No New Licenses for Online Gambling: Hun Sen

3 min read
Jin Bei Casino in Sihanoukville (Vann Vichar/VOD)

The government will stop issuing new licenses for online gambling operators and crack down on those running without licenses due to their impact on security and public order, according to a directive dated Sunday and signed by Prime Minister Hun Sen.

The order, which notes how foreign criminals have extorted people via online gambling venues in Cambodia, came just four days after Cambodian police working with Chinese authorities arrested 127 Chinese nationals in Preah Sihanouk province who were suspected of illegal online gambling and committing fraud using Voice over Internet Protocol, or VoIP, technology.

Cambodia has seen a “dramatic increase” in the number of gambling venues, with about 150 of Southeast Asia’s 230 licensed casinos located in the country as of January following a crackdown on money laundering in gambling mecca Macau, according to a July report from the U.N. Office on Drugs and Crime.

“Extensive casino complexes in Cambodia’s border areas and in Phnom Penh have also been identified as locations for bulk cash smuggling and the laundering of organized crime revenues,” the report says.

Finance Ministry spokesman Meas Soksensan did not provide the number of licenses issued for online gambling businesses, or say for how long online gambling licenses were valid. 

General casino licenses are valid for one year, according to a ministry notice.

Another ministry official who requested anonymity because he was not authorized to speak to the media said most licensed casinos currently operating offered both table games and online gambling.

As of June, the government gave out 163 casino licenses nationwide, including 13 new licenses this year, with 53 casinos currently in operation, according to the ministry official.

The remaining license-holding casinos were in development, the official said.

Hun Sen ordered Interior Minister Sar Kheng, Finance Minister Aun Pornmoniroth, Minister in Charge of the Council of Ministers Bin Chhin, provincial governors and commanders of the National Police and National Military Police to implement the order.

Soeng Senkaruna, spokesman for rights group Adhoc, welcomed the measure and said he would monitor its effectiveness.

“Gambling will not provide any growth. Based on our own review, we found that there are many problems in managing all of these businesses, especially online. Authorities should find ways to effectively manage them,” Senkaruna said.

A draft law on casino management is currently in the hands of the Finance Ministry.

Timothy McNally, chairman of NagaCorp, which operates the NagaWorld casinos in Phnom Penh and holds a monopoly license on casinos in the capital until 2035, suggested in a July interview with Bloomberg that Cambodia’s new gaming law would include a casino tax of under 10 percent and would be passed soon.

“I hate to speculate but I think it’s coming soon that we’ll see the gaming law put in place,” McNally said in the interview.

“In our dialogue over the years with the Cambodian Ministry of Finance, our input into the legislation, we expect it to be at least on the low-end in relation to our competitors around the region,” including Macau, which has a casino tax rate of 35 to 39 percent, and Singapore, which has a rate of 5 to 15 percent, McNally said.

“We think it’ll be under that 10 percent figure and … somewhere where we think we’ll remain extremely competitive, but I don’t want to speak on behalf of the Cambodian government,” he said.

Last year’s National Budget Law showed that Cambodia had collected $46 million in taxes from casinos in 2018.

The Hong-Kong-listed NagaCorp reported a gross gaming revenue of $1.4 billion last year and net profits of $390.6 million. The firm reported paying $8.81 million in income tax, the Phnom Penh Post reported in February.

(Translated and edited from the original article on VOD Khmer)

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