Cambodia Captures Cash from Surging Number of Casino Licenses

Posted on: June 15, 2019, 01:00h. 

Last updated on: June 14, 2019, 07:52h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

News that Cambodia issued at least 13 new licenses for gaming venues so far this year raises some questions since many of the nation’s casinos never open while others are in different phases of construction.

Government officials from the East Asian nation have approved a total of 163 licenses, but only 51 gaming venues are even operating, GGRAsia reported, citing an article in the Khmer Times.

The Cambodian newspaper attributed the latest numbers to Ros Phearun, who works at the nation’s Ministry of Finance. He said that 91 of the issued licenses were for casinos in Preah Sihanouk Province, which includes the gaming hub of Sihanoukville.

A news report in January said a total of 150 licenses had been issued as of last December. That is a 53 percent jump over 2017, according to the Phnom Penh Post.

Sophal Ear, a professor of diplomacy and world affairs at Occidental College in Los Angeles and who has written extensively on Cambodia, told Casino.org the large number of licenses raises questions.

It’s easy money and the truth is no one’s talking about the reason for so many casinos –could it be money laundering?”

He points out, too, that the number of licenses issued in Cambodia is more than Las Vegas or the Chinese gaming enclave of Macau.

“The problem is going from a license to a building,” he explained. “Some never materialize — 51 in operation is still a lot for a country of 16 million.”

“Handing out casino licenses like candy evokes the Wild West,” Ear added. “It’s anyone with a lot of cash who needs to launder — so there are no questions asked about where the source of funds comes from…. Cash is king.”

The Khmer Times reported that the Cambodian government is predicting its tax revenue from the gambling sector will total $70 million in 2019, up from $46 million last year. The Phnom Penh Post additionally reported the annual license fee is $40,000.

More Is Better Approach

But continuing to issue so many licenses may not be the best way to develop a successful gaming market.

“Why not focus more on quality and have a vision for what it is you want as a country instead of only seeing dollar signs whenever someone shows up willing to pay for a casino license,” Ear said. “When it comes to casinos, their view of the world seems to be that more is better.

“As long as money is coming into their pockets, they will say yes — no one has paid them sufficiently so far to stop issuing licenses, except for NagaCorp, and that was for exclusive rights over Phnom Penh [for NagaWorld],” Ear added. Already operating two casinos in the nation’s capital, NagaCorp plans to open a $3.5 billion resort casino there in 2025.

Many of the brick and mortar casinos in Cambodia are targeting patrons from China — as well as Chinese ethnic gamblers in the greater China region or anyone with a foreign passport who can enter the casinos, Ear said.

Judy Ledgerwood, an anthropologist and dean at Northern Illinois University, who has studied Cambodia, points out that casinos “are supposed to be for foreigners, not for Cambodian citizens — who are prohibited from gambling.”

Beyond NagaWorld, she noted there are gaming venues along the Thai border that draw in residents of Thailand and some along the Vietnamese border for the Vietnamese.

The government has expanded the region’s airport to handle larger aircraft, she added. Overall, 2 million Chinese visited Cambodia last year, according to the Phnom Penh Post, but she did not have specific numbers on how many were visiting to gamble.

The online gaming business is also growing, and Cambodia wants to host online casinos and be a hub for that, Ear said.

Safety Concerns

There are sometimes concerns over the safety of visitors. A casino in Sihanoukville, was accused in April of beating eight Chinese gamblers suspected by casino management of cheating.