Andrew Klebanow, a senior manager at Global Market Advisors, recently discussed the game-changing casino moves Cambodia is making. He said while Cambodia is not new to gambling, the country has made great strides to encourage investment in gambling. The country has had casinos since the 1990s. Cambodia does not offer gambling to noncitizens, however. The country prohibits its citizens from gambling except on rare occasions. Cambodia has managed to make a profit from gambling for the last 20 years. This has happened mainly through small, gambling venues located in large cities and close to border crossings.
However, Cambodia is moving into an entirely new market for gambling in the region: luxury gambling houses. Because no other country in the region is offering luxury gambling, Cambodia believes this venture will increase profit margins.
Cambodia’s Gambling Fixation
Cambodia is like many countries in Southeast Asia. Games and gambling have been a part of Asian culture for decades. Cambodians love to play card games, and other games are popular in the country as wagers. However, until recently, the Cambodian government has been reluctant to allow gambling in the country. It was the government’s philosophy that gambling is a vice that it must restrict. In fact, the country, which is overwhelmingly Buddhist, believed gambling should not be a part of a person’s daily life.
However, the country has struggled to find ways to raise its GDP. It wasn’t that long ago that Cambodia sank into anarchy and genocide. Not only did the country lose more than a million people, but it also struggled to find prosperity again. Klebanow said gambling may represent a way for the country to continue to slowly rebuild its businesses and regrow its economy.
The New Frontier
Until recently, gambling in Cambodia consisted of strip gambling centers located on the country’s borders. The focus of the gambling strips was to capitalize on traffic coming in from Vietnam and Thailand, where gambling is illegal. Tourists who were crossing the borders for business could stop and gamble for a while before returning home. Because Vietnam has limited gambling for its citizens, and Thailand prohibits gambling, the tourist trade was profitable for Cambodia.
However, there was no art or luxury involved in the gambling strips. While Cambodia saw a profit from these strips, it was not big money. For that, Cambodia would need to lure tourists who would come to gamble for several days and, then, return home. Cambodia began to think seriously about luxury casino offerings.
Moving Forward
Klebanow said the development of the new Naga2 Casino in the capital of Phnom Penh is a game changer. Naga2 represents a whole new era. Built next to another casino, Naga1, Naga2 is completely different. It offers a five-star gambling experience, which attracts high rollers to the country from other areas in Asia, according to Klebanow. Naga2 offers high rollers the luxury they’re used to in other places, such as Macau, Australia, and the United States.
With the entry of Naga2 into the luxury gambling market, Cambodia can compete for gambling dollars on a global scale. In some casino markets, high-roller gambling accounts for more than 80 percent of a casino’s profit. Cambodia is saying to the world that it wants to attract luxury gambling business. The country hopes foreign investments will continue to grow its casino industry.
Cambodia is looking at its future, and it looks bright with regard to gambling. The new luxury casino employs nearly 9,000 people. The country expects it to account for 15 percent or more of its GDP by 2020. If Cambodia can continue to build luxury casinos, it may become a giant in the region with regard to gambling.
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