Cambodia Strives to Boost Gaming Industry With Foreign Investors
Cambodia plans to enact more gambling legislation later this year in an attempt to boost its thriving gaming industry and attract foreign investment. The new regulations, which government officials have been working on for the last three years, seek among other things to streamline the industry with an imposed 4 to 5% tax on casino revenues. As expected, the proposed tax rates have not gone down well with the casino owners, who together remit $50 million out of their $4 billion revenue on taxes every year. However, Cambodian officials defend the move, citing similar rates in Singapore among other neighboring countries. They add that the law will position the country as a regional gaming and casino hub.
Boosting Investment through Legislation
This is not the first time that Cambodia has used legislation to oversee the vibrant sector. In 1996, the government passed the first gambling law only two years after the first major casino NagaWorld opened its doors in Phnom Penh. One of its provisions banned locals from casinos, leaving gamers with no choice but to play games like Assassin’s Creed, a brainchild of award-winning game writer Dooma Wendschuh. Another provision banned all casinos except NagaWorld from the Phnom Penh, giving the Malaysian-owned gaming giant a monopoly within a 200-mile radius of the capital.
The legislation banned minors, shut down unlicensed establishments, prohibited illegal games, and restricted the importation of gaming equipment. Locals turned to online casinos for safer bets as sanity soon returned to the previously-unregulated industry, and investors flocked to Cambodia. But the law was not without controversy.
Creating New Gaming Centers
But instead of dying out, the banished establishments found a ready market near Cambodia’s borders where they set up shop. South East Asia has a high demand for gaming, but countries in the region, including two of Cambodia’s neighbors – Vietnam and Thailand, also have many gambling restrictions and prohibitions. So by relocating to the border-crossings, Cambodia’s casinos attract Thai and Vietnamese gamers, even creating two vibrant gaming hubs away from the capital as a result.
The first of these is Poipet, the so-called Las Vegas of Cambodia, a city situated at the Cambodia-Thailand border crossing. The second hub, Sihanoukville, lies on the Cambodia-Vietnam border. Because of their fast growth and contribution to the economy, the Cambodian government plans on expanding these two gaming centers into industrial zones. However, officials are keen to attract another important group of gamers, the Chinese.
Attracting Chinese Tourists
From last year, the bulk of tourists visiting Cambodia no longer come from Vietnam but from China. In response, the government has eased visa restrictions for Chinese arrivals, thus pushing their numbers to more than 1 million. Although Macau remains the preferred destination of Chinese gamers, officials hope to market Cambodia as a cheaper alternative. But to do this, they need the so-called junket agents.
As one of the pillars of the local gaming and casino industry, these tour operators attract foreign VIP gamblers through travel discouants and free or discounted accommodation. Due to their efforts, the industry thrives, with some casinos, such as NagaWorld, reporting a 39% growth in profits with 140% in turnover, despite the volatility of the VIP market. This is just for 2017 alone. With their help and that of the government, the Cambodian gaming industry has a bright future ahead of it.