Cambodia seeks to boost gaming reputation with Australia collaboration

Cambodia is intensifying its efforts to regulate its gambling sector and enhance its reputation. A recent collaboration with the Victorian Gambling and Casino Control Commission (VGCCC) in Australia aims to strengthen the framework for gambling oversight. This cooperation has been termed a 'war to restore reputation' following accusations of fraud centers.

The regulatory bodies exchanged knowledge and methods. Cambodia hopes to benefit from Australia's experience in dealing with similar challenges and to close gaps in its own system.

Numbers and facts

As part of its anti-online fraud efforts, Cambodia recently shut down 91 casinos accused of supporting fraud networks. This came after China demanded tougher action on cross-border gambling. Xinhua, the news agency, also reported raids on 250 online scam centers over the past nine months, and over 13,000 foreign nationals linked to online scam operations in Phnom Penh were also targeted. These figures underscore the scale of the problem and the need for more robust regulatory measures.

Cambodia, with a population of 16.3 million and a territory of over 181,000 square kilometers, has experienced steady economic growth in recent years. Its Gross Domestic Product (GDP) per capita rose to over $1,600 in 2019, and total GDP reached approximately $27 billion. Tourism and hospitality are the country's second-largest income source after the textile industry. In 2019, over 6.6 million international tourists visited Cambodia, a tenfold increase since the beginning of the 21st century.

Gambling for Cambodian citizens has officially been illegal since the 1996 Law on Suppression of Gambling. Nevertheless, illegal gambling is widespread. For foreigners, casino gaming was introduced in the capital Phnom Penh in 1994. A peculiar regulation banned gambling within 200 kilometers of the capital, with the exception of NagaWorld, the city's only casino resort. Cambodia had around 50 gambling facilities in 2014, a figure that increased to about 120.

From July 2020, new tax rates were introduced with a gambling regulation law: 7 percent of the total Gross Gaming Revenue (GGR) for existing operators. For integrated resorts (IRs), 7 percent of mass GGR and 4 percent of VIP GGR apply to attract investments, making these tax rates highly competitive in the Asia-Pacific region.

Background

The cooperation between Cambodia and Australia aims to 'share insights on casino regulation, compliance and enforcement, risk-based approaches, and responsible gambling initiatives.' The VGCCC itself has a history of rebuilding its reputation. After criticism, Victoria banned junkets and CCTV monitoring, introduced a program for reporting criminal activities, and strengthened cooperation with AUSTRAC and the police. These measures led to a stronger and more reputable framework. Cambodia seeks to follow a similar path to move away from a past plagued by controversy.

"We value opportunities to engage with international counterparts and strengthen relationships that support knowledge exchange, continuous improvement and effective regulation. We thank the CGMC delegation for their engagement and look forward to continued cooperation in the future." - VGCCC, on social media

Cambodian Prime Minister Hun Manet recently issued a stark warning. He stressed that the country is engaged in a 'war to restore reputation.' The accusations of Cambodia being a hub for a Southeast Asian scam network are to be taken seriously. He stated at a business conference that online scams are not only a new form of transnational crime but also create an informal or gray economy that seriously affects Cambodia's reputation and public trust. Cambodia will continue to fight against them.

An example of cross-border casino activities is the Star Vegas Resort and Club in Poipet, owned by Australia-listed Donaco International Ltd. Ninety percent of its 5,000 daily visitors come from Thailand. Such border locations are typical for Cambodian casinos to facilitate entry for foreign players.

Why it matters for German players

For German players, the developments in Cambodia have no direct impact. The regulation of online gambling in Germany is exclusively governed by the Interstate Treaty on Gambling 2021 (GlüStV 2021), which mandates strict licensing by the Joint Gambling Authority of the Federal States (GGL). German players should only use online casinos listed on the GGL whitelist, as these alone offer legal and secure gaming environments.

Providers with licenses from other jurisdictions like Malta (MGA) or Curaçao are illegal in Germany for offering gambling. German regulations include a deposit limit of 1,000 euros per month and a stake limit of 1 euro per spin for slot games. Furthermore, user gaming activities are registered and controlled via the central monitoring system LUGAS. This serves to protect players and combat crime.

What it means for GGL-licensed casinos

For GGL-licensed casinos, the news from Cambodia underscores the importance of transparent and strict regulation. The Interstate Treaty on Gambling 2021 aims precisely at this: to protect players from fraud and gambling addiction while creating a controlled market. Cambodia's efforts to clean up its sector demonstrate how crucial it is to have clear rules and effective enforcement from the outset. GGL-licensed casinos benefit from a clear legal framework that provides security for both them and players. Illegitimate operators not on the GGL whitelist are combated to maintain market integrity. This is a crucial competitive advantage for legal providers.