The Casino: a place where dreams are sometimes made, but more often shattered; where
glamour and vice sit side by side; a site regarded as a favored haunt of film stars
and starlets, gangsters and drug lords.
Cambodia is not short of flash Vegas-style casinos. Phnom Penh has its floating Naga
Casino, a favorite stop for Chinese and Taiwanese businessmen. A garish black and
red structure stands on the Vietnamese border, while Sihanoukville too has a couple
of smaller operations catering mainly to expats and tourists.
But these operations are small fry compared to those along the Thai border. Around
a dozen casinos of varying sizes line the border at Poipet, Pailin, O'Smach and Koh
Kong. Most are part-owned by Thais, and some 90 percent of their customers are Thai
Recent statistics show that nearly 7,000 gamblers cross the border every weekend
at O'Smach alone, with amounts of up to $360,000 wagered in just two casinos.
The reason for such large numbers of punters is simple: casinos are banned in Thailand,
so many Thais, who are not averse to a flutter, flock to the Cambodian side of the
border each weekend.
There are some in the Thai government who believe this is costing Bangkok a substantial
amount of tax revenue. But that could soon change: there has been talk recently that
Thailand will legalize casinos. Thai Prime Minister Thaksin Shinawatra is said to
back the plan.
So what would that mean for Cambodia's booming border businesses? Depending on who
you talk to, everything and nothing. Potential side-effects could see some casinos
close causing job losses, lower revenues, a rise in crime, and former casino employees
turning to a life of drugs and prostitution.
That is indeed a bleak outlook, says Bengt Juhlin of the UN's Office of Drugs and
Crime, but it is not necessarily the full picture. Some of the casinos could yet
lure certain punters.
"If the people had the chance, they would not come to Cambodia ... ordinary
Thai people would not make the effort," he says. "[But] there would be
people who, for very special reasons, would make the trip to Cambodia. If you are
interested in money laundering, and the rules are more relaxed in Cambodia, they
will take advantage [of that]."
In other words, the country's casinos could still offer a solution to criminals wanting
to 'clean' their dirty money. The method is simple: large profits from illegal operations
are laundered by exchanging the money for chips, then cashing them in. The money
is attributed to a big win and thus legitimized.
"The problem so far is they have not been under any particular legislation that
has forced them in a transparent way to show the flow of money. This has potentially
opened them up for criminal activity such as money laundering," says Juhlin.
"There is always a lot of talk and suspicion, but I don't think anybody has
been taken to court for money laundering."
But there are doubtless people here who need such a service: the profits from illegal
timber, drug smuggling, people trafficking and large-scale bribery are worth tens
of millions of dollars a year. That requires a good launderer.
Concrete proof of money laundering is hard to come by, not least because there have
not been any prosecutions to date. Despite the US stance on its war on terror - money
laundering by terrorist groups is a declared target - the US Embassy says they have
no aid programs which aim to tackle the issue.
Juhlin says the Ministry of Interior (MoI) is reviewing the current crop of rules
"The government is now preparing legal procedures that will tighten up the controls
and flow of money. We see this as a step forward," says Juhlin. "The government
established a special task force to investigate the operations of casinos a couple
of months ago, but we can't tell at all to what extent they will make any progress."
The government drafted new legislation to combat money laundering last year. As part
of that it set up a commission, but its current status is unclear. None of the MoI
officials contacted by the Post was able even to confirm whether such a task force
But representatives of the international community don't seem too worried about money
laundering here. Urooj Malik, head of the Asian Development Bank (ADB), says he is
more concerned that the closure of casinos could result in higher rates of prostitution
and drug crimes.
"It is likely to have an effect as Thais are the main customers," says
Malik. "On a social point, jobs will also be lost."
Juhlin says the social benefits of casinos are far reaching.
"[Casinos] create a lot of jobs and they are quite well paid," he says.
"It creates a substantial lift for the community. In Koh Kong, without the casino
there would be no bridge [and] Koh Kong would not be electrified. They create infrastructure,
The concerns about job losses are shared by Ros Sovanna at CARE, an NGO that works
with casino workers. He says employees are already suffering because of the closure
of the Thai-Cambodian border, a result of the diplomatic crisis that followed anti-Thai
rioting in January.
And if Thailand opens its own casinos, the likely result will be fewer Thai customers.
That could drive casino employees, who are already at a higher than average risk
of HIV/AIDS, to look for alternative incomes.
"There are around 10,000 casino workers and they are very poor. I think if it
continues like this there will be a big effect and a socio-economic impact,"
he says. "They are lonely. If they are not happy and there is a lack of money
it could make them become indirect sex workers."
The government, however, is bullish about the possible effects of competition. A
senior official at the Ministry of Economy and Finance (MEF), who spoke anonymously,
says by the time Thailand has built enough casinos to constitute a threat, Cambodia's
infrastructure and tourism will be booming with revenue streaming in from other areas.
Of greater concern, he says, is the border closure.
"We will not depend on Thai interests," he says. "They don't just
depend on one nation. In the long run we would look to different projects."
Minister of Tourism Veng Sereyvuth shares that long-term optimism. He says Cambodia
has much more to offer then mere casinos.
"I don't think it is threatening," Sereyvuth says. "Thailand and Cambodia
compliment each other quite well. It is about multiple attractions, different things
that different countries offer. Different clients look for different things [so]
I don't think business will suddenly dry up."
Other than jobs and tourists, the country's casinos are meant to generate tax revenue.
But the MEF official says nobody in government really knows what the industry is
worth or how much money is gambled at casinos.
However it is probably a substantial sum if the eye of the International Monetary
Fund (IMF) is a reliable guide. The IMF, which is engaged in improving various aspects
of revenue raising, suggested casinos be taxed on estimated turnover.
The MEF official says the government has "more or less" taken that suggestion
on board, but on a monthly, not an annual, basis.
All the casinos operate under the same basis with regard to revenue collection, he
says. Finance teams make monthly visits to each establishment and check turnover
by counting the chips cashed in and the number of punters present.
It all sounds a bit haphazard, an impression that seems fair given his comment that
"nobody has accurate information" about turnover.
"We are hoping to collect 2 percent of the total national revenue from casinos
in 2003," he says, "but because of [the border closure] we cannot assess
whether we can do this."
The Post estimates that would total around $8 million. But opposition MP Son Chhay
says past experience shows such a sum is highly unlikely.
Chhay, who favors closing all casinos, says previous experience shows casinos have
never contributed much to the government's coffers.
"Every time we debate the Budget we can't understand why, until 1999, there
was hardly any evidence that money was being collected by the government [from casinos],"
"The amount is unbelievably low ... compared to what casinos are making annually.
We're talking about $1 million to $3 million a year [earned by government]."
The MEF official admits past problems, but insists tax collection has improved since
1999. He blames the earlier problems on the casinos lacking a tax-paying culture.
But Son Chhay is of the firm opinion that the only good casino is a closed casino.
In the late 1960s legalized gambling brought misery to many Cambodians while benefiting
an elite few, and he is concerned the same is happening again.
Perhaps decisions made in Bangkok will force the issue. Despite the social costs,
he says, the benefits of losing the casinos would far outweigh the disadvantages.
"I believe that our only hope is to reduce gambling in Cambodia," says
Chhay. "It can only bring harm to this country, which lacks the rule of law
and is corrupt, without the proper regulations that can be used to ensure proper
conduct in business."