Cambodia cryptocurrency land based casino
The shutdown caused by the pandemic throughout the second quarter of the year, did not prevent the nagacorp, cambodia’s casino operator, from increasing its profits in the first half of 2020, according to results published thursday.
New online casinos to play for real money
Nagacorp reports gains in cambodia as it expands to other areas
The shutdown caused by the pandemic throughout the second quarter of the year, did not prevent the nagacorp, cambodia’s casino operator, from increasing its profits in the first half of 2020, according to results published thursday.
The hong kong-listed company produced revenue of $ 377.5 million in the first six months of the year, which translates into a 57.6% drop from the first half of 2019. The company’s operating profit also they declined 86% to $ 39.3 million and after-tax earnings plunged 91.6% to $ 20.6 million.
Cambodian authorities have ordered the closure of all casinos in the country since april 1 due to the covid-19 outbreak.
Casinos like nagacorp remained closed until the first days of july when the first VIP players began arriving at the nagaworld company’s property in phnom penh, the capital. A few days later, gambling was resumed in the mass market.
The prolonged closure of the casinos caused a dramatic decrease in sales in the VIP gaming sector of 58%. Although the VIP win rate remained unchanged at 2.8%, resulting in a drop in VIP revenue also from 58% to $ 270.9 million.
Had it not been for the junket operators that kept fixed operations at nagaworld’s naga 2 facility, where high rollers were redirected while casinos remained closed in malaysia, the philippines and macau, VIP results would have been worse, nagacorp said.
One of the last countries in the asia-pacific region to ban chinese travelers was cambodia. This made nagaworld the only gaming option for a relatively short period.
In the first half of the year, the gaming table in the mass market saw a drop of 54.4% and the gain just increased 0.6 points to 9.3%. Consequently, the massive revenue from the table fell 53% to $ 68.4 million. While spending on electronic games machines (EGM) decreased by 62.4%. Profits rose 0.6 points to 9.3%, leaving EGM’s revenue at 57% ($ 32.7 million).
Nagaworld casino operates as a monopoly in and around phnom penh. With the presence of a large group of chinese residents in its facilities on a daily basis, the establishment cushioned the fall of the games in the mass market preventing it from being worse.
The virus equally affected revenue in non-gaming related areas, which also fell by $ 19.2 million in the first half of last year to $ 5.5 million in 2020.
Regarding the expansion plans of the company in naga 3, it has been reported that although with delays the work continues to advance. With the opening of naga 3, the company expects to expand the resort’s total room capacity to about 5,000 rooms by 2025.
Another slow-moving project is naga vladivostok, located in the primorye gaming zone in eastern russia. The property originally planned april 2018, but later announced that it would be in 2019 and this year the work is still overdue. In an update offered thursday, nagacorp said the project “remains largely on track to start operations in 2022.”
Delays in its projects have not prevented nagacorp from considering incorporating more plans into its local expansion agenda. The company has said it plans to “explore viable and profitable [integrated complex] development in the siem reap and sihanoukville areas.”
The latter has numerous chinese-run casinos, most of which are small establishments that focus on online gambling operations. Many of them closed after the government banned online gambling. Perhaps this led nagacorp to think that a resort might be very suitable for that area.
Cambodia land based casinos
O samet resort
asmech/surin border, cambodia
Aranyapathet
poipet, cambodia
Diamond sea hotel & casino
Ekareach street, quarter 3,
sihanoukville, cambodia
National highway 57,
pailin, cambodia
Ekareach street
sihanoukville, cambodia
Good luck 9 casino & hotel
National highway 1
bavet, cambodia
Grand diamond city hotel & casino
988F, group 50, poipet,
paôy pêt, cambodia
Ho wah genting poipet casino and hotel
Holiday palace hotel & casino
Hà tiên vegas entertainment resort
Hà tiên, prek chak, 33,
kampot, cambodia
Phum cham yeam, khum paklong, srok mondoul seyma, koh kong province,
koh kong, cambodia
National highway 1
bavet, cambodia
Lucky 89 mini casino & hotel
Nagaworld hotel & entertainment complex
Samdech techo hun sen park,
phnom penh, cambodia
National highway 68
O’smach, cambodia
Pailin flamingo casino hotel
National highway 57
pailin, cambodia
Sihanoukville group 1 center 1 mittapheap district
sihanoukville, cambodia
998F, group 50, poipet
paôy pêt, cambodia
Princess hotel and casino
Aranyapathet
poipet, cambodia
Street vithey krong, victory beach
sihanoukville, cambodia
Star vegas international resort and casino
292 mao ze tung road – kamchamkamoru aranyaprathet-poipet border
poipet, cambodia
Titan king resort & casino
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Guide to casinos in cambodia
Cambodia is becoming one of the most popular destinations for casino gaming in asia. Because of this, casinos in cambodia are growing and playing a bigger part in the economy.
