Cambodian Gambling Industry Preparing to Welcome Investors
Jun 25, 2014
Authorities in Cambodia are in the process of amending the country’s gambling laws, in order to attract major casino operators.
Officials are planning to change the face of the Cambodian gambling industry, local news have reported. According to the Phnom Penh Post, regulators are considering opening up the casino market to new investors and the draft law could be finalized by the end of the year.
The newspaper said online gambling could also be included in the package, which means it’s only a matter of time before Cambodia’s first mobile casinos are launched. So does the future have in store for local and foreign players? Let’s take a more detailed look at the Cambodian gambling industry.
Appealing, but complicated
Several gaming companies have been interested in investing in Cambodia for a long time now. With gambling being so popular in Asia, the country has a great potential which is worth exploring. But at the moment, the local market is dominated by Hong Kong-listed Naga Corp Ltd, which runs a casino resort located in Phnom Penh and called Naga World.
Recent casino gambling newssay the company has a 70-year license for land-based casino gaming, which is valid until 2065. Naga Corp also holds a 41-year monopoly on all gambling activities within a 200-kilometre radius of the capital city. This privilege is valid until the year 2035.
There is another reason why many casino developers are looking at Cambodia as a destination for their gambling resorts and that is because of its low tax regime. However, potential investors still have concerns regarding the current legal framework and the scrutiny they’re subjected to.
The local market does have its appeal, but legislators have to make some efforts to convince investors to come to Cambodia. A change in the country’s gambling laws could solve all of these problems and open up the market.
Gambling for locals – legal or forbidden?
The news that Cambodian officials are working on a new law was also spread by GGRAsia, a website about the Asian sector of the casino industry which claims to have received the information from a well-backed source.
The source said that local players are allowed to gamble in a few casinos across the country, even though this is officially forbidden. The ban is “poorly enforced and subject to ad-hoc discretion”, the person told GGRAsia, adding that this “creates a worse-off business environment for operators and investors,” the person claims.
As far as the new legislation is concerned, it is not yet known whether these rules will continue to apply for locals, or whether the ban will be lifted. Industry experts believe Cambodia wouldn’t be very appealing to foreign investors if only tourists were allowed at the casinos.
Ros Phirun, a spokesman for the Ministry of Economy and Finance’s gaming and casino department, was quoted saying that the new bill would be stricter, but more transparent than the previous legislation.
Last year, Cambodia was visited by 4.2 million tourists, according to information released by the state’s Ministry of Tourism. More than 20% of these came from the neighboring country of Vietnam. China is the second largest source of tourists, accounting for 11% of the number of annual visitor.
Investors would prefer a free market, where locals are allowed to gamble, but rumor has it officials are considering following Singapore’s example of imposing a fee on its citizens and permanent residents, while allowing foreigners to gamble free of charge.
Inside sources confirmed that the government is also looking at regulating the online gambling market, although these plans are still far from being finalized. Phirun told reporters at the Phnom Penh Post: “While we don’t provide online licenses yet, it is in the process of being studied.”
At the moment, online betting companies are not allowed to operate from Cambodia. However, it is said that many firms offers such services with the tacit permission of local authorities. If gambling sites become legal, this would create some competition between Cambodia and the Philippines.
So far, the Economy and Finance Ministry has awarded 56 casino licenses for 7,660 slot machines and 2,568 gaming tables across the country. In 2013, the state earned US$22 million from gambling-related activities, which means the local market has a significant potential. With new casino laws, it would only get better and better.
Tags: Cambodia, Cambodian gambling industry, casino gambling news, Economy and Finance Ministry, GGRAsia, Ministry of Tourism, mobile casinos, Naga Corp Ltd, Naga World, Philippines, Phnom Penh Post, Ros Phirun