Payments regulation in gambling: Spotlight on the Philippines

The Philippine online gambling industry’s rapid transition from a disgraced foreign-facing sector to a flourishing domestic market is now facing a defining challenge: payments regulation in gambling. Once dominated by the controversial POGO (Philippine Offshore Gaming Operators) model, the landscape has shifted inward, with domestic platforms now among the world’s top ten markets.

But with this growth comes heightened scrutiny. In recent months, lawmakers in both houses of Congress have floated proposals ranging from strict restrictions to outright bans on online gambling. Supporters, including pragmatic policymakers and industry stakeholders, are rallying to defend the sector, citing economic benefits and tax contributions.

At the center of this debate is PAGCOR, the country’s regulator and casino operator. Long a beneficiary of gambling revenues, PAGCOR’s stance is complicated by its political ties. While it champions a sustainable domestic market, its board and executives remain accountable to the President, making its independence questionable.

For this reason, some of the most significant reforms are emerging not from PAGCOR, but from other arms of government. The legislature has proposed a ban, the finance ministry a new tax—and now the central bank is stepping into the spotlight, with payments regulation in gambling becoming the next battleground.

The Bigger Picture

PAGCOR, often reactive in its approach, has already shut down much of the offshore-facing POGO sector. Yet domestic operators are now in the firing line, with regulators warning against illegal websites, unauthorised advertising, and influencer-driven promotions. A recent agreement with the national Ad Standards Council requires pre-approval of all gambling advertisements, showing an attempt to bring order.

Still, while public attention fixates on PAGCOR, less focus has been placed on the payments ecosystem underpinning both legal and illegal operators. This gap in oversight has allowed unregulated platforms to thrive, exploiting the Philippines’ sophisticated e-wallet and mobile payments infrastructure.

The Bangko Sentral ng Pilipinas (BSP) has moved to close that gap with a draft circular targeting gambling payments. The proposed rules are sweeping, marking a turning point for payments regulation in gambling.

Payments Regulation in Gambling

According to the BSP’s draft amendments to the Manual of Regulations for Payment Systems (MORPS), any company facilitating online gambling transactions must now meet strict requirements. These include:

• Securing central bank approval to process gambling payments.
• Holding ₱300 million ($5.3m) in capital and maintaining a stable risk rating.
• Implementing robust anti-money laundering (AML) and counter-terrorist financing (CTF) measures.
• Establishing a compliance committee and opening operations to full inspection.

For day-to-day operations, payments providers must avoid displaying gambling links, work only with authorised operators, and perform enhanced due diligence. Customer protections are central, with requirements such as facial biometric verification, transaction limits, six-hour daily play caps, and enforced “cooling-off periods.”

Perhaps most significantly, providers must develop Responsible Online Gambling Policies, mandating transaction limits, play-time alerts, and self-exclusion options. Employees of payments companies will also be prohibited from gambling online.

The penalties for non-compliance are tough: daily fines of up to ₱100,000 for continuing violations, or ₱1 million per incident, with suspension of licenses in more serious cases. Companies will have six months to transition into compliance.

Why Should You Care?

These changes matter because they strike at the heart of online gambling’s financial infrastructure. Illegal operators, once free to use mainstream e-wallets like GCash, Maya, and GrabPay, may now find themselves locked out. For regulated operators—who already shoulder tax burdens and compliance costs—this levels the playing field and weakens their illegal rivals.

Beyond market balance, the reforms support the Philippines’ efforts to clean up its international reputation. The country was recently removed from the European Commission and FATF watchlists for money laundering risks. Effective payments regulation in gambling helps maintain this progress, satisfying global watchdogs and reinforcing the credibility of the financial system.

Politically, the BSP’s move may also provide breathing space for PAGCOR and domestic operators. With President Ferdinand Marcos Jr. facing calls for a total ban, central bank-led reform offers a middle ground: tough but balanced regulation that neutralises critics without destroying the industry.

For investors, suppliers, and operators, this stability is invaluable. It signals that despite political noise, the Philippine gambling sector is moving toward maturity, with governance and oversight closer to international standards.

What Comes Next?

A total ban on domestic online gambling remains unlikely. More probable is the rollout of BSP’s MORPS amendments, complemented by tax reforms and modest legislative tightening. PAGCOR, relieved at the preservation of domestic revenues, will likely support these moves.

If implemented effectively, payments regulation could accelerate the industry’s maturity, driving illegal operators offshore while boosting confidence in regulated platforms. The Philippines could then consolidate its growing role as a hub for gambling technology, management, and services—an evolution that has already seen it draw talent and investment away from Macau.

Yet risks remain. Should illegal operators relocate abroad, regional crime networks could reconfigure in destabilising ways, echoing past shifts after gambling bans in Cambodia and elsewhere. The challenge for Manila will be to police its own industry without exporting problems abroad.

Still, the direction of travel is clear. Payments regulation in gambling is no longer a peripheral issue—it is the fulcrum on which the Philippine market’s credibility and sustainability now rests. With the central bank committed to reform, the country has an opportunity not just to protect its domestic industry, but also to shape global standards in the intersection of gambling, finance, and regulation.

Marcos Holds His Cards On Domestic Gambling

At a time of confusion and roiling controversy over the future of the Philippine domestic gambling market, the gambling industry and the public braced themselves for an executive determination of the market’s future in Ferdinand Marcos Jr’s state of the nation speech on July 28. The President then stepped up to the podium and said … nothing. 

This was surprising. The previous year, Marcos used the same occasion to consign foreign-facing online gambling to oblivion, to a standing ovation. This year the stage was set for an all-or-nothing declaration on the domestic industry’s future. “If in doubt, leave it out” appears to be Marcos’ strategy, and the more we examine Marcos’ dilemma, the more it makes sense for him, and therefore the regulator PAGCOR, to hedge a little longer. The Philippine domestic online gambling segment is currently one of the most successful gambling markets on earth, growing by three figures annually and leaping into the top ten of regulated global markets in no time. The bulk of revenue this market delivers to government falls directly under Marcos’ purview. The biggest champion of domestic operators, following a late-POGO transitional period of PAGCOR indifference, is the regulator itself. The industry overwhelmingly employs Filipinos, unlike the POGO procession of often illegal and abused Chinese labour. And its popularity grants it a certain legitimacy that a progressive democratic nation cannot dismiss out of hand. So the question becomes how the government could have allowed a mirror image of the POGO experience to become a potential albatross for regulated operators. 

The unregulated domestic market has exploded along with the market for legal actors, and to make matters worse, this explosion has been largely facilitated by the use of popular payments services. This is a monster largely of the government’s own making, particularly PAGCOR and executive policy mavens, for whom the complaint or excuse of lacking enforcement powers can only account for so much. Warnings of payment company collusion in illegal domestic gambling have been aired before PAGCOR and mainstream media for years, but it has only been in the last few weeks that the central bank has intervened with regulations of unprecedented invasiveness for the payments industry. 

In tandem with this initiative, the government is considering mandatory listings on the Philippine Stock Exchange for online gambling companies, higher taxes and other compliance-focused strategies that seem designed as much to protect the segment as profit from it. But dissident voices in the executive and Congress are many, and like so many gambling segments in Asia, the industry is barely competent to organise a public relations response. 

So in this time of industry instability, all eyes are on Marcos and industry delegates in his circle, as well as gambling industry foes in the legislature, civic society and the Catholic Church energised by the demise of POGOs. It is tempting to assume that the domestic segment, with its phalanx of operators and wide range of products, can stare down those calling for its extinction, but with Marcos now struggling on several political fronts, the risk of a full policy reversal remains.

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