Every year, tens of thousands of foreigners, mostly from china, vietnam, and thailand, visit the 150 casinos in cambodia. Cambodia hosts the most casinos in southeast asia, followed by myanmar, laos, and the philippines.
Thailand, laos, vietnam, and myanmar all have laws banning their citizens from gambling. This has allowed cambodia, which also has anti-gaming laws on the books, to become a regional hub for betting.
The casino market is worth a whopping $51 billion in asia. Casinos in cambodia are responsible for a large chunk of that sum.
Indeed, gaming establishments contribute hundreds of millions of dollars to the kingdom’s tax revenue every year. However, they have also been blamed for an array of social problems.
Casinos in cambodia saw a huge jump in 2018
Over the course of 2018, the government granted 52 gaming licences to casinos in cambodia. This brought the total up to 150.
This figure represents a 53% increase from 2017 when the kingdom only had 98 casinos. Increasing demand, especially from record numbers of chinese tourists, has been cited as a reason for the growth.
More than 1.6 million chinese tourists visited cambodia in 2018, accounting for 26% of all foreign arrivals to the kingdom.
Nearly 90 of the 150 casinos in cambodia are located in coastal sihanoukville. Poipet on the thai border, and bavet near vietnam each host more than 10 gaming venues.
With 1,658 rooms and suites, nagaworld in phnom penh is the largest casino in cambodia. Nagaworld is a subsidiary of nagacorp, which was given exclusive rights to operate the only casino within 200 km of phnom penh. That deal is valid until 2035.
Other notable casinos in cambodia include holiday palace casino & resort, poipet resort casino, star vegas casino (poipet), lucky ruby border casino, las vegas sun casino, le macau casino & hotel (bavet), fortuna hotel & casino, queenco hotel & casino, golden sand hotel & casino (sihanoukville), dara sakor seashore resort casino (koh kong), and thansur sokha hotel (kampot). Scroll down to view a map we made of all the prominent casinos in cambodia!
Only foreigners can gamble in cambodia casinos
Save for a few exceptions, gambling is illegal in cambodia under the 1996 law on the suppression of gambling. However, the ban only extends to cambodian citizens.
Locals are allowed to buy into five privately-operated national lotteries. Up until 2009, cambodians were allowed to use slot machines. This practice was then prohibited by the government. Gambling-related violence was cited as a cause.
Many inside cambodia have noted that enforcement of the gambling ban is somewhat spotty. Yet, by the letter of the law, violation of the ban can lead to a fine or even jail time.
Is cambodia the next macau?
Supporters of cambodia casinos often say that the increased tax revenues more than make up for any negative impacts. Some claim that gaming taxes were instrumental in the economic prosperity of both singapore and macau.
Or saroeun, preah sihanouk provincial hall spokesperson, told the local media that more casinos in cambodia will be good for the economy.
According to him, there will a bigger demand for products and services that vendors, businessmen, and others will just be happy to meet.
“it also means more money for the government’s coffers,” he stressed.
The annual licence fee for cambodia casino operators is pegged at $40,000. Casinos contribute more than $50 million annually in tax revenues.
Some figures say that gambling is indirectly responsible for contributing more than $2 billion to cambodia’s economy. The government has set a target of $56 million in revenues from casinos for 2018.
Proponents say that cambodia casinos bring more employment opportunities and increase the value of land for sale in cambodia.
Social ills connected with cambodia casinos
The mere mention of casinos often generates controversy. Countries such as pakistan, china, mexico, brazil, thailand, and ethiopia don’t have a single casino within their borders.
