Following the Suncity Group debacle that brought the casino junket sector to its knees, regulators in several regions began tightening their controls. The Philippines was among them, but the Philippine Amusement and Gaming Corp (PAGCOR) is turning the screws even more.
PAGCOR is introducing new rules for junkets in the country. It is placing greater responsibility on the shoulders of casino operators. This will make them more accountable for their junket partners’ actions.
While casino operators in countries like Australia distance themselves further from junkets, the Philippines won’t cut the sector off. Instead, land-based casino operators will need to conduct better oversight if they want to avoid problems with the government.
Junkets In the Spotlight
This past Monday, PAGCOR published a notice on its website about its updated junket requirements, Casino Guide for a Fitness and Propriety Assessment for Junket Operators V1.0. It explains that land-based casinos have an “obligation to assess the fitness and propriety nature of its junket or chipwashing operations, its associates/agents/promoters, and applicants for junket operations.”
As such, casino operators must assess the suitability of the junkets with which they partner. They are responsible for the junkets’ integrity and suitability to operate in the Philippines.
The result will be improvements to the country’s focus on anti-money laundering (AML) and combating the financing of terrorism (CFT) initiatives. The International Monetary Fund recently congratulated the Philippines for making improvements in those initiatives, but said more needs to be done. At the same time, the Financial Action Task Force keeps the country on its grey list.
The new PAGCOR guidance is a direct result of the illegal activity Suncity and its former boss, Alvin Chau, conducted. As a result, PAGCOR has already determined that the junket isn’t worthy of operating in the country.
Chau, who the regulator also added to its blacklist, remains behind bars in a Macau prison. He is awaiting trial on a number of crimes, including money laundering, illegal gambling and more. The trial will begin in September.
Increased Scrutiny To Clean Up Junkets
Going forward, casino operators will need to take their scrutiny of three key areas as they relate to junkets more seriously. Reputation, honesty and integrity comprise a single area. Competence and capability related to experience and educational background are in the second. Finally, “other qualifications” fall into the third category.
Under the heading of “reputation, honesty and integrity,” licensed casinos will have to determine if key individuals within the junket’s hierarchy have a criminal record. Notably, any convictions for “dishonesty, fraud, breach of trust, money laundering, terrorist financing, proliferation financing, theft or financial crimes” are cause for concern.
The section on “Competence and Capability” refers to whether those individuals have received adequate training that correlates to the jobs they hold. In addition, those persons must show that they are capable of performing the responsibilities associated with their job descriptions.
The last category, “Financial Soundness,” addresses a review of any previous bankruptcy filings on the part of the individual. In addition, casinos will need to find out if there is any outstanding debt or court-ordered judgment. That applies not only to records in the Philippines, but everywhere in the world.
Establishing guidelines is one thing; enforcing them is another. Suncity operated freely for decades, even as some regulators questioned the company’s legitimacy. The onus is on the casino operators to ensure junkets play by the rules. However, PAGCOR still has to ensure the casino operators do the same.
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