BSP Tightens Grip on Online Gambling Payments

New Regulations Demand Stricter Oversight for Financial Providers

The Bangko Sentral ng Pilipinas (BSP) is ushering in a new era of accountability for payment service providers and operators handling online gambling transactions. Under proposed new rules, these entities will require explicit regulatory approval to facilitate such activities, signaling a significant step to protect consumers and combat illicit financial flows.

Mandatory Approvals and Robust Standards

A draft circular from the BSP outlines stringent regulatory and operational benchmarks for payment providers servicing the online gambling sector. These measures are designed to safeguard consumers, encourage responsible gaming habits, and mitigate risks associated with fraud, addiction, and money laundering.

Eligible payment service providers must demonstrate substantial financial strength, with a proposed minimum capitalization of P300 million. They also need a strong performance rating under the BSP’s Supervisory Assessment Framework and must possess advanced systems for anti-money laundering and fraud detection.

Furthermore, these providers are mandated to establish board-level committees focused on anti-money laundering and counter-terrorism financing, alongside comprehensive compliance programs.

Enhanced Consumer Protection Measures

The BSP emphasizes that digital payment systems must not be exploited for harmful social activities. Payment providers involved with online gambling will operate under enhanced know-your-customer protocols, rigorous transaction monitoring, and robust consumer safeguards.

The proposed regulations include provisions for dedicated transaction accounts for online gambling. These accounts will be accessible only to individuals who meet strict eligibility criteria, including being at least 21 years old and not falling into legally restricted categories such as students or government employees.

Each eligible individual will be limited to a single online gambling account, with tightly controlled fund transfers. Daily top-ups will be capped at 20 percent of the user’s average daily balance, and usage will be restricted to a six-hour daily window.

Providers must implement advanced security features like facial biometric verification. They will also enforce mandatory cooling-off periods following periods of heavy usage, and prohibit lending services on platforms offering these dedicated gambling accounts.

Promoting Responsible Gaming

A key component of the new framework is the requirement for providers to adopt a comprehensive responsible online gambling policy. This includes enabling self-imposed spending and time limits, providing pop-up alerts for intensive usage, requiring opt-in consent for gambling-related advertisements, and allowing users to temporarily disable their accounts.

Applications and platforms must prominently display warnings and provide tools to support responsible gaming. Providers are encouraged to develop and promote their own responsible gambling initiatives.

Moreover, employees of payment service providers will be prohibited from engaging in online gambling themselves.

Enforcement and Penalties

To ensure adherence, the BSP will require monthly reports detailing transaction volumes, user demographics, and data from partner operators. Non-compliance carries significant penalties, including daily fines of up to P100,000 for ongoing violations or up to P1 million per transaction, in addition to potential license suspension or revocation.

Existing providers currently offering payment services for online gambling will have a six-month grace period from the circular’s effective date to comply. Failure to do so could result in an order to cease operations.

These stringent measures align with global efforts to regulate the digital economy and protect citizens from the potential harms of unregulated online activities. For instance, a 2023 report by the UK Gambling Commission highlighted that problem gambling costs the UK an estimated £1.2 billion annually in social harms, underscoring the need for robust regulatory frameworks.