In countries where they are present, casinos are often heavily regulated.
Many medical bodies across the world have recognised the problem of compulsive gambling.
There have been reports of both foreigners and locals in the kingdom who have resorted to crime because of their addiction to gambling.
Additionally, some believe that certain casinos in cambodia are being used for money laundering. The latest basel anti-money laundering index ranked cambodia among the countries in the world most vulnerable to money laundering.
Chan sey, executive director of the affiliated network for social accountability (ANSA), said the increasing number of casinos in cambodia should not be a reason for optimism.
“the gambling business is not good for all of us. This is a worrying trend,” he declared.
Casinos, according to him, are not always good for a country and its people. He cited money laundering, human trafficking, and social problems as the most likely negative effects arising from a growing gambling industry.
What are sihanoukville casinos like?
Since most of cambodia's casinos are in sihanoukville, many are curious what it's like inside. They cater to mainly chinese patrons. So, are there chinese games? Do they play poker?
Here are some quick facts about sihanoukville casinos:
- You can find machines for anywhere from a few cents to $5 per game.
- Slot machines are quite popular and usually only accept US currency.
- Many are starting to accept chinese currency and most have currency exchanges onsite.
- Table games include baccarat, roulette, blackjack and poker.
- Most casinos have chinese-speaking staff and service chinese food.
- Many casinos offer free rooms for between $300 and $800 buy-ins.
List of sihanoukville casinos
Map of all major cambodia casinos
New cambodia casino laws on the horizon
In the last few years, cambodia has been trying to reform laws governing gambling and related activities.
Gaming companies from macau, the US and other places have been hesitant to invest in cambodia because of outdated laws and tax codes.
In 2014, legislation was proposed that would overhaul the current regulations. The proposal was meant to generate more state revenue while also attracting more visitors from around the globe. This would effectively double the tax rate up to 5%. However, the proposal has yet to be passed five years later.
The proposal would also create a gaming management committee (GMC). The GMC will be responsible for ensuring that casino operators follow standard internal financial controls to guard against money laundering and other illegal activities.
Proponents hope that the measure will pass in 2019.
If you learned something from this article you’ll probably find more helpful info in all of our guides. And if you want a full briefing on cambodia, download our investment guide 2019.
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Land-based casinos discovering cryptocurrency
Does bitcoin have a place in the physical casino?
Since being introduced back in 1997, online casinos have mostly been entertaining young people.This is because a land-based casino can provide a better gambling experience than its digital counterpart. There are a few experiences that can match the adrenaline thrill of playing at a real gaming table at a land based casino. The solid feeling of betting chip in a gambler’s hand is hard to beat.
The allure of offline gaming has begun to fade out, though. With the internet and mobile bandwidth improving as the years passed by, online casinos became better at delivering gaming into the
Convenience of a player’s home. All the while, land-based casinos are suffering as their revenues drop because of competition and a saturated market.
US-based offline casinos tried to strike back by tightening the regulations on online gambling. The problem is that online gambling sites are very hard to shut down, especially if they are located outside of the country that is trying to stop them. Close down one server location and the site will just transfer all of the needed software elsewhere.
The beginning of change
As the saying goes, “if you can’t beat them, join them.” this is why offline casinos are changing and adapting to the new marketplace. This can be seen in the redesign that many casinos have gone through. The popular image of a casino is an adult place filled with older people who are out to have some straight gambling fun. The need to open up and claim a bigger share of the gambling pie has changed the look of the modern casino.
For instance, the famous foxwood’s casino in new england went through an overhaul that changed the main gaming floor to something more inclusive for the millennial crowd. The gaming tables are not totally gone, but the place is now more of a general entertainment area. People can gamble, listen to music, mingle, and even get a tattoo. Now more of a combination resort and casino, visitors can enjoy themselves more with a variety of options like shopping and restaurants in addition to gambling.
