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A customer can clear basic identity checks and still present a much bigger compliance risk.
That is especially true in casinos, where high-value transactions, VIP activity, junket relationships, politically exposed persons, complex funding arrangements and rapid movement of funds can make the customer’s risk profile much harder to assess.
In the Philippines, casinos are covered persons under the AML framework and are expected to apply customer due diligence using a risk-based approach. Where the money-laundering or terrorist-financing risk is higher, enhanced due diligence becomes necessary to understand not just who the customer is, but where the money came from, how the customer accumulated wealth and whether the activity makes sense.
The focus has become even sharper in 2026. PAGCOR issued new guidance around corruption-linked casino abuse and its second casino-sector AML/CTF risk assessment, both of which emphasise stronger CDD, EDD, ongoing monitoring and suspicious transaction reporting.
What Is Enhanced Due Diligence?
Enhanced due diligence is a deeper review of a customer or relationship when standard customer due diligence is not enough to understand or manage the level of financial crime risk involved.
Customer due diligence typically establishes who the customer is, verifies relevant information and provides an initial view of their risk profile.
Enhanced due diligence goes further by examining the factors behind that risk. Depending on the case, the review may include:
the customer’s occupation, business interests and background
source of funds
source of wealth
PEP screening
adverse media checks
beneficial ownership and connected parties
the purpose of the relationship
expected transaction or gaming activity
additional verification of information provided by the customer
For junket activity specifically, PAGCOR’s 2nd Casino Sector AML/CTF Risk Assessment highlights the higher risks associated with junket and VIP relationships, including concerns around source of funds, source of wealth and transparency of customer activity.
When Should Casinos Conduct Enhanced Due Diligence?
EDD should follow risk rather than simply transaction size.
A high-value transaction may be legitimate. A lower-value transaction may still be concerning when viewed alongside the customer’s identity, relationships or behaviour.
Casinos should therefore consider enhanced review when the overall customer profile indicates elevated risk.
This can include customers with PEP exposure, junket-linked players, unexplained wealth, adverse media, complex third-party relationships, unusual transaction activity or behaviour that does not fit the customer’s known financial profile.
What Should an Enhanced Due Diligence Report Include?
An enhanced due diligence report should help a reviewer understand the customer, the reason for the review, the evidence considered and the resulting risk decision.
It should not repeat the onboarding file without adding context.
A useful EDD report should address five areas.
1. Customer profile
Confirm the customer’s identity and relevant background, including occupation, business interests, ownership interests and important relationships.
2. Reason for enhanced review
Explain what triggered EDD. This may be PEP exposure, a junket relationship, adverse media, unusual activity, unclear source of funds or another high-risk indicator.
3. Additional verification
Record the information reviewed beyond standard customer due diligence. Depending on the risk, this may include business records, ownership information, connected parties, independent sources and financial documentation.
4. Financial context
Assess whether the customer’s source of funds, source of wealth and known financial capacity are reasonably consistent with their casino activity.
5. Risk decision
Document the outcome clearly. The relationship may continue without change, require additional controls, move to more frequent monitoring or need further investigation and escalation.
A good report should allow another reviewer to understand how the evidence led to the final decision. That is more useful than a large file of documents with no clear assessment.
Source of Funds vs Source of Wealth: What Should Casinos Verify?
This distinction deserves its own section because the two terms are often used together but answer different questions.
Source of Funds
Source of funds explains where the money used in a specific transaction or relationship came from.
Examples might include salary, business income, sale proceeds, investments or another identifiable financial source.
For casinos, this helps answer: Where did the money being used for this gaming activity actually come from?
Source of Wealth
Source of wealth explains how the customer accumulated their overall wealth over time.
That might involve business ownership, investments, employment, inheritance or other legitimate economic activity.
The question becomes: Does the customer’s overall financial position reasonably support the level of activity we are seeing?
Philippine casino rules already require source-of-funds information as part of minimum customer information, while PAGCOR’s junket-risk assessment explicitly points to detailed source of funds and source of wealth for higher-risk junket players.
This is why the two should not be treated as interchangeable. A customer may be able to explain where one transfer came from without adequately explaining how they accumulated enough wealth to sustain repeated high-value casino activity.
PEP Screening and High-Risk Casino Customers
A politically exposed person is not automatically involved in suspicious activity. PEP status does, however, introduce additional corruption and bribery considerations that may justify stronger due diligence.
For casinos, PEP screening should therefore be viewed as part of an ongoing risk assessment rather than a single check completed when the customer first enters the relationship.
The review may need to consider the customer as well as relevant family members, close associates, related businesses and beneficial owners.
This matters because financial crime risk does not always sit directly with the person whose name appears on the casino account. Relationships, ownership structures or the involvement of another party may provide the context that changes the risk assessment.
Common EDD Red Flags in Philippine Casinos
Red flags are indicators that something requires closer examination. They are not, on their own, proof of money laundering or another financial crime.
Some of the issues that may justify enhanced due diligence include:
Activity that does not match the customer's financial profile
Transaction or gaming volumes appear difficult to reconcile with the customer’s occupation, business activity, income or known wealth.
