At 7am, the border crossing from Vietnam to Svay Rieng’s Bavet town is already buzzing with the activity of foreign gamblers arriving for a day at the casinos along National Highway 1.
Along the border, tuk-tuk drivers and casino vans wait to transport players 100 metres to gaming havens armed with multilingual dealers eager to accept Vietnamese dong.
But throughout the day, a steady trickle of Cambodian players make their way past the ubiquitous security, taking their seats at the baccarat tables and chirping slot machines.
“[Khmer] can gamble at any table,” a staff member from the Las Vegas Sun casino says matter-of-factly. “Just change your currency at the cages to chips first.”
As the day wears on, the tables swell with more Khmer gamblers under the watchful eye of floor managers and guards.
In August, a meeting in Cambodia’s capital gathered senior management from each of the Kingdom’s 61 gaming venues to address growing rates of criminal activity on casino premises.
Amid the calls for stricter security, deputy national police commissioner Lieutenant-General Sok Phal made a suggestion that seems to have fallen on deaf ears.
“We would like to encourage all casino owners to strictly obey Cambodian laws, and immediately stop Cambodian citizens from entering and gambling in their casinos.”
Boats to border casinos
Gambling, in any form, is illegal in Cambodia for citizens, according to the Law on the Suppression of Gambling adopted by the National Assembly in 1996.
In 1994, the first casino licence was granted to NagaWorld, which then occupied a boat in the Tonle Sap river in Phnom Penh.
Since then, dozens of licences have been granted, but the government and casino operators have only loosely enforced the “no locals” policy.
“Cambodian gaming legislation is yet to be comprehensive and formalised,” said Thomas Pearson, senior legal counsel of Cambodian law firm BNG Legal.
On the nation’s western border, Oddar Meanchey province’s O’Smach town draws about 2,000 Thai nationals each day, says Khun Sarun, commander of the O’Smach military police.
But when police officials and casino security come off their daytime shifts, Cambodians easily find their way through the casino’s gilded doors, he said.
“There are still many [Cambodian] people losing gambling bets and becoming homeless and poor,” said Sarun. “Some people can become beggars because they are addicted to gambling.”
The capital’s gem
The casino floor of NagaWorld teemed with visitors on a recent weekday afternoon, crowding blackjack, roulette and baccarat tables and slot machines. Despite the impassive presence of suited security guards, Khmer people freely roamed the casino – and the gambling tables.
“There’s no ban on Khmer people coming here,” one security guard said. “They can come freely.”
One Khmer man, 32, said he visited NagaWorld regularly, winning or losing as much as $1,000 per day.
“I came here because I owed money. Now I come here five days a week. I have never been told I cannot gamble,” he said.
Florian Pastiu, director of Casino Ops for NagaWorld, declined to comment on the matter but noted that Cambodians with dual citizenship can legally gamble.
While current regulations do, in fact, make allowances for Cambodians holding two passports, a recent visit by the Post evinced no effort to check IDs.
On the day in question, a Post reporter approached three separate gaming tables with a Khmer colleague, each time asking, “Is it OK if my Khmer friend plays?”
Each time, they were invited to play without inquiry.
Despite numerous requests for comment over the course of the past week, the company offered no statement in time for publication of this article.
According to an analyst with intimate knowledge of Cambodian gaming operations, as much as 70 per cent of NagaWorld’s revenue is derived from local gamblers, with much of that revenue attributed to Cambodians’ penchant for gaming machines.
Traci Mangini, financial consultant for Entertainment Gaming Asia, a multinational gaming company that leases and jointly manages NagaWorld’s 670 slot machines, called the casino’s slot machines the “primary driver of revenue for our operations in Cambodia”.
A closed casino (L) in Bavet town stands near a pawn shop (R), where down-on-their-luck gamblers frequently sell personal possessions such as motorbikes to feed their habit. Photograph: Rachel Will/Phnom Penh Post
Cambodia’s 61 casinos adhere to an alternative tax structure from other corporate businesses, perhaps to incentivise investment and invigorate the gaming industry.
Taxation of casinos is regulated through the Ministry of Economy and Finance, though the exact details of each casino’s tax agreement is decidedly opaque.
“Each casino has different activity. The more profit, the more [casinos] pay in tax; the less profit, they pay less,” Vann Mey, director of the department of financial industry, said before declining to elaborate further on casino tax structures.
But according to NagaWorld’s 2011 financial statement, the casino pays a fixed amount in taxes each month, with the company paying the Cambodian government $228,069 per month in gaming taxes and $103,500 in non-gaming taxes.
This arrangement allowed NagaWorld to pay just $3.98 million in taxes on more than $96 million in 2011 earnings – an effective annual tax rate of 4.1 per cent – significantly less than Cambodia’s standard corporate tax rate of 20 per cent.
According to Ben Lee, of Macau-based gambling consultancy iGamiX, Cambodia’s smaller casinos pay the government a fixed levy per gaming table and slot machine, estimating that the government collects about $1,500 per year for every table and $250 per slot machine.
The small slice taken in taxes by the government raises the question of who in Cambodia is benefiting from these gambling institutions.
“The income from the tax from casinos is not big,” said Chea Peng Chheang, secretary of state at Ministry of Economy and Finance. “[It’s] just a part of the state budget, and this income [is used] for all the government expenses.”
At the edge of Bavet’s string of casinos, a single-room stall lights the night as gamblers reach the bottom of their wallets and the end of their ropes.
The 24-hour pawnshop purchases motorbikes, watches and jewellery from desperate gamers directed there by brokers who haunt the floor of casinos.
In the background of the shop’s eerie neon glow, the now defunct Winn Casino stands shrouded in darkness.
Though Cambodian gamblers continue to frequent casinos around the country, Lim Eang, director of casino security in Bavet for the Ministry of Interior, insisted yesterday that the number of Cambodians visiting casinos has been reduced since the national meeting of casino owners.
“Before, we have a lot of Khmer people playing, but now we just have a few Khmer people that dare to come to play,” said Eang. “Now all the casinos have nearly shut down because no Khmer people come to play.”
One Bavet casino dealer begged to differ.
“The law does not allow Cambodian citizens to play at the casino, but they still do it.”