Crackdown in Cambodia

What’s on the cards for Cambodia’s gambling sector?

SiGMAnews spoke with Ros Wade from Asia Gaming Brief to get to the bottom of recent events in the country following their inaugural Mekong Gaming Summit in Phnom Penh.

In August 2019, Cambodia shocked the Asian gambling industry with what seems to be a sudden U-turn on the country’s previously pro-online gambling stance. Following a period of boom in the granting of casino licenses to boost Cambodia’s tourism sector as a destination for visiting Chinese gamblers, the government announced on August 18th this year that all online and arcade gambling in the Kingdom should cease operations by the end of the year.

The decision by Prime Minister Hun Sen included a statement that “Cambodia needs to develop the country’s base on natural and cultural heritage tourism but not based on an income from online gambling.”

Ros Wade, AGBrief

Sihanoukville had been the focus of the newly developed gambling sector in Cambodia, with more than 60 casinos already licensed there and a construction boom in the beachfront town that was previously a haven for western backpackers. The apparent future fortunes of the town are closely tied to it becoming a Southeast Asian Macau, rivaling Macau’s gambling region that has long been a hotspot for Chinese gamblers.

Live dealer tables are still streaming to online clients, most likely in China, and many believe the ban was not targeted at this kind of operation, which is carefully set up to ensure transparency and fair play.

However, many industry insiders say that the situation may not be so clear cut, with casinos in Sihanoukville still currently offering live dealer operations for their online gambling audiences.

“Many of the casinos in Sihanoukville are continuing to offer online services, at least until the end of the year when their online gaming licenses will expire. The Cambodian government has said that these licenses will not be renewed in 2020, but there still appears to be some ambiguity about the extent of the ban or whether it will be permanent,” says Roz Wade.

So it seems that industry insiders see the current confusion as a bump in the road while the Cambodian government finds a way to regulate activities. There has been talk of appointing a master licensor, with major industry names already jostling for position.

But what role does China play in this story? It’s thought that the Chinese authorities are the driving force behind the Cambodian government’s abrupt about-face in their online gambling aspirations.

Across the Southeast Asian territories, Beijing’s decision to put pressure on the Philippines and Cambodia to crackdown on online gambling operations sent shockwaves through the sectors in both countries.

So how will Cambodia unscramble the uncertainty in the sector?

Roz Wade thinks that “The Cambodian government is planning to publish long-awaited legislation to regulate its gaming industry in early 2020, covering taxation systems and established gaming zones. This should help to clarify the situation for industry players.”

Of course, it’s not just Cambodia that seems to be in the firing line with the Chinese crackdown. The Philippines is also looking to appease China, with the Philippine Amusement and Gaming Corporation (PAGCOR) suspending the issuing of new online licenses at least until the end of 2019.

PAGCOR chairperson Andrea Domingo says she plans to use the suspension to address all the concerns, yet it seems unlikely this will appease Beijing which would like to see online gambling banned in the Philippines.

What does the future hold for the region as a whole?

Roz concludes, “It’s a good sign that regulators around the region are thinking seriously about online gambling and taking measures to make sure that it is properly regulated and administered. Serious investors prefer to have clear guidelines so that they can make long-term, sustainable business decisions.”

 

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For those planning to attend SiGMA Manila, AIBC Manila and ICE Asia at SMX on June 8-9th, this is the buzzing business environment to be expected:

 

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