Unclear source of funds
The customer cannot provide a consistent or reasonably supported explanation for where the money originated.
Third-party funding
Money is provided or received by unrelated individuals, businesses or intermediaries without a clear economic explanation.
Limited gaming despite significant movement of value
Large amounts enter or leave the casino environment while actual gaming activity appears limited or inconsistent with the movement of funds.
Complex junket or intermediary relationships
Multiple people or entities are involved in moving or controlling funds, making the underlying customer activity harder to understand.
PEP, corruption or adverse media exposure
Public information creates questions about the customer’s business dealings, political exposure, associates or possible involvement in misconduct.
Unusual cash movements or layered transactions
Transactions involve patterns or structures that make the origin, ownership or destination of funds harder to establish.
PAGCOR’s 2026 corruption-related guidance specifically asks regulated casinos to use relevant red flags when considering CDD, EDD, ongoing monitoring and suspicious transaction reporting, aligning with its broader casino AML compliance framework and red flag directives. BSP’s 2026 guidance on casino junket operations similarly highlights unusual cash movements, complex ownership structures and layered transactions as areas requiring closer attention.
The presence of a red flag should lead to further review. Whether the activity ultimately requires escalation or reporting depends on the facts of the case and the institution’s assessment.
What Happens After the EDD Report?
This is where many EDD processes become weak. A report gets completed, approved and stored. Then nothing changes. That defeats the purpose. EDD findings should influence the customer’s broader risk treatment.
If EDD identifies elevated risk, the institution may need to adjust the customer’s risk rating, increase review frequency, strengthen transaction-monitoring controls or escalate unusual activity for further investigation. For higher-risk junket relationships, PAGCOR guidance refers not only to EDD but also to enhanced ongoing transaction monitoring.
So the stronger workflow is: EDD finding → Customer risk update → Monitoring changes → Alert prioritisation → Investigation → Ongoing review
For a deeper look at the specific risks created by casino intermediaries, see ZIGRAM’s guide to junket operators and casino AML risks in the Philippines.
Enhanced Due Diligence Checklist for Casino Compliance Teams
An enhanced due diligence checklist can help reviewers confirm that the important questions have been addressed before a case is closed.
Before completing an EDD review, consider whether:
the reason for conducting EDD has been clearly documented
the customer’s identity and relevant relationships have been verified
source of funds has been reasonably established
source of wealth has been assessed where relevant
PEP, sanctions and adverse media risks have been reviewed
beneficial owners and connected parties have been considered
the customer’s financial profile is consistent with observed activity
unusual third-party transactions or relationships have been investigated
the final risk decision is supported by the evidence collected
monitoring or review requirements have been updated where necessary
The checklist should support judgement rather than replace it. Two customers may trigger the same risk indicator but require very different conclusions once their circumstances are understood.
Moving From One-Time EDD to Continuous Risk Review
Customer risk does not remain static.
A customer who presented few concerns at onboarding may later become politically exposed, appear in adverse media, establish new business relationships or begin transacting in a way that differs materially from their previous activity.
That is why effective enhanced due diligence also depends on ongoing monitoring.
Screening results, changes in customer information, transaction behaviour and investigation outcomes should help compliance teams decide when a customer’s risk assessment needs to be revisited.
BSP’s July 2026 guidance on customers engaged in casino junket operations also highlights ongoing monitoring, enhanced due diligence for high-risk clients, automated transaction monitoring and client-link analysis among the practices financial institutions should maintain.
At ZIGRAM, DueDiliger supports research-led due diligence by bringing together information that can help analysts identify potential risk indicators. The Complete AML System connects customer risk assessment, screening, transaction monitoring, alerts and investigations across the wider compliance process.
For casino compliance teams, the value of EDD ultimately comes down to one thing: having enough reliable context to make a defensible risk decision.
FAQs
What is enhanced due diligence in a casino?
Enhanced due diligence is a deeper review applied to higher-risk casino customers or relationships. It can include additional identity verification, source-of-funds and source-of-wealth checks, PEP screening, adverse-media research and enhanced ongoing monitoring.
What should an enhanced due diligence report include?
An EDD report should explain why enhanced review was triggered, what additional information was verified, what risks were identified, how source of funds or wealth was assessed and what final risk decision was made.
What is the difference between source of funds and source of wealth?
Source of funds explains where the money used for a specific transaction came from. Source of wealth explains how the customer accumulated their overall wealth.
When should casinos conduct EDD?
EDD should be considered when a customer’s risk is higher than normal, including cases involving PEP exposure, junket relationships, unclear funding, adverse media, unusual activity or other elevated financial-crime indicators.
Are junket players considered high risk in the Philippines?
PAGCOR’s published junket-risk assessment identifies junket players as presenting high ML/TF risk and describes the application of enhanced due diligence and enhanced ongoing transaction monitoring.
Does EDD end once the report is completed?
No. Findings from EDD should feed into the customer’s risk rating, monitoring intensity and future reviews. Material changes in customer risk may require the EDD assessment to be revisited.
