Tracing the conscious shift of Cambodia’s casino regulation

Lea Hogg August 6, 2024

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Tracing the conscious shift of Cambodia’s casino regulation

Cambodia, particularly the coastal city of Sihanoukville, has become a hub for both traditional and online gambling. The country’s strategic location, improved 4G network access, and favourable economic conditions have attracted significant Chinese investment, leading to a thriving gambling industry.

However, this fast-expanding sector has also led to a surge in scam operations and human trafficking, turning Cambodia into a major hub for organized crime in the region. The influx of Chinese capital has triggered economic unrest, exacerbating wealth disparities and leading to a rise in land grabbing incidents. The local population has been largely excluded from the sector’s profits, suffering instead from rising unemployment and an increased cost of living.

In a surprising move that significantly altered the gambling sector of the region, Cambodian Prime Minister Hun Manet, (pictured above), issued a prohibition on the establishment of new casinos in the coastal provinces of Kep and Kampot. This decision was driven by an ambition to channel investments into other sectors such as hospitality, tourism, manufacturing, industry, agriculture, trade, and special economic zones. This in Cambodia’s approach to managing its gambling industry in order to preserve the cultural and religious heritage of these regions, It also ensures the security and protection of popular tourist destinations.

Cambodia currently boasts 184 licensed gaming halls, as reported by the Commercial Gambling Management Commission of Cambodia. Interestingly, all Cambodian casinos cater exclusively to foreign patrons. Since 1996, gambling has been deemed illegal for locals. In 2020, Cambodia enacted Article 19 of its Law on Management of Commercial Gaming, which prohibits gambling facilities in certain locations due to cultural or religious reasons.

To mitigate the social unrest and crime fuelled by the sector, Cambodia has partnered with China to reform its online gambling environment. Cambodia formally banned online gambling in 2019 and passed a comprehensive framework governing the country’s gambling activities. Now, under Prime Minister Hun Manet, Cambodia says it hopes to transform Sihanoukville into a business hub for shipping, manufacture, and finance, further supported by China’s global infrastructure project, the Belt and Road Initiative.

While Philippine and Cambodian legislation each seek to ameliorate the problems of their gambling sector, difficulties remain in constructing policy to effectively crack down on online gambling. Of course there are other options for gambling operators as they could easily move to nearby countries with looser controls, such as Myanmar, Palau, or Nepal.

The adverse effects of online gambling in countries such as the Philippines and Cambodia, which encompass issues like human trafficking, transnational crime, and cybersecurity – areas where the United States has a vested interest in safeguarding – should be a significant focus for policymakers. The United States can also play an integral role in collaborating with ASEAN to engage in capacity building with the bloc’s divisions for cyber cooperation and human trafficking.

As countries weigh the economic benefits against the social costs of online gambling, it is clear that the industry poses severe risks. The careful reassessment of existing national and regional regulations by Cambodia’s government represents a cautious approach to reverse any damage that may have been caused by the explosion of online gambling.