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Cambodia – Cambodia’s National Assembly approves new casino laws

Newspaper reports out of Cambodia have confirmed that the National Assembly has signed off on new legislation covering casino operations, including a includes a four per cent tax on VIP gaming revenues and a seven per cent tax on mass gaming revenues.

There are currently 193 casinos licensed in Cambodia.

There will now be a minimum investment requirement for any operator looking to set up a casino, designated gambling zones will be set up within Cambodia and new tax rates and tighter anti-money laundering will also come into play.

Speaking to The Khmer Times, Chairman of the National Assembly’s Commission on Economy, Finance, Banking and Audit, Cheam Yeap, said: “This law is aimed to ensure management of the integrated commercial gambling centers and commercial gambling to contribute towards boosting economic growth, promoting the tourism sector, creating more jobs, collecting revenue, and maintaining social safety and security.”

Minister of Economy and Finance Aun Pornmoniroth said new technology would be brought in to improve monitoring of casinos.

“Regulations on the commercial gambling sector are designed to enable the sector to operate under the umbrella of transparent law,” he said. “Under the effort of the government and investor’s trust toward the government, some national and international investors started casino investment on the Cambodian-Thai border in the Poipet area in 1999.”

Union Gaming analyst John Decree has said that as a result of the new taxation levels, estimates for Cambodia’s leading casino NagaWorld for 2021 are slightly down. He is pitching Adjusted EBITDA in 2021 at US$538m compared to the previous AU$564m while 2022 estimates have fallen from US$785m to US$746m.

“The new GGR taxes are mostly offset by cost savings initiatives stemming from the COVID shut down,” said Mr. DeCree. “We continue to believe shares of Naga are oversold and poised for a sharp recovery once investor confidence returns to the Asian gaming space, likely when cross-border visitation throughout the region picks up and/or when Macau begins to see some meaningful gaming volumes. The recovery has been driven by the mass market, namely expatriates living in Phonm Penh. This demographic primarily consists of Chinese expats living and working in Cambodia.

“The local expat community is a unique customer base for Naga that has plenty of capital in country and little to no reliance on junkets for credit for gaming liquidity. With limited entertainment options in the current environment, Naga has been able to grab greater wallet share from this customer segment,” he added. “Further, business travel to Phnom Penh has picked up in recent weeks, now with 32 weekly direct flights to Cambodia, including 21 from Greater China.”