In line with this evolution is the fact that land-based casinos are opening up to actually integrating online gaming. A 2015 study showed that if properly implemented, online gaming can be a good complement to a land-based casino’s operations. Having an online component can attract new customers and encourage players to come in and enjoy the offline experience provided by the brick-and-mortar casino. One of the bigger signs of this ongoing integration is the acceptance of bitcoin in land casinos. The cryptocurrency is quickly becoming a critical component of online gambling. Although many focus on the anonymity and quick transactions it provides, bitcoin forwards two factors that both online and offline casinos can treasure: security and flexibility.
Bitcoin gambling
There are many reasons why gambling with bitcoin and other crypto-currencies has become so popular. Playing with bitcoins resembles the feeling of playing with casino chips in a land-based casino.
There’s also a high level of privacy, due to bitcoin being pseudonymous, and payments are instant and irreversible. There are no transaction fees. Lost bets also carry no reimbursements or chargebacks, a big issue which was increasing transaction costs for the online gaming industry from the start. The games are
More transparent with the use of cryptographic methods, which ensure and make it possible for players to verify the fairness of every bet.
Gambling with bitcoins can also be much safer when it comes to the security of funds, since bitcoin gambling sites hold funds for a very short period of time, and when players decide to leave an online casino, they transfer their bitcoins directly to their online wallet by means of instant cash outs, with no fees involved.
As a digital currency backed by cryptography and an independent blockchain network, bitcoin provides casinos with trustworthy transactions. There is little chance of a casino operator being defrauded by a bogus check or counterfeit money. Additionally, people would not be able to claim fraudulent chargebacks or refunds using bitcoin since it creates a perfect digital paper trail on a public ledger. Bitcoin’s flexibility allows players to bet wildly varying amounts with ease.
These elements make bitcoin the ideal casino chip and quite a few land-based casinos with increased revenue and attendance are finding that to their advantage, following the steps of the reported merit hotel nicosia in 2014 and princess star network in 2015. As offline casinos continue their evolution, accepting bitcoin in land-based casinos will be one of their secret weapons in keeping themselves relevant. In 2014, news broke out that golden gate and D las vegas, two casino establishments along fremont st. In las vegas, had started to accept bitcoin as payment for hotel services, restaurants, and souvenirs or gifts.
Excluding the casino floor from their list of services to accept the digital currency, the two, however, reportedly were not going to keep the bitcoins but use a payment processor to convert the cryptos into dollars immediately they are received. This essentially means that all their financial record keeping remains in dollars.
Nevertheless, this was big news back then because many bitcoin enthusiasts saw it as one step towards having the crypto currency accepted on the gaming floor. In fact, other establishments in the strip followed suit, even installing bitcoin atms in their lobby.
Finding a place
But does bitcoin have a place in the physical casino? It is interesting to think of a time when you can walk into a casino in las vegas or anywhere else in the world armed only with a bitcoin wallet on your smartphone; no dollar bills, no credit cards. Bitcoin has had a long relationship with gambling in general. Of course, cryptocurrencies and gambling have been bedfellows for a long time now. In fact, close to 60% of all crypto coin transactions have something to do with bitcoin gambling.
Wagers in the US, where transmission of money for online gambling purposes is prohibited, have found a convenient mode of cash transfer in bitcoin. They can gamble on casinos operating from far corners of the earth while assured of their winnings.
It is safe to anticipate that bitcoin is going to hit the gaming floors of physical casinos in the not so far future. Perhaps, all it will take is one forward-looking casino entrepreneur making an application for a betting authority in one of the cities around the globe.
The technology to implement this kind of gambling is available, going by all the innovations that have been made around cryptocoins. And, of course, there is no short supply of people who will find it both convenient and highly social—the best of two worlds.
How about gambling in physical and online casinos having a single playing ground?
Bitcoin in physical casinos could lead to other possibilities
Bringing bitcoin to a brick-and-mortar casino may also open doors to having gamblers behind personal computers playing with wagers in las vegas casinos. This is a little far-fetched but, nonetheless, possible with a little tweak to regulation and infrastructure.
Bitcoin stands with several benefits that can be transferred to physical casinos.
First, it makes gambling not only faster but also more secure. It also removes the bulkiness that is experienced when using cash and credit cards. Moreover, the use of digital currency in brick-and-mortar casinos a new frontier of hardware and software innovation will be opened. And this, on the other hand, will open new line of businesses.
