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Barbers wary of money laundering via offshore online gaming

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By Ellson Quismorio

Surigao del Norte 2nd district Rep. Robert Ace Barbers expressed concern Thursday over the possibility that so-called offshore online gaming firms are being used by local and foreign drug syndicates as a money-laundering tool.

Rep. Robert Ace Barbers (WEBSITE / MANILA BULLETIN)

Rep. Robert Ace Barbers (Photo from Ace Barbers website / MANILA BULLETIN)

Barbers said that while the Philippine government, particularly the Bureau of Internal Revenue (BIR) and the Philippine Amusement and Gaming Corporation (PAGCOR) only see the economic benefits of e-gaming, they are apparently blind to the possibility that it may be utilized by drug syndicates and other crime groups.

“I have read reports on how the Italian and Sicilian mafias have used the on-line gaming as a tool or scheme to launder their illegally obtained monies. They invested funds in Malta to operate huge on-line gaming firms where they launder their money,” he said.

“Under this scheme, the Italy and Sicily-based syndicates would bet huge amounts of money on the on-line gaming firms which they themselves set up in Malta. And via long or short-term on-line betting games, they would of course win, in millions of dollars or in Euros. They would be issued receipts or other proofs that they’ve won by their own dummy online gaming firms, and voila, their illicit or laundered money now becomes clean money,” said Barbers, who chairs the House Committee on Dangerous Drugs.

He said this is similar to the modus operandi previously employed by drug syndicates and other crime groups whose money are “shipped” via chartered planes in some of the country’s airports, and later brought to the PAGCOR-operated casinos.

“Pag-dating sa casino, ipapalit nila ito ng mga chips. Yung ibang chips, ipupusta nila, pero karamihan, hindi. Days later, iwi-withdraw nila ito into cash, with proper receipts from the casino. Pagbalik nila sa bansa nila, dala na nila ang kanilang laundered money at sasabihin na nanalo sila sa casino. E, di nalabada at nalinis na nila yung drug money nila,” he explained. (They will have them converted to chips at the casino. They will play with some of the chips, not all. Days later, they will withdraw it as cash, with proper receipts from the casino. They will bring the money back to their country and say they won it in the casino. They’ve successfully laundered and cleaned their drug money.)

Only in this case, the POGO or Philippine Offshore Gaming Operators become the casinos in the laundering set-up. A POGO refers to an entity that offers and participates in offshore gaming services by providing games to players, taking bets, and paying the winning players.

Barbers urged his colleagues to craft and enact laws that would regulate and prevent offshore online gaming firms from being turned into virtual “ATMs” or Automatic Teller Machines of illegalistas.

“We should adopt and impose strict laws and rules and regulations to ensure that no drug or other crime syndicates would use dummy individuals to set up dummy POGO firms and be granted PAGCOR franchises and use them to launder their money,” he said.

Barbers said PAGCOR should also conduct due diligence in granting franchises to POGO firms, which have begun to mushroom all over the country. PAGCOR conceptualized POGO to enable the Philippine government to capture a greater share of the growing, yet previously unregulated, online gaming pie.

“PAGCOR has reportedly granted 87 POGO franchises to firms coming mostly from China. But we received raw reports that there are now more than 300 POGO firms operating in the country,” the solon noted.

PAGCOR was expecting an additional revenue of P6 billion this year, reports said. But as of July this year, the BIR has collected only P200 million from foreigners working in the country.

The Department of Finance (DOF) earlier projected a P2-billion monthly collection in taxes from POGO workers.

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