Friday, January 16, 2009

Cambodian casinos

There are numerous casinos in Siem Reap. In fact, there is a Malaysian-owned one just in front of the Bloom shop here. It is called SOHO and is a favourite with my father. Whenever he visits, he can be found gambling in the casino. His favourite game is Bacarrat because, he says, of the low house edge (only 1.06%). (I myself dislike gambling).

Except for Naga casino in Phnom Penh, the casinos in Cambodia are smallish, and to draw in customers, they all provide free food, drinks, including alcohol and cigarettes. Many in Siem Reap are Korean own and are patronised by Korean tourists. In November, a Korean man committed suicide in a hotel in Phnom Penh after gambling away his fortune.

I had been to Naga once before, when a Singaporean friend's aunty came for a visit and invited me to join the group, which had been flown in free from Singapore just so they would gamble at the casino. They were also put up, free, at a hotel, and had free food vouchers at the casino. The food was delicious and expensive, with prawns, fish--the best you would find in an upmarket Chinese restaurant. All this to draw them to Cambodia to gamble. (The ploy worked as that group of Chinese aunties from Singapore lost on average USD1000 per person).

Naga, located by the riverside in Phnom Penh is fairly large, and is owned by Malaysian tycoon Chen Lip Keong, ranked #21 on Forbes' list of richest Malaysians. From Forbes:
"[Chen] Founded NagaCorp in 1995, the year he obtained 70-year gaming license in Cambodia; eventually built country's largest gaming resort, NagaWorld. Listed in Hong Kong in 2006. Serves as economic advisor to Cambodia's prime minister. Controlling shareholder and president of Malaysia tourism company, Karambunai. Trained medical doctor, headed Composite Technology Research, aerospace outfit owned by Malaysian government, for 7 years.
When I visited Naga in 2006, I was blown away. It was surreal, going from the hot streets of dusty and dirty Phnom Penh and into the cool air-conditioned glitzy punter paradise. The lighting was mellow and there was a lot of plush, red furnishing. I saw many ethic Chinese (from all over Asia), some Thais, but no Cambodians. Naga does not allow Khmers inside. Malays are also barred from casinos in Malaysia but that is because of law. Malaysian Malays are not permitted to gamble because Islam forbades gambling. On the other hand, Malaysian Chinese or Indians or Eurasians are allowed into local casinos.

Recently, Cambodia made similar moves. My Khmer friends tell me Cambodians are now banned from casinos. My father, who is here on a visit, also mentioned how there are no more Khmers in the casino, where before easily half of the punters were local. One casino here had to let go of 15 staff members because of the fall in punters and business.

It seems the concern is with slot machines (aka jackpot machines and one-armed bandits) as sports betting is still permitted. In late December, Cambodian Prime Minister Hun Sen ordered the closure of 15 unlicensed slot machine centres:12 slot machine centres in Phnom Penh, two in Sihanoukville and one in Kandal province.

PHNOM PENH, Camboidia -- As reported by The Phnom Penh Post: "The government has ordered all slot machines at entertainment clubs to be removed, but will allow them to remain in many of the Kingdom's hotels, saying the change will improve security and public order.

"According to a directive signed by Prime Minister Hun Sen on December 2, 'the government has agreed in principle to open entertainment clubs equipped with slot machines at hotels in cities and some provinces.'

"To control abuse, the government will require companies running slot machines to get licences from the Ministry of Economy and Finance, and only hotels that have certifications from the Ministry of Tourism will be allowed to house the machines, the new law stipulates.

"If a company refuses to move their machines into hotels within six months, the ministries of the Interior and Economy will withdraw their licenses.

"The prime minister's directive clearly reiterated that Cambodians are not allowed to go to an area designated for slot machines, adding that if this law is broken, the offending company's license will be immediately withdrawn..."

There are there are 50 licensed casinos and more than 200 gambling centres in Cambodia, Son Chhay, a lawmaker from the opposition Sam Rainsy Party told the Phnom Penh Post.

Son Chhay also claimed the Cambodian government collected USD10 million from casinos in 2008. It was funny reading his description of how the government's attempts at banning Khmers from gambling have failed:

"I still see luxury cars carrying government number plates parked outside [slot machine] clubs. The cars clearly belong to senior officials," Son Chhay said.

Meanwhile in Singapore, the government reversed a two-decade long opposition to casinos in style. The "Integrated Resorts" or IRs will be the world's most expensive casino resorts constructed, costing up to US$6 billion. The Singapore resorts will need to produce annual earnings before interest, taxes, depreciation and amortization (EBITDA) of $1 billion, nearly double the EBITDA at the world's most successful casino, a source told Asia Times Online. The expectations are likely to fall short, as the IRs, scheduled to open this year, do so in tough economic climate.

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