Philippine Central Bank Finds 8,000 Salons and Bakeries Were Casino Fronts

Thousands of PHP50 payments after midnight to businesses that on paper were beauty parlours and corner shops turned out to be bets. The BSP has shut the merchant accounts and drafted rules that put the burden on GCash, Maya and their aggregators to know who they are paying. PAGCOR's chairman: "Unfortunately, we don't have control over that."

• The Bangko Sentral ng Pilipinas (BSP) found thousands of merchants on electronic payment platforms that were on paper beauty salons, bakeries and mom-and-pop stores but were accepting thousands of payments of as little as PHP50 ($0.80) past midnight, which turned out to be online casino bets, Deputy Governor Mamerto Tangonan told Bloomberg; more than 8,000 merchant accounts have been shut for allegedly illegal activity
• A draft circular would require payment service providers to collect owner details and licences for every merchant they connect, keep databases of legitimate merchants, and route casino and wagering businesses through direct merchant arrangements with enhanced due diligence rather than through aggregators; repeated failures could cost a provider its payment licence
• "We want to protect consumers from online fraud, illegal activities and also from money launderers," Tangonan said. "If there are illegal activities and you're not able to stop it, then you are accountable"
• PAGCOR chairman Alejandro Tengco said the regulator knows many innocuous-sounding businesses are unregistered online casinos and is working with the central bank; "unfortunately, we don't have control over that", he said
• Maya and the EMoney Association of the Philippines said they support the measures; GCash, whose parent Mynt is preparing a record initial public offering next month, did not immediately respond to Bloomberg and later expressed support, according to World Casino Directory

Bets Disguised as Haircuts

The Philippine central bank is tightening the rules on who may take electronic payments after its surveillance found that thousands of merchants presenting as ordinary small businesses were processing online casino wagers, Bloomberg reported on Wednesday in an interview with BSP Deputy Governor Mamerto Tangonan. The pattern that raised the alarm was timing and size: merchants that looked unremarkable on paper were receiving thousands of transactions of as little as PHP50, about $0.80, past midnight and into the early hours. When the central bank looked closer, the payments were bets. Beauty salons, bakeries and mom-and-pop stores were among the identities used, and more than 8,000 merchant accounts have since been closed for allegedly illegal activity.

The route in was the merchant aggregator, the intermediary that connects many small businesses to a payment platform at once. Aggregators are how e-wallets such as GCash and Maya have extended formal payments across an archipelago of more than 7,000 islands, and they are paid to sign up as many merchants as possible, most of them legitimate. The BSP's draft circular, titled "Regulations to Strengthen Integrity Controls in Payment Transactions" and first reported by The Philippine Star on 7 September according to The Crypto Times, would require payment service providers to collect more information on each merchant they link, including ownership and licences, to maintain databases of legitimate merchants, and to treat arrangements that obscure the real merchant, beneficiary or settlement account as restricted. Casino and wagering businesses, online operators included, would have to be onboarded through direct merchant arrangements with enhanced due diligence and monitoring, not through a layer of intermediaries. "If there are illegal activities and you're not able to stop it, then you are accountable," Tangonan said; repeated violations could lead to revocation of a payment licence.

The Philippine Amusement and Gaming Corporation, which licenses the legal online market, says it is working with the central bank and knows the problem it describes. "Unfortunately, we don't have control over that," chairman Alejandro Tengco told Bloomberg of the businesses that are unregistered casinos in all but name. PAGCOR is preparing an app to help players identify licensed sites, expected before the end of the year, World Casino Directory reports, and has put the licensed share of Philippine online gambling at about 50%, against industry figures of as much as 75% before direct e-wallet links to operators were removed last year.

The Payments Industry Says Yes

The companies that would carry the new obligations have welcomed them, at least in public. Maya said it supports measures that "strengthen the integrity, safety and trustworthiness of the digital payments ecosystem" and already runs merchant onboarding, due diligence and monitoring. The EMoney Association of the Philippines said it fully supports the central bank's goals and is reviewing the proposed circular: "It is important that there is accountability from the industry to ensure that we have a safe digital ecosystem for the market." GCash did not immediately respond to Bloomberg; its parent, Mynt, is preparing what is expected to be a record Philippine initial public offering next month, and Maya, backed by KKR and PLDT, is considering a listing of its own. Digital payments made up about two-thirds of retail transactions in the Philippines in 2025, up from 57% in 2024 and 10% in 2018, Bloomberg reports. Tangonan accepted that stricter checks may slow that growth for a time. "You shouldn't sacrifice safety for growth," he said. "There's no trade-off there."

The E-Wallet Ban Did Not Remove the Rail. It Removed the Label

In 2025 the central bank ordered e-wallets to remove their direct links to licensed operators. Licensed transactions halved, PAGCOR's forecast fell 19%, and the demand went onto messaging and e-commerce apps. What the BSP has now documented is where else it went: into the same wallets, through merchant accounts that said "salon" instead of "casino". The rail was never the problem; the label was, and the operators who lost their labels simply borrowed someone else's. Eight thousand shuttered accounts is the measure of how thoroughly the first intervention was routed around.

Accountability Moves to the Aggregator, Which Is Where the Incentive Was

The draft's important sentence is the one about direct merchant arrangements for gambling businesses. Aggregators are paid to onboard volume and are not paid to ask what a bakery does at 2am, and the BSP is proposing to make that question the payment provider's legal problem rather than the aggregator's commercial one. That is the right place to put it, and it is also the place that costs the most. GCash is about to price an IPO on a growth story built partly on aggregator reach; a circular that says "know your merchant's owner and licence, or lose your own licence" is a cost line in that prospectus that did not exist last week.

PAGCOR's Admission Is the Policy Finding

"We don't have control over that" is not a complaint; it is a description of the regulatory architecture. PAGCOR licenses operators. It cannot see a beauty salon's merchant account, and until this month neither could anyone who was looking for casinos. The Philippine market has now learned what every regulator that squeezes its licensed channel eventually learns, that the bets do not stop, they move to whichever rail is not being watched, and that the agency which can see the rail is the central bank, not the gaming regulator. The BSP has just taken that job. Whether it wanted it is a different question.

The central bank found the casinos by looking at when the bakeries got paid. That is the whole story of Philippine online gambling since the e-wallet ban, in one data point.