagcor for its defense of the industry, claiming it is preposterous for a government agency to express concern over illegal offshore operations while facilitating domestic online gambling activities.
The BSP is actively seeking feedback from stakeholders until July 25 as it works to finalize these regulatory changes.