High reporting threshold also a concern
Proxy betting in the Philippines is a potential loophole in the country’s anti-money laundering infrastructure, according to a recent report issued by the United States government.
The 2018 edition of the U.S. Department of State’s International Narcotics Control Strategy Report was published in March. In 2017, the Philippines finally added casinos to the list of businesses covered by the country’s anti-money laundering laws. Even so, the report states, “ongoing deficiencies include the high (US$100,000) single-transaction reporting threshold, the non-inclusion of junket operators as covered entities, and the exclusion of non-cash transactions for AML reporting purposes.”
Proxy betting allows gamblers to place bets via telephone or the internet rather than going into a casino. The practice was banned in Macau in 2016.
Shaun McCamley, a partner at Global Market Advisors, agreed that casinos offering proxy betting “do not meet AML and KYC compliance requirements.”
“Currently all casino operators allow junkets to come into the property and provide their own proxy betting platform and solution,” he said. “By allowing proxy betting under these conditions, the casino has no control over who the players are, where they come from and what financial arrangements have been put in place.”
In 2016, a cyber-heist of Bangladeshi funds in the New York Federal Reserve Bank enabled thieves to launder $89 million through casinos in the Philippines.
Despite the built-in risks, proxy betting remains popular in Asia, particularly in Cambodia, Vietnam, and the Philippines, where regulations do not ban the activity.
