Casinos proposed to be covered under anti-laundering law

MANILA, Philippines—Claiming that casinos are used as “conduits” in money-laundering operations, the Anti-Money Laundering Council (AMLC) now wants them to be covered under the law.

“Casinos are actually known conduits of money laundering because buying casino chips and exchanging (them) with cash later without actually gambling, that’s laundering. That’s laundering of funds,” AMLC executive director Vicente Aquino said minutes after attending Tuesday’s hearing of the Senate sub-committee on anti-money laundering law amendments.

“As a general rule, casino gamblers use financial institutions such as banks to deposit or transfer the funds, but there are certain instances where banks are not used to transact casino winnings or casino bets,” Aquino further said.

He refused to say, however, if his office had already traced illegal transactions using casinos.

“That’s confidential, I’m sorry,” he said.

During the hearing, the Philippine Amusement and Gaming Corp., or Pagcor, expressed its opposition to the proposed plan to include casinos under the Anti-Money Laundering Law, saying it would be detrimental to its operations.

“Making Pagcor subject to the reportorial requirements under the Anti-Money Laundering Law will be seriously detrimental to its operations. It will make Pagcor even less competitive in the gaming industry and exacerbate its already tenuous position compared with other domestic gaming operators,” Concepcion Rubio of Pagcor’s legal office told the committee.

“As a result, Pagcor’s ability to fund the many laws tasked by the legislature for it to support will be critically undermined,” she said.

Besides, Pagcor said, covering casinos under the law would be contrary to the “current legislative trend” in gaming in other jurisdictions.

Rubio noted that no less than the Nevada Gaming Commission, which regulates the casinos in Las Vegas, USA, repealed its Cash Transactions Prohibitions, Reporting and Recordkeeping from its regulations.

Rubio’s mention of the Commission’s regulations angered Aquino, who was present at the hearing.

“We take exception to the alleged nullification or withdrawal by the Nevada Gaming Commission of the rules requiring casinos to comply with certain regulations. That has been superseded by the US federal government regulation requiring casinos throughout the US to report monetary instrument to the financial crime enforcement network of the US treasury department,” Aquino said.

He added that the issue had already been discussed before with Pagcor representatives.

And no less than a representative from the US government, Aquino said, called the attention of Pagcor regarding its “mistake in relying on this Nevada Gaming Commission’s action.”

Senators Sergio Osmena III and Franklin Drilon were also surprised by Rubio’s revelation that Pagcor was relying on the Nevada Gaming Commission’s regulations.

“So you’re using the Nevada Gaming Commission as the bible..? So therefore, what you’re saying is that the Nevada Gaming Commission is more powerful than the Federal Reserve Banks and the US treasury?”

“As far as the gaming trend of casinos is concerned, we follow them [Nevada Gaming Commission],” replied Rubio.

“You follow them? You mean to say that the Nevada Gaming Commission has its own rules as far as money laundering is concerned?” asked Osmena, to which the Pagcor representative answered yes.

“You know, what you’re saying? Are you saying that the Nevada Gaming Commission is free to adopt its own rules regardless of what the US treasury says?” Osmena asked again.

At that point, Rubio answered no.

It was also learned, on Drilon’s questioning, that unlike Pagcor, the Commission only regulates and does not operate casinos.

“They regulate, they do not operate casinos. That’s why there is probably no conflict of interest…and that basically is the difference between Pagcor and the Nevada casinos,” said the senator.