The Bangko Sentral ng Pilipinas (BSP) is advancing a plan to implement stricter regulations on digital payment services used in online gambling, citing concerns over consumer protection, financial health, and responsible use of technology. A draft circular, now open for public comment until July 25, outlines sweeping changes that could significantly reshape how payment service providers (PSPs) and operators of payment systems (OPSs) interact with gambling platforms.

At the core of the proposed framework is a mandate to reinforce financial safeguards. The BSP emphasized that the misuse of digital payments for socially harmful activities, such as excessive or unregulated gambling, must be addressed. “It is imperative to ensure that digital payment services of payment service providers are not misused for activities that are socially harmful and detrimental to financial health,” the BSP stated in its draft, according to Business World.

To that end, all PSPs and OPSs seeking to facilitate payments for online gambling must first receive authorization from the BSP. They must also meet strict compliance benchmarks, including a minimum capitalization of PHP300 million and a Supervisory Assessment Framework rating of at least three. These entities will be expected to maintain strong anti-money laundering and counter-terrorism financing (AML/CTF) programs, robust fraud detection systems, and board-level oversight committees dedicated to gambling-related services.

Introducing Daily Cash Limits and Time Restrictions

Under the new rules, gambling-related transactions will be constrained through the use of Online Gambling Transaction Accounts (OGTAs). These specialized accounts must be created voluntarily by eligible users and can only be funded by transfers from the same financial institution.

To prevent excessive spending, the BSP proposes a strict daily cap: funds transferred into an OGTA must not exceed 20% of a user’s average daily balance. Any transfer attempts beyond this limit must be automatically blocked by the PSP. Furthermore, gambling-related transaction windows will be limited to six hours per day. If a user engages in what is deemed “heavy usage,” a 24-hour cooling-off period will be enforced, during which further transactions will be blocked.

Additional Safeguards and Monitoring Requirements

In an effort to protect consumers further, the proposed policy requires that PSPs disable all lending options for users who create an OGTA. PSPs must also integrate biometric security protocols, such as mandatory facial recognition for account setup and regular re-verification, to deter identity fraud.

To enhance transparency and accountability, PSPs are prohibited from embedding links or redirecting users to online gambling platforms through their interfaces. Moreover, each PSP must create monitoring tools and criteria to assess ongoing risk levels associated with gambling-related merchants, which the BSP classifies as “high-risk.”

“PSPs and OPSs concerned shall only engage with online gambling operators that are in good standing and compliant with government registration, permit and other related requirements,” the draft reads. They are also tasked with verifying beneficial ownership and conducting continual risk assessments of gambling merchants they serve.

Promoting Responsible Online Gambling Behavior

As part of the new compliance standards, the BSP is directing PSPs to adopt and publicize a Responsible Online Gambling Policy. This policy must include in-app alerts based on user behavior, clear disclosures on gambling limitations, and readily available access to support resources.

The circular further mandates that PSP employees abstain entirely from participating in online gambling activities. The intent is to foster a culture of ethical business conduct and internal compliance within digital financial service firms.

The proposed rules also outline a tiered penalty system for violations. Monetary fines may reach up to PHP1 million per incident or PHP100,000 per day for continuous infractions. Non-monetary penalties include suspension or permanent revocation of a PSP or OPS’s authority to process online gambling transactions.

In cases of non-compliance, the BSP will notify the offending PSP, which must immediately halt all online gambling-related payment services until full compliance is restored. “The supervising department of the Bangko Sentral shall determine whether there is noncompliance and shall inform the PSP of such noncompliance,” the draft states.

Wider Government and Industry Context

The BSP’s initiative aligns with broader governmental efforts to rein in the expanding online gambling industry. The Department of Finance has floated the idea of taxing digital gaming platforms and limiting user access, while lawmakers such as Senator Sherwin Gatchalian have proposed more stringent restrictions. Gatchalian’s bill includes raising the legal gambling age to 21, banning the use of popular e-wallets like GCash for gambling, and setting minimum top-up thresholds.

Meanwhile, major operators and stakeholders in the gaming industry, including Newport World Resorts, Okada Manila, and Solaire Resort, have expressed support for measured regulation over outright prohibition. In a joint statement, they emphasized their commitment to responsible gaming and compliance with existing PAGCOR standards.

The BSP’s proposal, though still in draft form, represents a significant tightening of the regulatory environment surrounding online gambling transactions. With mounting societal and financial concerns, the central bank appears poised to take a proactive role in shaping a safer, more accountable digital gambling ecosystem in the Philippines.