How the BSP’s upcoming rules could make or break online gambling

By Pierce Oel A. Montalvo, Researcher

WHAT STARTED as a free-for-all for online gambling is about to get some serious house rules from the central bank.

Last July, the Bangko Sentral ng Pilipinas (BSP) released a draft circular introducing comprehensive regulations for online gambling payment services.

The draft circular represents the regulator’s assertive stance on online gambling. Should it become regulation, providers, operators, and consumers alike will be met with drastic changes in the gambling industry.

Then, in August, the central bank ordered to remove in-app gambling links from e-wallets.

“The BSP directive is issued in light of the surge in online gambling transactions and its impact on the financial health of consumers and their families,” the central bank said in a statement.

AN URGENT RESPONSE
The central bank’s intervention followed growing alarm from lawmakers and health experts over online betting’s devastating impact. The Aug. 14 order gave financial firms 48 hours to remove links redirecting users to gambling websites.

“The Monetary Board has approved our policy ordering BSP-supervised institutions to take down all icons and links redirecting to online gambling sites,” BSP Deputy Governor Mamerto E. Tangonan said during a Senate committee hearing on online gambling in August.

The new draft circular goes further, aiming to build comprehensive regulatory walls rather than simply patching leaks. BSP said the suspension would remain in place until guidelines for online gambling payment services are finalized.

“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,” the central bank said in a statement dated Aug. 7.

The scale of the challenge is substantial. According to Philippine Amusement and Gaming Corp. (PAGCOR), gaming industry gross gaming revenues jumped 26% to P214.75 billion in the first half of 2025. Electronic games drove this growth with a 53.47% increase in gross revenues to P114.83 billion.

PAGCOR currently collects a 30% rate from e-gaming platforms, down from 35%, which could encourage illegal operators to register. However, concerns remain about the proliferation of unlicensed and unregulated sites that could undermine anti-money laundering efforts.

BSP Governor Eli M. Remolona, Jr. said that more measures to regulate e-gaming are being considered.

“We’re still studying it. Basically, as before, we just want to put sand in the wheels,” he said during the Manila Tech Summit on Aug. 26.

The regulatory pressures are heard not just in the government but also in the streets, among online gambling users who have already felt the first blows.

“If you’re a gambler, you’re really a gambler. You’ll find and find other sites,” said a bike taxi driver, who plays scatter slots on his mobile phone. He requested to be anonymous.

“All the riders we’ve been with, they all want to gamble,” he said in an interview in mixed English and Filipino.

“You say all sites disappear, everything, whether illegal, legal, whatever, nothing left, totally banned. Damn, then gambling in street corners will be rampant again.”

DEFINING THE BATTLEGROUND
At its core, the proposed regulations seek to erect an accountability system for all participants in the industry.

The circular places further enforcement on Payment Service Providers (PSPs) — e-wallets, banks, and other financial institutions facilitating these transactions. Under the proposal, these entities must secure prior BSP authority to offer online gambling payment services.

This privilege depends on meeting strict criteria, including minimum capitalization of P300 million.

PSPs must also maintain “strong anti-money laundering and counter-terrorism financing risk management” systems. This function ensures only financially sound and compliant institutions operate in high-risk platforms.

Central to the BSP’s strategy is creating the Online Gambling Transaction Account (OGTA). This account must be created specifically for online gambling, funded exclusively through on-us transfers from the eligible account owner.

By mandating separate OGTAs, the BSP aims to force deliberate decision-making while creating auditable fund trails.

To enforce this, PSPs will implement enhanced know-your-customer measures, including mandatory facial biometric verification for account opening.

The circular will amend specific sections of the Manual of Regulations for Payment Systems to establish these new compliance requirements. PSPs must also conduct periodic reverifications to maintain account integrity and prevent unauthorized access by restricted individuals.

OPERATIONAL LIMITS
The circular imposes strict OGTA operational limitations, establishing daily funding limits not exceeding 20% of primary account average daily balance.

It mandates “transaction windows” not exceeding six hours per day and 24-hour “cooling-off periods” following “heavy usage.”

Heavy usage, among other considerations, is to be defined by PSPs through their company-specific Responsible Online Gambling Policy. These policies should be intended to promote responsible gambling and enable account owners to exercise self-control and prevent gambling addiction.

Once OGTAs are created, all lending options within the same digital platform must be disabled. This measure could sever dangerous links between gambling and reckless spending.

In the draft circular, Online Gambling Operators (OGOs) face strict onboarding requirements through PSPs, which must treat them as “high-risk merchants.” This entails enhanced due diligence, including beneficial ownership verification to identify ultimate natural persons behind corporate structures.

PSPs must verify if OGOs are properly licensed by appropriate government agencies like PAGCOR and maintain good standing.

INDUSTRY PREPARATIONS
The financial technology (fintech) sector is implementing comprehensive systems while bracing for challenges.

Fintech Alliance.PH Chairman Angelito “Lito” M. Villanueva said that members have declared “zero tolerance policy on misuse of digital payment platforms by illegal businesses, especially online gambling.”

“Our members are already putting in place robust due diligence measures and real-time monitoring systems,” Mr. Villanueva, who also sits as Rizal Commercial Banking Corp. executive vice-president and chief innovation and inclusion officer, said in an e-mail.

“This means stricter onboarding for licensed gaming merchants, blacklisting of unregulated sites, and detection tools to flag suspicious activity.”

The Alliance supports proactive, risk-based approaches beyond simply blocking transactions. “We are recommending tools such as transaction caps, time-based restrictions, and self-exclusion features built directly into user interfaces,” Mr. Villanueva said.