Indeed, bitcoin gambling has a place in the physical casino. And now UK-based startup cryptochip has made that leap forward, offering cryptochipping exchange service (converting cryptocurrency to land based casino chips). The company is planning an ICO (initial coin offering) in the next few month.
Show me the money
As dozens of casinos set up shop in cambodia each year, they stand to make millions annually – but the kingdom has yet to rake in its fair share of the industry’s rising profits
WHY WE WROTE THIS: because foreign investment should always have a positive impact on local people’s lives
June 3, 2019
B y R obin S piess • 4 J une 2019
A s d oz ens o f casinos s e t up shop in cambodi a each yea r , th e y stand to ma k e millions annual ly – but the kingdom has y e t to r a k e in its f ai r sha r e o f the industr y ’ s rising p r o fits
A chinese man in his mid-twenties sits slouched behind a wobbly-legged table at the casino entrance, playing a game on his smartphone.
The casino isn’t large, but what it lacks in size it makes up for in strangled opulence. The beige stucco facade is thick with gold filigree, mirrored windows and a glowing sign, written in towering chinese characters, announcing: “the god of wealth company international”.
The makeshift casino is not listed on google maps; it is meant to be found only by those who know where to look, down a dark road in the heart of sihanoukville on the cambodian coast. A cursory google search reveals that the casino has developed quite a reputation despite its lack of official listing: “you don’t want to mess up here”, one writer warns on an open forum. “if you’re good, good things will come to you. If not…”. His epithet for the casino, the “god of wrath”, finishes his sentence for him.
The guard jolts out of his plastic chair when he sees someone out of place – a westerner – preparing to walk past him onto the casino floor. He calls out over his shoulder in mandarin, wary eyes following the newcomer as he trails close behind.
The interior is drenched in plastic chandeliers, imitation antique chairs and faux-marble columns. Casino dealers and cleaning crew alike look up, puzzled. One gambler pauses his game of baccarat to open a translator app on his phone, his rapid mandarin rewritten as rough english held in his hand: “they want you say why you here”.
After a tense few minutes, the young guard escorts the newcomer back to the front door. He makes it clear that there is no place for the western visitor to play on the casino floor – strangely vacant though it may be.
It is a scene that plays out often in cambodia’s seaside city of sihanoukville, where dozens of casinos – many of which are chinese owned and operated, and which cater primarily to a chinese audience – have grown like weeds from the sandy soil, displacing hundreds of local businesses and residences.
In 2015, ros phirun, the spokesman for the gaming and casino department at the ministry of economy and finance (MEF), was quoted as saying that the casino industry in sihanoukville was “nearly nonexistent”. Four years on, it’s hard to imagine a version of the city devoid of the dozens of gambling halls that line the city centre’s roads.
By the end of last year, the number of licensed casinos across the entire kingdom had risen from 63 in 2015 to a staggering 138. Of that total, 88 licensed casinos are based in preah sihanouk province, and 38 are located in the capital of sihanoukville itself.
In addition to these, dozens of casinos blatantly operate outside of the law, seemingly unwilling – and unpressed – to pay the $40,000 annual casino licensing fees. A map of the province, well-circulated on open forums and various local gambling websites, is dotted with the locations of 100 casinos along the preah sihanouk provincial coast, with roughly 80 based in the heart of the city. Gone are the days of gambling halls hidden in the basements of hotels and restaurants; now illegal casinos operate from multi-storey buildings and raise gilded signs – as the god of wealth casino has done – seemingly without fear of legal action.
But the rise of the shadow casino is not the only issue cambodia faces; even the kingdom’s casinos that meet every legal requirement set for them have proven problematic.
A common complaint that has risen from the displaced people of sihanoukville is that cambodia’s casinos are not benefitting the local communities in which they are based. While both licensed and unlicensed casinos attract foreign visitors, it has been argued that the tourists that casinos attract rarely spend their money at locally owned businesses. And no matter where you are in the world, where casinos go, rising crime rates follow.
The main way that casinos can positively impact cambodia, then, is through their direct monetary contribution to the kingdom – preferably paid in hefty taxes.
But despite booming business, cambodia’s casinos aren’t paying their fair share there either. Although the total number of licensed casinos in the country has risen by nearly 120% in four years, the amount of money generated in taxes has gone up by barely a third.
