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The Philippine central bank has severed a lucrative payments channel for the online gambling industry, forcing payments providers to suspend in-app transfers with 48 hours’ notice.
In-app gambling transactions are now prohibited after the measure came into effect on Saturday (August 16), following the Bangko Sentral ng Pilipinas’ August 14 memorandum to central bank-supervised institutions (BSIs) to cease mobile payment and website in-app gambling services.
However, e-wallets can still be used when directly accessing gambling websites via cellphones or computers.
The central bank move came “in view of the surge in online gambling transactions and the heightened public concern on its financial health impact to consumers,” the memo said.
“Accordingly, all BSls are hereby instructed to remove links providing in-app gambling access in BSls’ mobile payment apps and websites within 48 hours upon issuance of this Memorandum.
“ln-app gambling access includes any product/service that redirects an account holder to a gaming/gambling site.”
The suspension of in-app e-wallet gambling services offered by numerous brands including GCash and Maya also pre-empts the “issuance and implementation of the corresponding policy that provides standards and expectations for … the provision of online gambling payment services,” it said.
That central bank policy, fleshed out in a draft circular released last month, promises a much tighter transactions compliance regime that would escalate due diligence and risk management requirements and impose transaction limits, among other restrictions.
The measures would likely curb gambling industry growth, but effective implementation could also help to shield operators from their toughest political foes in Congress and the media.
Joe Pisano, CEO of Jade Entertainment and Gaming Technologies, whose operations include a licensed online sportsbook, said the central bank initiative will have a limited effect on most operators.
The change will “affect some of the bigger brands. It doesn’t affect every brand; we don’t all have in-app access to GCash. For us, you have to go to our site, then [you] can choose whether they want [to use] GCash or one of the other 28 payment methods.”
And there will be “no effect, probably, on 70 percent of the [regulated] operators,” Pisano said.
However, the central bank may have inadvertently favoured the unregulated market with the suspension order.
“It’s advantageous to the unregulated market because the ones who were on those apps were some of the bigger ones – DigiPlus, PlayTime,” Pisano said.
“And I know some of the illegal ones are already advertising, saying: ‘Come to us. If you can’t use GCash, just come to us and use our app’, or ‘Use Telegram to come to us instead’.
“The unregulated [operators] have already been advertising to switch, and players will probably go where it’s easy,” he said.
CasinoPlus, one of the Philippines’ largest online operators by volume, used social media accounts to warn users of the change and redirect them to website payment channels, according to posts seen by Vixio GamblingCompliance on Friday.
The central bank’s order on Thursday coincided with the first day of a Senate Games and Amusements Committee hearing into online gambling and various bills proposing to constrain or shut down the industry.
The committee is vetting bills that range from raising the minimum age for gambling to an outright ban. However, committee members spent some time on Thursday quarrelling over the central bank’s 48-hour warning, and whether the in-app ban should have been instantaneous instead.
Much of the online gambling industry has the Philippine President as a guarantor given the preponderance of executive orders behind its operations and legal parameters.
But congressional hostility toward the industry is growing amid media reports of gambling addiction and criminal links to the domestic-facing industry, not least the notorious, now-banned e-sabong (online cockfighting) segment.
Games and Amusements Committee chairman Erwin Tulfo warned on Friday that most committee members would prefer the industry to be shut down but will likely give PAGCOR a chance to show it can properly regulate the space.
“The majority in the committee want a total ban, but the government is asking … to regulate online gambling through PAGCOR because 60bn pesos [$1bn in annual PAGCOR revenue] is 60bn pesos,” the Philippine News Agency quoted Tulfo as saying.
The central bank’s actions and the Senate hearing also serve as a first test of the effectiveness of the online gambling industry’s first substantial trade body, the PlaySafe Alliance of the Philippines, which formally launched this month.
Pisano, whose company is one of the founding members of PlaySafe, said the organisation is communicating with primary gambling regulator PAGCOR and the Senate, but has not opened a line of communication with the central bank.
He said PlaySafe is urging senators toward action against unregulated gambling rather than punishing the regulated market.
