By Luisa Maria Jacinta C. Jocson, Senior Reporter

THE proposed rules floated by the Bangko Sentral ng Pilipinas (BSP) to regulate the participation of payments services in online gambling are unlikely to change problematic behavior among gamblers, according to a senior lawyer.

Geronimo Law founder and Managing Lawyer Russell Stanley Q. Geronimo said in a commentary that some of the institutional compliance provisions of the BSP circular “while necessary, are unlikely to change or curb harmful gambling behavior among vulnerable users or alter the supply-side conditions that enable it.”

The BSP recently released a draft circular to regulate the payments side of online gambling to deter the misuse of financial services.

The booming gaming industry in the Philippines is now drawing heightened scrutiny amid concerns over rising addiction and financial problems.

The Department of Finance (DoF) 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 cash-in.

Under the BSP’s proposed circular, these regulations could cover payment service providers (PSPs) engaged in these services as well as operators of a payment system (OPSs) serving as payment acquirer or aggregator of the online gambling operator.

“Notably, only one out of ten substantive provisions in the draft circular directly addresses player-level transaction restrictions,” Mr. Geronimo said.

He said the other provisions focus on institutional compliance, onboarding procedures, and reporting obligations.

“I have no doubt that the largest payment providers have the financial and legal resources to meet these requirements. Likewise, the most established gambling operators already maintain compliance departments and legal teams capable of adapting to the draft circular’s proposed framework.”

The central bank would require PSPs to provide a facility for the creation of a separate online gambling transaction account (OGTA) for eligible account holders.

Under the draft rules, the transfer of funds to the OGTA will be subject to a daily limit that should not exceed 20% of the average daily balance (ADB) of the eligible owner’s transaction account. Incoming fund transfers beyond this limit must be rejected by the PSP.

Mr. Geronimo said the 20% limit is a “weak and ineffective deterrent.”

“Low-income users, who are most at risk, often maintain small balances (e.g., P500 to P1,000).” These users could still gamble P100 to P200 per day, he said, which would still be a “substantial portion” of the daily minimum wage.

“For low-income users living on tight daily budgets, gambling P100 to P200 a day can mean skipping meals, delaying utility payments, or forgoing transport to work.”

“At that scale, it directly undermines household stability and financial resilience. What may appear modest in absolute terms is, in relative terms, economically destabilizing for the poor.”

In place of the 20% limit, Mr. Geronimo recommended introducing tiered transaction limits with absolute caps tied to user verification and financial capacity.

“The current one-size-fits-all 20% of ADB cap fails to distinguish between users with vastly different financial profiles,” he said.

“Users should be classified into tiers based on the depth of identity verification and proof of income or economic standing. Each tier should have corresponding limits on OGTA funding,” he added.

Meanwhile, Mr. Geronimo also noted the provision on PSPs setting a transaction window within which online gambling payment services could be offered.

This transaction window should not exceed six hours per day, according to the draft circular. He said this measure “does little” in curbing gambling behavior.

“Limiting gambling payments to a six-hour daily window does not reduce the total volume or intensity of gambling; it merely compresses it into a narrower time band,” he said.

“Users with compulsive behavior or high intent to gamble will simply adjust their activity to match the permitted window. Moreover, the rule does not prevent multiple PSPs or platforms from offering overlapping windows, effectively nullifying the time-based restriction.”

In place of the six-hour window, Mr. Geronimo said the BSP can opt for “controls based on transaction frequency and fund velocity, which better capture compulsive or high-risk usage.”

He also pointed out that some definitions in the draft rules should be more clear and uniform, such as the term “heavy usage.”

Under the proposed regulations, “in cases of heavy usage of the online gambling payment service, as defined by the PSP concerned, a 24-hour cooling off period shall be implemented.”

“This undermines the credibility of the provision and creates a clear conflict of interest and moral hazard,” he said.

“PSPs, particularly those that benefit from high transaction volumes, have no commercial incentive to define or enforce heavy usage rigorously. As a result, this mechanism risks becoming purely formalistic or inconsistently applied.”

“Heavy usage” could be measured by cumulative OGTA top-ups exceeding P2,000 or more than 10 gambling-related transactions, he added.

“The absence of a BSP-prescribed threshold also invites regulatory arbitrage, where the same behavior may be treated differently depending on the platform,” he said.

Mr. Geronimo also recommended several other enhancements to the draft circular, such as revising the disabling of lending options within the platform to be more clear and strengthen the self-imposed limits and user-initiated safeguards.

“Several key protections (such as the option to disable OGTA, pop-up alerts, and advertising restrictions) are embedded as part of a policy document rather than mandated as industry-wide technical implementations,” he said.

“This approach lacks enforceability and risks being reduced to boilerplate compliance without real operational impact.”

The draft is open for public comment until July 25.