The rapid growth of Cambodian casinos’ revenue could level out over the next few years in the face of market saturation and international competition, some investors and government officials are warning despite a dearth of reliable statistics.
Casinos provided $12 million in tax revenue in 2005, $16 million in 2006, $18 million in 2007 and are expected to provide $20 million this year, according to the Finance Ministry, which currently has a traveling delegation investigating the scale of casino revenues.
But without accurate numbers on how much gamblers are spending, the government instead calculates tax bills based on how many card tables and slot machines each establishment has, according to Finance Ministry secretary of state Chea Peng Chheang.
“We have better control now, so that’s why we can collect more taxes from casino operators,” he said. “We tax them based on the size and amount of equipment. If they set up more gambling equipment, they pay more taxes.”
Five new casinos opened their doors in 2007, bringing the total to 29, though the ministry reported no scheduled plans for new casino openings this year. The largest concentrations are along national borders, with 15 on the Thai frontier and 10 on the Vietnamese, as well as three in Sihanoukville and Naga Casino in Phnom Penh.
And even more casinos are still coming.
Earlier this month Israel-based casino and hotel developer Queenco Leisure International announced future plans for a casino resort in Sihanoukville.
Growth could come from larger numbers of Vietnamese and Thai tourists, but Cambodia’s casinos face competition here and abroad, particularly Hong Kong and Macao, Chea Peng Chheang said, adding that the Thai border casino business was particularly saturated.
“At the Thai border, it is already enough, but at Bavet near the Vietnam border…not yet,” he said, adding that casinos had mushroomed to fill demand without government incentives.
CPP Senator Phu Kok An, who owns Golden Crown casinos in Poipet and Kandal province, said the industry is already slowing.
“It’s becoming difficult to make a profit with the large amount of competitors,” he said. “There seems to be too many for Cambodia now.”
One way to attract more gamblers would be to streamline the process for Thai and Vietnamese tourists entering the country, Phu Kok An added.
“If gamblers want to go to Hong Kong or Macao, it takes two hours, but traveling to gamble in Cambodia takes three to four hours,” he said.
And Mey Vann, director of the Finance Ministry’s financial industry department, said that illegal casinos and online gaming are also threatening the official casino business.
Phat Bun Hour, assistant to Ly Yong Phat, another CPP Senator and casino owner, said the number of gamblers at Koh Kong International Resort Club & Casino declined by about 30 percent this year as compared to last year.
While the resort’s spas, restaurants and other amenities are doing well, the casino sees about 60 to 70 gamblers a day compared to 100 a year ago, he said.
He also cited the economic downturn in Thailand for some slowdown in the Cambodian casino industry in addition to the proliferation of other gambling establishments now in the country.
A manager at Star Vegas International Resort & Casino in Poipet said the resort is doing well, but similarly emphasized his resort’s various non-gambling facilities-a gym, hair salon, night club and karaoke bar-as attracting tourists.
“We have created special promotions to attract better entertainment in the casino,” he said. “It is not only a place for gambling but is a place where rich people can enjoy food, drink and concerts.”
SRP lawmaker Yim Sovann said Cambodian gamblers have fueled much of the industry’s growth despite laws limiting casino gambling to foreign patrons.
If the SRP wins the upcoming election, they will cancel all casino business contracts in an attempt to stop Cambodian gamblers from losing millions of dollars a year, he said.
“There are many Khmer people who entered the casino and lost their homes, land and other property,” he said.
But Phu Kok An defended casinos, saying the industry reduces poverty by providing well paying jobs to Cambodians-10,000 of them, according to ministry figures-especially in Poipet.
“Before, people only knew that border for instability,” he said. “But today the border is full of light.”
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