Financial institutions are developing internal safeguards to prevent staff from participating in online gambling.

“Many of our members have introduced internal awareness campaigns, stricter HR compliance protocols, and even employee self-exclusion policies,” Mr. Villanueva added.

“If we, the fintech industry players, are safeguarded against gambling risks, then so are the consumers we serve.”

Mr. Villanueva further said that a delicate balance between compliance and user experience has to be made.

“We need proper safeguards without creating unnecessary friction for legitimate digital transactions.”

There are legitimate concerns about implementation costs, though Mr. Villanueva said the Alliance’s position is clear.

“Consumer protection and financial integrity are investments, not expenses,” he said.

Major players have signaled alignment with regulators. In separate statements, GCash and Maya said they will comply with the BSP’s directive immediately. Both e-wallets subsequently dropped links to gambling sites on their platforms.

According to the results of a survey conducted by research firm The Fourth Wall, GCash emerged as the most-used e-wallet app, cited by 92% of respondents, followed by Maya (6%).

“When BSP ordered removal of in-app gambling links, Maya acted swiftly and complied within the mandated period,” Maya said in an e-mail statement to BusinessWorld.

“Maya fully supports the BSP’s efforts to ensure the responsible use of digital financial services, safeguard system security, strengthen consumer protection, and promote financial inclusion.”

Despite industry cooperation, debates emerge about whether regulation is enough.

“We need to go beyond taking down icons and links,” said Mr. Villanueva.

The Alliance plans comprehensive guidance for dispute resolution.

“I would like to create and execute an encompassing ‘bible book’ that will compile these concerns, protocols, and best practices,” Mr. Villanueva said.

THE HUMAN COST
The BSP’s urgency for regulation is underscored by alarming rates of addiction.

Jayvee Vargas, representative for rehabilitation center Bridges of Hope, revealed during a video interview that “seven out of 10 people admitted to our facilities have gambling disorders.”

Bridges of Hope Drugs and Alcohol Rehabilitation Foundation, Inc. is a PAGCOR-accredited help center with 15 branches nationwide.

“I’ve seen in the last five years, I’ve seen it almost double,” Mr. Vargas said, describing the trend as “scary.”

COVID-19 served as a key point when the lockdown drove people to online gambling. However, Mr. Vargas said accessibility is the fundamental issue. “For me, that’s the first problem. It’s very accessible to the public,” he said.

The barriers to entry are minimal. “All you need is capital of P100, and then you can have access to it already,” he said. “You can bet in cents.”

Gambling addiction affects all social strata without discrimination. “Some come from wealthy families. Some come from the lower bracket. It affects everybody.”

Current age verification systems remain fundamentally flawed. “There’s no way to validate the age. You just have to tick, like, a box [saying] ‘Okay, I’m 21 years old,’” Mr. Vargas said. “But there’s no measure that says, ‘Now, show me proof that you’re 21.’”

The addiction cycle follows predictable patterns. “When you have that habit of gambling, you’re always thinking about the wins and not anymore the losses.”

Similarly, the bike taxi driver said that gambling is “like drugs.”

“If you don’t know how to control yourself, you’ll really be addicted to it. That’s why you see, they removed it from GCash… But, we can still gamble.”

The driver added that illegal gambling sites do not impose cash-in limits.

“Because with sites, you really can’t stop the sites. They get a lot from that.”

PROHIBITION VS REGULATION
Mr. Vargas views daily caps and time limits as improvements. “I think that’s better than none,” he said regarding proposed time limits.

However, he said that determined addicts may explore jailbreaks. “The only cap is the limit of how deep their wallet goes,” Mr. Vargas said, regarding self-imposed caps. “If there are limits, daily limits, I’ll just max out the daily limits if I’m really addicted.”

Cooling-off provisions and pop-up risk messaging may provide some benefit. “I think it will have some effect,” Mr. Vargas said, drawing parallels to anti-drunk driving campaigns that have reduced road accidents.

The exclusion of vulnerable groups receives strong support. “I think it’s good to protect that, especially minors and senior citizens,” Mr. Vargas said. For elderly gamblers, “they’re supposed to be relaxing, enjoying life, right?”

The debate ultimately centers on whether regulation suffices or outright prohibition becomes necessary. Mr. Vargas maintains conditional support for regulated access.

“If gambling operators and regulators have robust safety measures for the gaming public, then I don’t believe we need to remove access,” he said.

“But if there’s no robust measure. We’re kind of playing with fire,” he added.

Mr. Villanueva advocates stronger measures given escalating social costs. “The social costs outweigh the financial benefits,” he said.

“A clear and decisive stance will help protect Filipinos from gambling addiction dangers becoming too easy through digital channels.”

A critical risk involves potential migration to illegal platforms. “There could be spillover to the illegal gambling sites,” Mr. Vargas said. “That’s what we have to watch out for — how to stop those sites from existing.”

The driver said that industry giants like GCash should be allowed to provide services on online gambling sites.

“What they should do better there: just bring it back to GCash. Because that’s where they’ll earn.”

The driver added that gambling is a universal reality that should be regulated instead. “Almost all people in the world gamble. There’s no person who doesn’t gamble. Even those who go to church, they gamble.”

“So, even if you’re good, if you hold cards, you’re still a gambler.”

However, Mr. Villanueva said that regardless of their legality, online gambling sites “still allow users to connect their e-wallets and even bank accounts directly.”

“These wallets should be delinked completely from gambling transactions, period.”