Philippine central bank developing online gambling rules for banks, e-wallets

The Bangko Sentral ng Pilipinas (BSP) is developing rules that require financial institutions to impose stricter safety protocols in an effort to mitigate risks from online gambling.

In a statement on Thursday, the central bank said it is “taking action to protect financial consumers from the risks associated with online gambling.”

The booming gaming industry in the Philippines has led to calls to regulate or even ban the sector amid concerns over rising addiction and financial problems among Filipinos.

Philippine President Ferdinand R. Marcos, Jr. has warned that digitalization has made online gambling more accessible and destructive to Filipino families.

Mr. Marcos earlier expressed openness to supporting both taxation and regulation in the sector but did not bring this up during his State of the Nation Address last month.

The Department of Finance has proposed a tax on online gaming, as well as other possible measures to crimp the public’s access to digital gambling platforms such as imposing limits on playing time or cash-in.

The BSP said it is “finalizing new rules, developed following public consultation, that will require banks, e-wallets, and other financial service providers to adopt stronger safeguards against gambling-related harm.”

These rules will include stricter identity verification measures such as biometric checks and facial recognition when utilizing funds for online gambling.

The central bank also seeks to impose “daily limits on gambling-related transfers to reduce excessive financial losses and time-based restrictions on gambling payments to help curb impulsive behavior.”

Other measures include user tools to implement personal spending caps, voluntary breaks, or options to self-exclude from gambling transactions.

“These safeguards aim to reduce the risks of addiction, fraud, and financial harm while promoting the responsible use of digital financial services,” the BSP added.

The central bank last month released a draft circular which seeks to tighten regulations on online gambling payments to prevent the misuse of financial services.

This would cover payment service providers engaged in these services as well as operators of a payment system serving as payment acquirer or aggregator of the online gambling operator.

“The BSP’s move to strengthen safeguards against online gambling-related harm is a timely and welcome development,” Rizal Commercial Banking Corp. Executive Vice-President and Chief Innovation and Inclusion Officer Angelito M. Villanueva said in a Viber message.

“As digital payments become more accessible, so too does the risk of excessive gambling, fraud, and financial distress, especially among the youth and vulnerable sectors,” he added.

Mr. Villanueva cited the need for a “proactive, risk-based approach that goes beyond blocking transactions.”

“Measures like real-time monitoring, stricter onboarding, merchant classification, and customer self-exclusion tools will help banks and fintechs (financial technology) protect users while upholding financial integrity.”

“This is a vital step toward building a more responsible and resilient digital finance ecosystem,” he added.

Ronald B. Gustilo, national campaigner for Digital Pinoys group, suggested several measures that central bank and Philippine Amusement and Gaming Corp. can consider to discourage online gambling.

“Ban endorsements on social media platforms, e-wallets, banking platforms, super-apps, booking sites, and other websites or apps across the internet — except on the official website of the online gambling platform itself,” Mr. Gustilo said.

Banner ads, the use of celebrities or influencers as promoters, and any content that promotes illegal gambling should also be prohibited, he added.

“We also suggest making it a criminal offense to endorse gambling online. It should also be a crime to steal content or illegally use photos or videos of a personality and edit them to appear as if the influencer or celebrity is endorsing gambling.”

The government can also consider discouraging easy access to betting, such as increasing the minimum bet amount of online gambling platforms and raising the minimum betting age.

Tighter restrictions can also be employed, such as not allowing any gambling until the identity verification process is complete, as well as an automatic cooldown feature.

Mr. Gustilo also proposed not allowing the sharing or lending of accounts. “Anyone caught allowing others to use their account should be banned from the platforms.”

He also called for the ban of using e-wallets or online banking for topping up gambling accounts, as well as banning interfaces that resemble children’s games.

On the other hand, political economist Calixto V. Chikiamco said that the BSP “should not be determining ‘social harm.’”

“It’s a monetary regulator, not a social engineer. It should leave to elected members of Congress regulations affecting online gaming,” he said in a Viber message.

The central bank should also be careful about over-regulation, he said.

“If they set up high bars for poor people to gamble, they might just drive gambling to illegal gaming sites. Gaming is a form of entertainment that should be available to poor and rich alike.”

“The social harm actually comes from gambling addiction and there are tools like allowing relatives to ban their loved ones from gaming sites that should be mandated,” he added.

Mr. Chikiamco said regulations must be “smart” or else these will just “drive players into unlicensed and unregulated markets where they could be exploited and social harm mitigation tools are absent.” — Luisa Maria Jacinta C. Jocson, Senior Reporter