Recently the Cambodian Prime Minister issued a new directive that will effectively ban all online gambling here in the Kingdom of Wonder. What this law is aimed at is of course all of the Chinese that have come into the country to setup online operations in the last few years. Cambodia is one of two countries that will issue online gambling licenses to Chinese entities at the moment, the Philippines being the other. For those of you who have never been inside a casino in a city like Sihanoukville, online operators will often rent casino floor space and setup many tables to deal baccarat. But these games do not deal to any live players. Instead, attractive girls stand in front of a video camera that sends a signal back to players in China who are not allowed to gamble on the mainland due to legislative restrictions. The Prime Minister has stated that those currently operating with licenses can continue until their expiration, but once that date is reached no further licenses will be issued.
On the surface, this law makes absolutely no sense. There is a huge misnomer when it comes to gambling and casinos here in Cambodia, especially in cities outside of Phnom Penh. Examining a city like Sihanoukville for example, it might be easy to assume that casinos are being razed due to the influx of Chinese tourists and that most, if not all, of the revenue is being generated by activities on the gambling floor. But those who know the industry well in this region are already aware that the money made in the pit is but a fraction of what is generated from online activities in which Chinese gamblers are able to send and lose money remotely using a variety of online payment methods. As I stated above, there are groups that rent out huge chunks of space on the casino floor to have young and attractive women deal cards in front of a live feed going back to the mainland. In fact, groups will often rent out hotel rooms inside of casinos for months at a time and simply run the games out of each room, setting up tables inside. If this activity is stopped due to legislative changes, much of the revenue generated from gambling in Cambodia will simply dry up. Nagaworld in Phnom Penh will surely survive as they do not seem to rely on the generation of this type of revenue, but casinos in cities such as Sihanoukville, Hatien, and Bavet will lose access to what really makes them money. We can debate endlessly as to whether the casino and gambling developments in these cities were actually helping local Cambodians in terms of their economic growth, but it goes without saying that they were a big benefit for the government and generating for them much revenue. So can it really be that they would put an end to all these activities and dry up not only what is a huge revenue stream, but big development projects that are the side effects of such an industry?
The simplest answer may lie in the fact that the government has an interest in the Nagaworld Casino and may just be protecting their turf. But if such were the case it would make no sense that they would issue the initial licenses in the first place. Therefore, it could be that they are rethinking their initial policy of granting an online gambling license to nearly everyone who applied for one. I know people with such licenses in this country and as long as one is willing to pay, it was ridiculously easy to obtain. In this manner their argument that this new law is being passed in order to maintain civil order is reasonable. When the obtainment of such a license is that easy it cannot be guaranteed that every group applying for it is a reputable one. in this manner I have already heard of many clients back in China being ripped off by operators here in Cambodia. As poker players most of us know all too well of how easy it is to put money into poker sites but how difficult it can be to get out. Now just imagine never getting the money. Thus this new law might be paving the way for one large and reputable group to come in and basically monopolize the online gambling industry. No more licenses will be issued because one group will oversee everything.
If this is true it can mean sweeping changes for a city like Sihanoukville. With no more licenses being issued, the current casinos will no longer be able to sustain themselves due to losing a huge part of their revenue. They will not be able to maintain a large staff and will no longer have need to migrate over large portions of their groups to run their online operations. This in turn will affect the number of building projects as the number of people to occupy them will severely decrease. But if one group does come in to take the place of many, such a change can be an initial positive for such a city. It can mean that all projects will be streamlined to one standard and that such will make it easier for the government to control all manners of development as they will now have to keep tabs on only one group instead of several. New policies can be enacted to limit the amount of waste from these projects, or at the very least adopt one standard that is safe in how to dispose of such products. And all this can be done while maintaining the huge numbers of Chinese coming into the country as there are groups back in the mainland large enough to replace many.
But at the same time such a monopoly may be harmful in that it will completely wipe out any sense of competition. If one large group comes in to take the place of many and ends up not only running all online gambling, but ultimately come to own every casino and construction project in town there may be a price to pay. Sure things may be streamlined, made more convenient and ultimately safer but such a change would leave one group to set the price on basically everything from the cost of hotel rooms, the rake you pay in a poker room and ultimately everything around town. But then again, the way that things are currently running have already led to an unreasonable increase in price for just about everything so perhaps the situation will be better under one group. I am obviously speculating on many things here and what I have written in this post is purely my opinion. But perhaps there is a hint of wishfulness as well as I have lived in Sihanoukville several times throughout the years and I long for things there to return to some form of normalcy.
Life in the Third World
Just a collection of random and not so random thoughts from my daily life here in Cambodia.