Cambodia Continues Efforts to Clean Up Casino Industry
Cambodia, reeling from years of bad press due to widespread illegal activity tied to its gambling market, is now actively working to enhance its casino industry. It has begun encouraging the development of world-class integrated resorts (IRs) and offering attractive policies such as competitive tax rates and other incentives.
A group of casinos in Sihanoukville, Cambodia. (Source: News.com.au)
LISTEN TO THIS ARTICLE:According to Khim Oudam, deputy director of licensing at the Commercial Gambling Management Commission (CGMC) of Cambodia, these measures are part of a broader effort to position the country as a competitive destination for gaming investors and operators in the region.
Related: Cambodia Closes Southern Provinces to New CasinosThe gross gaming revenue (GGR) tax in Cambodia is set at 7% for mass-market operations and 4% for VIP gaming, making it significantly lower than many neighboring jurisdictions. Additional taxes may apply to corporate entities, but the relatively low GGR tax has been highlighted as an appealing factor for casino investors.
This was a topic of discussion during the Global Gaming Expo (G2E) Asia 2024 gaming industry event held in Macau, where industry experts noted that Cambodia's tax structure could offer advantages compared to countries like Thailand, which is considering a GGR tax rate of 17%, and Macau, where the effective rate is approximately 40%.
As of last year, Cambodia had 87 operational casinos, many of which are small-scale establishments located in border towns such as Bavet and Poipet, serving predominantly Thai customers. Despite the high number of casinos, Cambodia currently has only one integrated resort, the NagaWorld complex in Phnom Penh, operated by Hong Kong-listed NagaCorp Ltd. NagaWorld holds a long-term monopoly for casino operations in the capital, limiting new investors to other locations within the country.
NagaCorp is in the process of expanding the NagaWorld complex, with plans for a third phase known as Naga 3. Initial projections for the project's budget reached as high as $3.5 billion, though subsequent revisions following the COVID-19 pandemic have brought the budget down to $700 million or less.
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Competing on the Global IR Stage
During a presentation at the Thai Entertainment Complex Summit in Bangkok, Oudam emphasized Cambodia's ambitions to develop more IRs. While some existing casinos in the country have the potential to upgrade to IRs, new applications for IR projects have also been submitted.
The commission's IR development department has established a minimum capital investment requirement of $500 million for new IRs. These developments are expected to feature diverse facilities, including restaurants, shopping malls and other amenities, alongside their casino operations.
Cambodia's regulatory framework for the casino industry is governed by the Law on Management of Commercial Gambling, which was introduced after more than 15 years of research and was officially promulgated on November 14, 2020. This law provides the foundation for the development of a modern IR sector in Cambodia.
Officials hope that the combination of attractive tax policies and infrastructure investment will encourage the establishment of more large-scale resorts that can compete with those in neighboring jurisdictions. The long-term goal is to position Cambodia as a leader in the regional gaming market while fostering economic growth and tourism development.
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