PAGCOR’s New Guidelines on Junkets Call for Enhanced Due Diligence

The Philippine Amusement and Gaming Corporation or PAGCOR is toughening up its stance on the way junket operators can run their business and associate themselves with gambling businesses in the country. A new set of guidelines published on Monday sheds light on the do’s and don’ts of what land-based businesses may do when seeking to establish business connections with junket operators.

New Guidelines Seek to Minimize Threat of Rogue Junket Operators

The criteria include specifics about the backgrounds of people who work as junket associates, promoters, and agents. They may not be indicted for dishonesty, fraud, money laundering, theft, or any other financial crime. Casinos should do their due diligence and run extensive background checks on key persons who are involved in the day-to-day and strategic operations of junket businesses.

In other words, the due diligence practices by Philippine casinos will need to be much better to ensure that money laundering and terrorist financing do not occur through their businesses. The new guidelines also detail the cases where such businesses are listed as debtors who have failed to service their outstanding financial obligations, or have gone bankrupt beyond the country’s border.

These cases will also disqualify would-be junket operator partners from working with PAGCOR and the casinos licensed under the regulator. The new document and guidelines seek to ensure that all junket operators do business openly and above board, so as to prevent criminal activities from taking place on casino floors with the aid of such operators.

The closure of hundreds of junket operators in Macau has prompted these businesses to adapt and seek opportunities elsewhere. As one of the most gambling nations in the region, the Philippines is a natural choice.

Addressing Possible Regulatory Shortcomings in Junket Operators

Present developments also reflect the deeper strategy by the Philippines Anti-money Laundering Council executive director Mel Georgie B. Racela who said that the watchdog is looking to establish guidelines that would minimize the risks posed by the junket industry.

Junket operators play an important role in most gambling countries in Southeast Asia and their most recent withdrawal from Macau pits the special administrative region against new challenges. Elsewhere in the region, though, junkets are expected to continue driving VIP gamblers to partner casinos.

The fallout of the Suncity Group saga whose boss Alvin Chau is in prison and awaiting trial on a litany of charges and alleged criminal ties to syndicates has been a wake-up call for regional governments to take a closer look at VIP operations.

PAGCOR intends to keep a central database of everyone who is involved with junket operations moving forward, however, which should create transparency and help the regulator raise an issue with specific operators. The guidelines pitched by the watchdog are solid, but how they are put into practice is another matter altogether.