I have lived in Sihanoukville three separate times during my stay in Cambodia. At first it was a quiet, little beach town. I remember riding my moto up and down the coast as often as I could, eating at some really nice restaurants and drinking the night away with my friends. The only problem then was the poker as $1-$2 games ran infrequently and the main game in town was only $1-$1. That all changed my second time around a couple of years ago when the Chinese started to invest in the city and would arrive both as tourists and developers. All of a sudden games were running as high as nosebleed games anywhere in the world. Poker rooms were opening nearly as fast as casinos were being built. And yet not a single one of those games is still around today, either having changed ownership multiple times or many being closed altogether. So what exactly is going on down there?
POKER ROOMS ARE NOT RUN BY THE CASINO
I would return to Sihanoukville two more times, my first return being two years ago to manage the poker room at the Bao Mai Casino. And when I say this I do not mean that the casino hired me as the General Manager, but rather that my friend rented the space from the casino and then hired me and the rest of the staff. The casino really had nothing to do with us at all other than the fact that we were tenants. In fact we were one of several as other groups would rent out tables to run games like baccarat. They viewed us as any other casino game and expected us to generate the same kind of revenue. This is very much reflected in the amounts that the casinos would charge in rent, which were often exorbitant. I had a friend who rented out what was essentially a two table poker room in a hotel that did not even have a casino for $15,000 per month. We've all heard the saying regarding passing savings onto the customer. In this case it was quite the opposite, which goes a long way toward explaining why rake is so high in Sihanoukville.
At the time of our opening there were twelve other poker rooms operating in the city. As competition was fierce rooms had to do whatever they could to attract customers. So nearly every game in town was ripe with promotions from game starting bonuses, bad beat jackpots and rakeback to entice players. Then there were the private deals in which select players were offered a certain higher percentage of each night's rake. Having to pay out so many players combined with the high rent, this was hardly a sustainable model. I know this because this is what happened in our poker room. In order to compete we had free food, game starter bonuses and a $10,000 freeroll. In the end it was just too much to keep up with and we closed after six months. Although the reasons might have slightly varied, other rooms suffered from the same fate. I previously mentioned that there were twelve other games in town when we opened. By the time of our closing there were only three.
RECS GOT CRUSHED
The main attraction of these games were that they were populated by Chinese players who for the most part were recreational players. They were used to playing casino games and losing so they didn't really sit down at the poker tables with a high expectation of winning. They played for the thrill of the few hands that they won and for bragging rights over the regs who constantly bum hunted them. But over time those regs had a huge advantage and would eventually take large sums of money from the Chinese players. But a poker economy can usually withstand this, but not in Sihanoukville. The Chinese players were in the middle of a three man gangbang in which they were not only getting it from winning regs, but also the high rake and lest we forget the insurance. For those unfamiliar with insurance, it is a very popular aspect of poker in Asian countries in which players ahead in a heads up all in situation can insure their hand against the number of outs the other player has. To give a practical example one player has pocket aces and goes all in on a flop of 9d 8d 2s vs a player who calls holding KdQd. With nine outs the house will offer the player with aces 3:1 on taking insurance. The player ends up insuring his hand for $100 and if his opponent catches a diamond he will lose the pot but win $300 from the insurance. But that is only for the turn card. If the aces are still best, he's offered insurance once again for the river card. It is easy to see how expensive this can get over time and with the Chinese players taking insurance most of the time, they not only stand no chance to be a winning player but are actually losing on a more massive scale than originally thought. The poker room ends up making a ton of money on this and it can easily be argued that this is the main reason they run poker games at all. Like the casino they treat poker like any other casino game and as such they have no real concern over whether or not a game is unbeatable for a significant portion of their clientele
NO REAL FREE AGENTS
As I stated earlier poker rooms in Sihanoukville are not run by the casinos themselves, but rather by outside groups who merely rent space. These groups are usually Chinese and their members populate their own tables to start the game each day. The boss of the group will usually play and fill up the remaining seats with his "group", usually his friends or those that work for him. They will start a Wechat group, add hundreds of Chinese and invite them to the game each day. But the fact is that potential Chinese customers for a poker game are few and far in between. While they may be attracted by other casino games, the Chinese do not necessarily come to a casino specifically looking for poker. In the end these groups are trying to attract potential players who are part of another group who do the exact same thing that they do, just in another casino. And if members of the group account for most of the players on the table, they suffer from the same fate as any other player being subject to rake, insurance and bum hunting regs. In this way the game can never last too long as with whatever revenue they generate, they have to both pay out players receiving deals and also account for their own losses. One could reason that the room can compensate for this by attracting foreign expats. But as previously mentioned such players will almost always require a deal to be monogamous to one room and the fact is there are fewer expats in the city than there once was. For reasons that will be explained below, most expats have already left the city and players that used to come down from Phnom Penh are coming less frequently.
A ROUGH PLACE TO LIVE
Sihanoukville was a sleepy beach town, very inexpensive and filled with many foreign expats. It was also a frequent holiday spot for many in Phnom Penh and those looking for a cheap coastal holiday. That all changed about three years ago once the Chinese started investing in the city. As more Chinese populated the city, both as tourists and as permanent residents, new developments went up where nothing was before and older buildings were torn down in favor of newer projects. Not so slowly but surely, everything in the city became more expensive and foreign businesses were quickly replaced with Chinese ones. With these new projects, roads were torn apart, traffic was unbearable with the increase in population and the proliferation of construction trucks and beaches were polluted with all the runoff from new developments. All this is to say that Sihanoukville became a very difficult place to live or even stay for an extended amount of time. Hotels that were once $200 per month could easily cost almost the same amount per night. And apartments were difficult to come by as new residences could not be built fast enough. During my last stay in the city, small studio apartments were going for $600 to $700 per month. The changes in the city did not only affect the expats, but created a city that the Chinese themselves did not like. One poker room operator once confided in me that he considered Sihanoukville to be "hell on earth" and that many of his compatriots felt the same. So many foreigners who once populated the poker games fled to other cities such as Phnom Penh or Kampot. And those that once came down from the capital city became far an few in between. All of this serves to offer a very inhospitable poker scene.
Currently there are six casinos in Sihanoukville that offer poker, with a smattering of a few more private games that are not open to the public. If the past is any indication, none of these rooms will be around in a year's time, or at the very least will have changed ownership multiple times. Among the current games there is nothing to suggest in their operational practices that suggest that this trend will change any time soon. In cities like Las Vegas, poker rooms are run as a compliment to everything else that is offered and thus does not need to generate the sort of revenue that room operators seek in Sihanoukville. And Vegas is an affordable city for most looking for a holiday and offer more than just gambling with most casinos offering buffets, fine dining experiences and entertainment. At this point in time casinos in Sihanoukville are nothing more than pits designed to suck out as much money as possible from its patrons in the shortest amount of time. Until casino operators in the city start taking a longer term view and start offering real value to their clientele, it is doubtful that the current approach to running a poker room in the city will change any time soon.
Life in the Third World
Just a collection of random and not so random thoughts from my daily life here in Cambodia.