In 2018, a total of $46 million was paid in taxes to the MEF – $12.4 million of which was paid by publicly listed casinos nagaworld and donaco, which together raked in just under $1.5 billion in gross gaming revenue (GGR) over the course of the year. The rest of cambodia’s casinos chipped in to pay the remaining $33.6 million to the MEF, each paying on average just about $260,000 in taxes.
In contrast, the gambling city of macau – home to 41 casinos which, in 2018, raked in $37.4 billion in GGR – saw the benefit of $13.21 billion in taxes from its gaming industry last year, taxing its casinos at an effective tax rate of 39%. It is impossible to estimate how much cambodia would make if it were to tax its casinos’ GGR at the same rate – there is currently no estimate, official or unofficial, of the total gaming revenue earned at the 138 legitimate casinos scattered across the country.
Four years after dismissing the sihanoukville gambling scene as “nonexistent”, phirun tried to explain how the MEF has responded to the rapid rise in casino activity across the country, but struggled to define how the ministry has thus far addressed taxing these new businesses.
“the current tax regime… can’t be calculated,” phirun told southeast asia globe in a recent interview. “it’s just based on the annual budget law and some other factors [such as location, casino size and number of players]… so we assume based on lump sum method.”
It is an answer that phirun has given for years: though casinos are allegedly paying monthly installments to the government, the MEF cannot or will not define exactly how it determines the rate at which each licensed casino is taxed. There is no defined “lump sum method”. And there is no transparency; unless the casinos themselves choose to report the amount they have paid in taxes, as the handful of publicly listed casinos in the country are required to do, the information is not publicly available.
The hand cambodia has been dealt
The problem isn’t necessarily that cambodia’s licensed casinos are acting illegally or working some loophole that allows them to pay minimal tax. The problem is that cambodia doesn’t have a universal tax law for its casino and gaming sector.
“we don’t have a tax law on gaming yet,” phirun explained. “but I expect the [new gaming] law will come into effect in 2020.”
The expected law, he added, will tax casinos on the basis of their overall GGR, as is common practice. Despite alleging that the law will pass within the year, however, phirun said that particulars of the new law remain to be determined. He did not reveal how much of a percentage of total GGR casinos would be required to pay – though prior drafts of the law had reportedly set the tax rate as low as 4% to 5%, which would make cambodia’s casinos among the least taxed in the world.
“gambling on change,” reads the headline of a 2014 article in a local newspaper, announcing a gaming law expected to pass within the year. “draft gaming law a step closer,” announces another outlet in 2016. “draft gaming law to be approved”, yet another headline declares in 2017.
Two years ago, phirun predicted that the gaming law would pass within the year. “there will not be delays [from now on]… for the approval of the draft law,” he told local news outlet khmer times. Now five years since its initial drafting, the tax law remains unpassed, and the MEF’s assurances of its imminent arrival have lost their potency.
According to son chhay, a former lawmaker and member of the now-dissolved opposition cambodia national rescue party (CNRP), the long-awaited tax law is slow in passing because “powerful people” in the government have a vested interest in the unregulated gaming industry. Whether the officials themselves have invested in local casinos or whether they simply enjoy the hefty bribes given them to keep the sector unregulated, he believes that graft lies at the heart of the continual delays to the tax law’s passing.
“we have asked the government to come up with the law for more than ten years already,” chhay told southeast asia globe. “but the government keeps delaying, from one year to another. I think that is related to corruption.”
Chhay was vocal about the need for a gaming tax law during his long tenure as an official, calling for casino regulation as early as 2002 – at which time he estimated that the then 15 casinos operating in the kingdom would, if taxed properly, contribute up to $50 million in taxes annually.
Chhay held office through 2017, until he was forced out in the leadup to the contentious 2018 national election that saw the CNRP opposition party dissolved and chhay – along with 117 other senior CNRP members – banned from political activity. Even during his years spent in office, chhay said that despite repeated attempts, he never managed to see a draft of the gaming tax law. He still does not know what it covers.
“one of the reasons the government has delayed passing the law is that some casinos are affiliated with government officials’ personal businesses,” said chhay in a recent interview. “among them, there is nagaworld.”
