Posted on: July 14, 2022, 07:24h.
Last updated on: July 14, 2022, 03:46h.
Cambodia’s casino industry has had more time than others to rebound following the COVID-19 pandemic. However, based on the latest data from the government, the legal casino ecosystem is failing to gain traction.
Cambodia was one of the first countries in the region to reopen its borders when it seemed COVID-19 was no longer a threat. However, it is still experiencing a major shortage of tourists.
Currently, only 20 casinos are operational. This is out of more than 200 that held a license as of 2021. As a result, Cambodia first closed its land-based casinos in March 2020.
The Cambodian government saw a drop in revenue from commercial gambling during the first half of 2022. The results are far below what they had expected, according to The Phnom Penh Post.
Casinos Sluggish to Rebound
Per the government’s budget requirements, the casino industry is responsible each year for KHR174.2 billion (US$43.55 million) of the country’s revenue. This is per the Law on the Management of Integrated Resorts and Commercial Gaming (MIRCG), which entered into force in November 2020.
However, in the first six months of 2022, the 20 casinos only contributed a fraction of the amount. Of the 8% of the gambling segment turned over to the government, most came through lotteries and raffles.
It isn’t clear which casinos are open. However, around 50% of the country’s casinos are in and around the city of Sihanoukville. Recognized globally as a hub for criminal activity, it isn’t a place many tourists would want to visit.
NagaWorld in Phnom Penh isn’t attracting a lot of traffic, either. Workers have been on strike since the beginning of the year, routinely leading to complaints of human rights violations on the part of the government. However, the property expects to improve and wants to add a gambling area for mass-market premium players later this year.
License Renewals on the Way
The MIRCG also addressed the need for casino operators to request annual renewals of their licenses. Ros Phirun, the deputy director-general of the Finance Ministry’s Financial Industry Department, has indicated that many haven’t. He pointed out that operators in border areas such as Poipet or Bavet had not yet renewed their licenses.
Phirun told The Phnom Penh Post that while local tourists have been taking more trips than ever, attracting international tourism is challenging. This is especially true in areas bordering Thailand and Vietnam, which only recently opened.
Slow revenue collection has been the result of commercial gambling operations having just resumed. Furthermore, the lack of revenue made it virtually impossible for some operators to meet the government’s capital investment requirements or pay for the license renewal.
Phirun stated that 143 casinos have applied for new licenses, and 13 have received approval. One of these was Donaco International’s Star Vegas in Poipet, which resumed operations as of June 17.
From 2019 to 2020, casino tax revenue lost 53%. The MIRCG arrived in November 2020 as a mechanism to help Cambodia recover, in part, some of the losses. However, because of a lack of casino gambling last year — and considering the shortfall from the first half of this year — it appears that recovery is still a long way off.