Posted: July 14, 2022, 7:24 a.m.
Last update on: July 14, 2022, 07:24h.
The Cambodian casino industry has had more time than others to rebound from the COVID-19 pandemic. However, based on the latest government data, 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 still experiences a significant shortage of tourists.
The Cambodian government has seen a decline in commercial gambling revenue in the first half of 2022. The results are well below what they had expected, according to Phnom Penh Post Office.
Casinos slow to bounce back
Only 20 casinos are operational. That’s out of more than 200 that held a license in 2021. As a result, Cambodia, which first closed its land-based casinos in March 2020, is losing a significant amount of revenue.
According to government budgetary requirements, the casino industry is responsible for KHR174.2 billion ($43.55 million) of the country’s revenue every year. This is in accordance with the Management of Integrated Resorts and Commercial Gaming Act (MIRCG), which came into force in November 2020.
However, in the first six months of 2022, the 20 casinos paid out only a fraction of the amount. Of the 8% of the gambling segment turned over to the government, most came from lotteries and raffles.
It is unclear 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 of criminal activity, it is not a place that many tourists would want to visit.
NagaWorld in Phnom Penh doesn’t attract much traffic either. The workers have been on strike since the beginning of the year, regularly drawing complaints of human rights violations from the government. However, the property expects to improve and wants to add a gaming area for high-end mass-market players later this year.
Current license renewals
The MIRCG also addressed the need for casino operators to apply for annual license renewals. Ros Phirun, deputy director general of the finance ministry’s financial industry department, said many have not. He pointed out that operators in border areas such as Poipet or Bavet had not yet renewed their licenses.
Phirun said Phnom Penh Post Office that while local tourists have traveled more than ever, attracting international tourism is a challenge. This is especially true in the border areas of Thailand and Vietnam, which have only recently opened.
The slow revenue collection is the result of the resumption of commercial gambling operations. In addition, lack of revenue has made it virtually impossible for some operators to meet government capital investment requirements or pay for license renewal.
Phirun said 143 casinos have applied for new licenses; 13 have been approved. One of them was Donaco International’s Star Vegas in Poipet, which resumed operations on June 17.
From 2019 to 2020, casino tax revenue fell 53%. The MIRCG arrived in November 2020 as a mechanism to help Cambodia recover, in part, some of the losses. However, due to a lack of casino games last year and given the shortfall in the first half of this year, it seems that the recovery is still a long way off.