Amid a crackdown on gambling in China, the Kingdom is becoming increasingly attractive for travelling gamblers
Cambodia’s gaming industry is increasingly seeking to attract Chinese gamblers via junket groups arranged in partnerships with local casinos and travel agencies from abroad.
Despite questions as to how much gamblers contribute to the tourism industry, casinos and junket providers alike argue that their operations draw a large inflow of international visitors.
According to the director of Global Betting and Gaming Consultants in the UK, Lorien Pilling, China places restrictions on gambling and prohibits its citizens from taking large sums of money out of the country.
This creates an opportunity for junket operators, he said, who after assessing the credit worthiness of potential gamblers, provide them with money to bet with in the destination country’s casino.
The junket provider then settles with the gambler on return to China.
“It’s also about knowing how much these people are likely to leave behind in the casino,” he said. “It is a labour intensive process to see which people you want to include in the group.”
Increasingly, due to a Chinese crackdown in traditional gaming hubs like Macau, Cambodia is becoming a more attractive destination for Chinese gamblers.
“[Cambodia is] not far away from China but less closely supervised than Macau,” said Wolfgang Georg Arlt, the director of the China Outbound Tourism Research Institute.
At Cambodia’s largest casino, NagaWorld, in the first six months of the year, VIP revenue increased by 25 per cent to $108 million, much of which the casino attributes to gamblers flown in via junket operators.
“The continued downturn in Macau gaming presents opportunities for the Group to further penetrate the regional and Chinese gaming markets, as junkets seek to diversify their operations to other parts of Asia,” reads NagaWorld’s six-month interim results.
According to their half annual statement, Nagaworld is working with Chinese outbound travel agents, and in July began flights through its own aircraft from Changsha in China to Phnom Penh.
Yet, while junket groups significantly boost casinos’ revenue, Global Betting and Gaming Consultants’ Pilling said just how much they contribute to the economy outside of the gaming floor is debatable.
“It would be a good thing if these tour groups could encourage things outside of the casino, but you have to keep in mind their main reason for bringing them is to gamble, they want them to spend as much time gambling as possible,” he said.
However, Maggie Au, a representative of Hong Kong listed Jimei International Entertainment Group Limited, who signed a junket agreement with NagaWorld in July said gamblers on tours are likely to spend money elsewhwere.
“When Jimei promotes to its patrons a particular country, it will also invite them to the local attractions, so Jimei believes that its junket arrangement signed with NagaWorld would also help with Cambodia’s tourism,” she said.
Closer to the Thai border, Donaco International Limited, which owns Star Vegas Resort and Club casino and hotel complex in Poipet, signed a deal with Heng Sheng Group, a Macau-based junket operator, in August.
Ben Reichel, executive director of Donaco, says that aided by junkets, Cambodia’s casinos contribute to state revenues and provide employment opportunities.
“Casinos employ thousands of people in Cambodia, in high-quality jobs that are well paid and do not require hard physical labour,” he said.
“The employment provided obviously contributes significantly to the Cambodian economy,” Reichel said via email. “In addition, casinos pay significant taxes, and attract hundreds of thousands of tourists each year, who all spend money in Cambodia.”
Junket gamblers are more likely to stay in the casino than visit major tourist attractions said gaming analyst Michael Ting of CIMB, but they will spend money in local restaurants and hotels, he added.
Regardless, the Chinese gambling market in Cambodia is still in its infancy, Ting said.
“[Chinese junkets are] are not that important [to casinos], as they are not bringing in a large number of customers yet,” he said.
“Phnom Penh is still mainly a regional ex-China market, though that can change in the future,” Ting added.
Whether gamblers are enjoying the Kingdom’s richer tourism options or not, Chinese visitors, who are among the world’s highest-spending outbound tourists, are flooding into Cambodia.
Second only to Vietnam in visitor numbers, more than 335,000 Chinese tourists came to Cambodia in the first six months of the year, a 22 per cent increase on the previous year, according to data from the Ministry of Tourism.
“The majority of Chinese tourism is landing only in Siem Reap, which they are focusing on the temples and culture,” said Sinan Thourn, chairman of Pacific Asia Travel Association.
“But the gaming traveller, they have their own agent who has pre-arrangements through their network and link directly to the casino, which can offer all free packages to them, but there are some [gamblers] who combine with city or temple tours as well.”