Nagacorp exists in its own legal sphere: with a 41-year monopoly on casino operations within 200 kilometres of the phnom penh city centre, the corporation will remain the sole casino operator in the capital until 2035, and has signed a 70-year license to continue operations in the city through 2065. In addition, nagacorp has negotiated a tax structure for its casinos that – surprisingly – is in no way based on overall revenue generated, though the exact terms of the agreement have never been made clear.
“there are a lot of criteria in the [tax] agreement [with nagaworld],” phirun told local media in 2017, referring to the corporation’s golden casino complex that towers over the capital. “the agreement is written in a very thick book, so it is not easy to explain.”
The agreement, thick as it may be, has never been made public. And when the new gaming law goes into effect, nagaworld will remain impervious to it, according to the MEF – the current agreement, which last year allowed nagaworld to pay as little as a 0.63% effective tax rate on its GGR, will take precedence.
Even so, chhay said he is hopeful that, when MEF officials say that the new gaming law will pass in 2020, they may be telling the truth. As more and more casinos set up shop in the kingdom, the potential for significant profit has rapidly outpaced officials’ personal interests.
“I think that the reason for the government [trying to pass the new gaming law] now is that there are a lot of chinese investments in sihanoukville and along the border towns,” chhay said. “the government sees that there are major foreign-owned casinos here, and they need to profit from this, so they are pressured to make this law.”
Chhay himself has made no secret of his distaste for casinos and gambling, which he believes are linked to a rise in drug and human trafficking. But if they’re going to exist in the country, he said, they can at least pay a fair amount in taxes.
“we do not know yet about how effectively the new law will be enforced,” he added, “but even so, this regulation should be promoted widely.”
A cambodian businessman slams his fist on the dark wood surface of his office coffee table, emphasising each word with an angry rap of his knuckles.
“it is not only about making new laws… the government does not know how to enforce the laws it already has,” he vented, speaking under the veil of anonymity to avoid potential backlash from government officials. “frankly speaking, it is fine to accept business and investment from anyone, but when will the government walk the line and follow its own laws?”
“you think those casinos are hiring the local people? They’re not. And even more than that… all of these casinos are going online,” he added, fist again meeting table top. “and that is very worrying, because the new tax law will be impossible to enforce when the casinos are all online.”
“how exactly are we going to charge them on this digital revenue? And when we find we can’t, how will the government see the benefits of these many, many casinos, even after the law [goes into effect]?”
It is a point that few are willing to discuss: the casino industry may well be outpacing any potential regulatory legislation cambodia is prepared to pass, adopting online gambling services that officials don’t yet have the tools to monitor.
Most online bets are placed in the form of cryptocurrency, which the kingdom has yet to either officially recognise or outlaw, and which remains unregulated in the country. Cryptocurrency exchanges can be difficult to trace, and to do so would likely require cambodia’s auditors to partner with a private crypto-tracking firm – a move that would be both expensive and seemingly at odds with the government’s official stance on the digital coin.
In sihanoukville, only a few dozen players actually sit at the baccarat and blackjack tables that stretch across the cavernous room of the god of wealth casino. As live hands are dealt, however, the dealers’ eyes dart between the players before them and the computer monitors set up to the right of each gaming station, where more bets are being placed.
Virtual gamers watch from cameras, playing as ghosts at each table, their presence made known only by the screens that show a running record of their wins and losses.
Down the street, at the la vogue boutique hotel and casino, the door greeter is all too proud to tell a potential gambler that two of the casino’s three floors are dedicated to online gaming. While a handful of players engage in a round of baccarat near the entryway to the casino, the majority of games on the floors above and below their table are able to be accessed virtually by players from around the world.
It’s an odd set-up, and one that is somewhat unique to the kingdom, where gambling is outlawed for locals, but where foreign casinos are allowed to set up land-based operations that cater to foreign players. Online gambling in the country is technically legal – but only in land-based casinos, which pay a $10,000 licensing fee for the privilege.
Or rather, that was the plan. In reality, many casinos operate online gaming without purchasing any form of licence to do it. The MEF has reported that a total of 63 online gaming licenses have been issued, but according to online forums, the digital gaming fad has been embraced in some form or fashion by a vast majority of cambodia’s casinos.
