The Philippine Anti-Money Laundering Council (AMLC) has officially released a study on suspicious transactions connected with casino junkets, which revealed many examples of junket operators who didn’t report covered transactions, violating junket contracts.
Non-reporting as one of the main conditions for suspicious and covered transactions:
The main objective of the study is to learn more about money laundering and terrorist financing threats linked with casino junket operators in the Philippines. In doing so, the study emphasized that “Suspicious Transaction Reports filed by high-risk integrated resorts echo the need to strengthen the AML/CFT controls in the casino sector.”
However, when emphasizing the lack of success of several junkets to properly report potentially suspicious transactions, the AMLC noted two particular examples connected with an unnamed integrated resort, referred to only as Casino A.
In the first example, the junket deal between Casino A and Junket Operator 1 required the junket to file a Rove Report daily to report each covered and suspicious transaction, regardless of whether such a transaction occurred or not.
But, Casino A’s AML team noticed a peculiarity in that Junket Operator 1 continued to issue Rove Reports stating that there were no covered or suspicious transactions.
On that note, Casino A reviewed the CCTV footage of the junket room in question and found out what appeared to be cash payments and withdrawals by unknown persons not listed in Junket Operator 1’s Rove Reports.
According to the AMLC study, Junket Operator 1 stated that “it had mistakenly failed to record and submit the transactions in question. These involved 21 cash deposits totalling Php1.58 billion (US$29 million) to a single account between December 2021 and March 2022.”
Another example, also involving Casino A, disclosed similar examples of reportable transactions made by few persons who were not involved in Junket Operator 2’s Rove Reports.
However, in many of these examples, the bigger transactions made by the individuals were not backed by any game, meaning that they were not actually patrons of the games.
Casino A eventually terminated its junket contract with Junket Operator 2 due to violation of contract terms.
“Casino A submitted 507 Suspicious Transaction Reports with an aggregate amount of Php6.86 billion (US$126 million) in 2022 alone in relation to Junket Operator 2,” according to the AMLC.
Four crucial areas of risk that junket operators should be aware of:
Sharing the findings of its study, the AMLC recognized four crucial areas of risk that casino operators in the Philippines should be aware of, such as:
- not reporting transactions that breach junket contracts,
- a junket operator included in a criminal conspiracy;
- the purchase of small denomination tokens, followed by modest gambling actions;
- performing financial transactions that are not proportionate to the declared source of funds.
In this regard, the AMLC said: “The heavy use of physical cash by casino players of covered and suspicious transactions by certain casino junket operators contributes to the [issue], coupled with the non-reporting vulnerability of high-risk integrated resorts to money laundering risks.”
However, the council emphasized that “further study is required into the findings of its report.”