From sleepy beach town to booming gambling mecca to bust, the transformation in Sihanoukville seems to be complete. With the governmental decree that all online gambling operations cease by January 1st in the Kingdom of Wonder, Sihanoukville is now a complete ghost town. So the question remains, was happens now? The expats that once inhabited this peaceful town are now all nearly gone, the Cambodian locals have all been priced out of their own city and now the Chinese that caused all this in the first place are gone as well. What now remains is a broken town with the remaining few left to pick up the pieces in the hopes of a better future that may never come.
First a little background is required. The big misnomer about Sihanoukville, and any casino town in Cambodia really, is that most of the gambling revenue is generated on the casino floor. This could not be further from the truth as what is made on table games is a mere drop in the bucket compared to the real money maker for these casinos, online gambling. When entering a casino in Sihanoukville one will notice that much of the gambling floor is dedicated to rows and rows of empty tables with absolutely no players. The table is only populated by a single dealer, always a young and pretty Khmer girl, with a video camera pointed at her. What is going on here is that she is dealing hands of baccarat that is being broadcast back in China where gamblers can get their fix in a land where such activities are illegal. Certain studies have shown that nearly 85% of the casinos revenue is generated from these virtual games. So when the government decreed all such activity illegal starting in 2020, it was no big surprise that the Chinese that once flooded into Sihanoukville left in droves.
So why the ban? To answer this question I think it is really important to note that the Chinese get a really bad rap in all of this. That's a word that gets thrown around a lot, namely "Chinese" and it is always in a negative connotation. Let us really think about what has happened in Sihanoukville over the past few years. You take a sleepy little town with just under 100,000 inhabitants and then suddenly introduce an additional 300,000 people from a foreign land. And of course these people came because gambling licenses, both live and online, were issued out as easily as the Sunday paper. With no real regulatory body nor a commission to overlook the casinos in any meaningful way, the newly licensed entities then set up operations to serve a clientele that lived in a land where the service being provided was completely illegal. And as there were no rules governing how these licenses were used they were then leased out, sub-leased and sub-sub-leased to groups who had no business running any sort of operation let alone one that involved gambling. Given all this, who did we think was going to show up to take advantage exactly? Every society has both members that impact society in a positive and negative way. I think it is safe to say that Sihanoukville got much of the latter when it came to this recent boom.
What is left now in the city are a plethora of Chinese businesses with no clientele to service. I read a story today that stated 56 of 75 licensed casinos in Sihanoukville have already closed their doors. With massive unemployment and no other industry ready to replace the Chinese ones that are quickly dying, it is near impossible to predict what might happen next. It is possible that both expats and locals may return and reopen businesses that once were successful. But this scenario seems unlikely given that most would probably fear that the same thing would just happen all over again. Let's not forget that this online ban was at the behest of the Chinese government and they have pledged billions of dollars in exchange for Cambodia's cooperation. Thus the likelihood that the Chinese are done in the Kingdom of Wonder is unlikely, especially since so many of them already inhabit other cities such as Phnom Penh. But we here in the capital city have experienced very little of what Sihanoukville has seen in terms of crime with the arrival of the Chinese. That can be attributed to the fact that the Chinese in Phnom Penh are not here for any reasons associated with gambling and that their interests are more mainstream and legitimate. I do believe that once Sihanoukville is built back up they should experience much of the same in terms of their relations with the Chinese.
So what in the meantime? I believe that the next 1-2 years is very crucial for the future of both Sihanoukville and the country at large. It is very possible that if the correct steps are not taken that the exact same thing or something close to it can happen all over again. So I propose something radical and look to one of our neighboring countries in Southeast Asia for a possible solution. I have always wanted to travel to the island of Boracay in the Philippines but when planning a trip in 2018 was dismayed to learn that the entire island was closed to tourists. This was done after President Duerte had declared the island a "cesspool" in light of all the pollution that had desecrated the region. I find many parallels with what has happened in Sihanoukville and so perhaps the best solution is to just close the city for one year. This would allow the city to fix its horrendous sewage system, clean up much of the pollution that has been caused by the many building projects and clean up the beaches that were once a tourist destination. Many of the projects in the city have already been stopped anyway and the money that the Chinese government has pledged to Cambodia can be used towards the many necessary fixes and to subsidize the people and businesses that will remain during such a closure. This would also give the government time to set up a proper governing body or commission to overlook activities such as gambling so that the same mistakes do not occur again.
There are those that say that you can never go home again. I think this is the case in Sihanoukville as those hoping for a return for what the city was a few years back will probably never come back. There is just simply too much money invested already and more to come for that to ever happen. What the town will eventually become depends heavily on what decisions are made and what occurs in the next 1-2 years. This whole thing started with an under-reaction, letting just about anyone come in to set up businesses that were ripe for ill repute if not done correctly. And now we are at the result of a complete over reaction in which nearly everyone has departed and left in the remains a broken city. While it may never be what it once was, Sihanoukville can be a great city in the future that is welcoming to all groups. Here is to hoping that the right steps are taken in this not so distant future in order to ensure a happier ending than the one we have now.
Life in the Third World
Just a collection of random and not so random thoughts from my daily life here in Cambodia.