Some act in outright violation of the law; others choose to take advantage of the loose regulations to hire a licensed online casino operator who has the legal right to set up online gaming activity at any number of casinos. These licensed operators often provide the gaming website access, the hardware, and the training for established land casinos to begin incorporating online services.
According to a statement released in 2017 on gaming website calvin ayre, cambodia’s loose regulation for online gaming licenses provides companies with immense opportunity for profit.
“not only are online casinos fair game, but this online gaming license can be extended to other people wishing to use the casino license for their own platforms,” the statement reads. “operators… will work under [the] umbrella [of a licensed online gaming entity], using their facilities and experience.”
“it opens cambodia to the whole world,” the statement continues, “allowing everyone to get started in igaming – even those who are facing legal issues in their country.”
Asia live tech, which runs the lucky ruby casino and resort in sihanoukville, is just such a licensed operator that has made a business out of providing online gaming services to established casinos in the kingdom, with 30 casino partners listed on its website.
“take advantage of our online gaming license in cambodia!” it exults on its website, promising potential operators of one of its programmes that “91% of all operator’s revenue from your online casino or igaming website will be yours to keep”.
That doesn’t leave much wiggle room for a revenue tax, and the fear is that the digital realm in which asia live tech operates is one that is not going to be easily audited. While the land-based casinos see the financial benefit of the online gaming they offer, their online operations – which likely make up a majority of many casinos’ revenues, and which are typically paid for in unregulated cryptocurrency – are not as easy to validate, and require technical expertise to verify.
In a perfect world, every casino would honestly report its online gaming revenue to the government, giving officials the chance to tax it – but the world is far from perfect.
Phirun remains hopeful that the gaming tax law will see the reputation of cambodia’s casinos change, encouraging more publicly listed companies to set up their businesses in the kingdom.
There is reason to believe that, in some small way, it could. Representatives from donaco, which operates the second largest casino chain in cambodia, have stated before that they welcome the new law; even as they expect to have to pay more in taxes than they do currently, they say they look forward to operating in a more regulated sector and on a fairer playing field.
Of course, a fresh start can only be built through effective enforcement – if not of casinos’ online gaming, at least of their offline operations.
Chuon narin, the preah sihanouk provincial police chief, was uninterested in discussing the possibility that the new tax law may prove difficult to enforce.
“as law enforcers, we prefer to run things by the law,” he said in a recent phone interview. “whether it impacts the business or not, law is still law.”
He did not comment on the rise of unlicensed casinos in sihanoukville, which police have yet to effectively shut down, nor did he provide comment on how he planned to implement the new law.
But the police chief was surprisingly candid about his doubts that the new tax law would be able to make a difference.
“[casino operators] are not intimidated by what the law requires them to do,” narin said. “I do not think [the law] is going to change anything.”
But if ever cambodia needed that change, it is now. Even if set at a low effective rate, the law could see cambodia’s coffers swell at a time when the potential withdrawal of tariff-free trading agreements with the EU and the US could cost the kingdom $676 million a year in trade.
The MEF has set its sights low for the new law, expecting only to double its current casino revenue upon its passing, according to phirun. But the law would nonetheless be a step in the right direction, and could even help fund more effective law enforcement in popular gaming cities, leading in time to the licensing or closure of the country’s many shadow casinos.
But the law, when it comes, may well be too little, too late for the locals living in cambodia’s new boom towns. Tensions in sihanoukville are high, and a distaste for casinos and the gambling visitors they attract – the majority of which are chinese – is hardening into hatred.
On a street crowded with chinese tourists, local tuk tuk driver nap gestures at a new chinese restaurant being built alongside a string of newly made chinese restaurants.
“now chinese, all chinese, all coming for the many casinos,” he said, shaking his head.
“law, no law. They don’t care, they keep their money,” he said. “we just want them to leave.”
so, let's see, what we have: nagacorp reports gains in cambodia as it expands to other areas the shutdown caused by the pandemic throughout the second quarter of the year, did not prevent the nagacorp, cambodia’s casino at cambodia cryptocurrency land based casino
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