The casino potential of Cambodia, both online and offline

The casino potential of Cambodia, both online and offline

Cambodia has the potential to set the blueprint for regulated online gaming in Asia, says Mediatech Solutions’ head of Asia-Pacific Tom Moester

When you think of the Asian gambling industry, you think of the bright lights and towering casino resorts of Macau. And while China is certainly the largest gambling market in the region, other jurisdictions are starting to come to the fore with new opportunities for operators and suppliers looking to enter the fray, particularly online.

In recent months, Cambodia has emerged as an area of interest after the Ministry of Economy and Finance, which regulates the gambling industry, dished out ten new casino resort licenses with the majority set to be built in the port town of Sihanoukville.

The new permits will take the total number of licensed gambling operators in Cambodia to 75, with those currently up and running focussing their business on Phnom Penh, the country’s capital city. The licences cover around 7,660 slots machines and 2,600 table games across the region with the industry showing signs of growth – in 2013, casino and gambling taxes totalled USD$22m but last year the amount increased to $34m.

The new licences provide an opportunity for those looking to get in on the action – so long as they understand the gaming industry in Cambodia and how it works.

Enter the power player  

Every region has a power player, and Cambodia is no different. The NagaCorp has been granted a monopoly licence to operate casinos within a 200km radius of Phnom Penh until 2035. The firm is the largest hotel, gaming and leisure operator in Cambodia, and is the country’s only publicly listed company – it’s shares began trading on the Hong Kong Stock Exchange back in 2007.

It’s clear, then, that NagaCorp has a stranglehold on the immediate region surrounding the capital – particularly via its flagship NagaWorld integrated resort with consistently strong results – but opportunities still exist across the country.

Most of the other casinos are located around the towns of Poipet and Pailin, which sit along the border with Thailand, and Bavet, close to the Vietnam border. But the area getting the most attention of late is Sihanoukville, with major plans to turn it into a gambling centre. One developer – Malaysia-based SV International – plans to “bulk acquire every potential development lot” as it looks to turn the town into the “Macau of Southeast Asia”. Investment in hotels and casinos continues to pour into the town, particularly from China.

Many of the casinos in Sihanoukville offer online gambling options to Chinese customers looking to skirt the mainland’s ban on egaming. Online gambling has recently been allowed in Cambodia but the authorities require the sites to operate under a bricks-and-mortar casino licence and, in line with bricks-and-mortar policies, it is not open to Cambodians. While Cambodia has started to legalise and regulate the activity, a solid, consistent and reliable framework has yet to be achieved. Such framework is essential, because modern casino operators need an online proposition to offer an omni-channel experience to their players, a 360-degree product that allows customers to engage with the casino wherever they are, whenever they want to play.

In my opinion, however, a sustainable regulatory framework and egaming market could be just around the corner in Cambodia.

Gaming regulations are currently being revised and modernised, and it is understood this will include further opening up the online gambling sector. After this framework is finalised it presents a fantastic opportunity to build omni-channel offerings. Earlier this year we joined forces with Global Gaming Network to help deliver our omni-channel offering to casino operators in the country.

Cambodia has the potential to set the blueprint for online gambling in Asia – the requirement for operators to partner with land-based casinos is the same model being used successfully in New Jersey – and in doing so build a successful egaming market in its own right.

It’s early days, of course, but that’s why the opportunity for European and US operators is so interesting. Their experience and expertise is just what Cambodia needs right now, and for those willing to take the plunge, the rewards will be there.

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