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The proposed regulations permit banks and electronic money issuers (EMI) to manage digital marketplaces, allowing them to provide both their own offerings and those from third-party vendors through a unified online platform.

While these marketplaces may feature a mix of financial and non-financial products, any services connected to gambling are strictly prohibited.

As stated by the BSP, gambling-related products and services — including online casinos, sports betting, electronic gaming, and other gambling activities — by banks and EMIs are not allowed.

These restrictions extend to any operations that could potentially harm the credibility of marketplace participants or compromise the integrity of the financial system.

The proposal follows the country’s recent removal from the Financial Action Task Force (FATF) grey list, as well as increasing political pressure to impose a complete ban on all forms of online gambling.

The FATF placed the Philippines on its grey list in June 2021. Being on the list indicates that a country has deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) framework, making it subject to increased monitoring.

Countries on the grey list also face heightened scrutiny from international financial institutions, which can impact foreign investment and cross-border transactions.

After implementing a series of reforms, including stricter AML measures, improved monitoring of financial transactions, and increased oversight of high-risk industries, the Philippines was removed from the grey list in February.

However, part of the conditions for this removal included strengthening oversight of sectors prone to illicit financial activities, including gambling.

Online gambling, especially through unregulated platforms, has been flagged as a high-risk sector for money laundering and illicit financial flows.

PAGCOR speaks up

The proposed guidelines have already drawn criticism from the Philippine Amusement and Gaming Corporation (PAGCOR). Chairman Alejandro Tengco expressed concern that the BSP did not consult with the agency before introducing the draft rules.

Given that online gaming accounts for a significant portion of the country’s gaming revenues — generating PHP48.79bn (€788m) in 2023 — PAGCOR is wary that the new restrictions could disrupt a thriving industry.

Despite these concerns, the BSP appears focused on strengthening financial integrity and preventing potential financial crime risks linked to digital financial transactions.

If implemented, the restrictions could force online gaming operators to find alternative payment processing solutions outside the traditional banking system, potentially pushing some activities underground.

Rising pressure for a complete online gambling ban

The BSP’s draft guidelines also emerge amid growing political and public calls for a total ban on online gambling in the Philippines.

The online gambling industry, particularly Philippine Offshore Gaming Operators (POGOs), has come under intense scrutiny due to reports of financial crimes, human trafficking, and other illicit activities associated with the sector.

In recent months, lawmakers and advocacy groups have pushed for stronger regulations, if not an outright ban, on all online gambling operations.

Notably, Senate leaders and government agencies have expressed concerns about the negative social and economic impact of online gambling. Some officials argue that the industry has become a hub for illicit activities including money laundering and fraud.

Lawmakers such as Sen. Sherwin Gatchalian and Senate President Juan Miguel Zubiri have openly called for a complete shutdown of POGO operations, citing national security risks and reputational damage to the Philippines.

In December 2023, the Philippine House of Representatives approved a resolution calling for a comprehensive study on the social and economic effects of online gambling, a move that many interpreted as a precursor to a full-scale ban.

Additionally China, a key player in the POGO sector due to its large base of Chinese gamblers, has repeatedly pressured the Philippine government to shut down offshore gambling operations that illegally target Chinese citizens.