Cambodia's gambling law loosely enforced - Page 2

A closed casino (L) in Bavet town stands near a pawn shop (R), where down-on-their-luck gamblers frequently sell personal possessions such as motorbikes to feed their habit. Photograph: Rachel Will/Phnom Penh Post

Tuesday, 25 September 2012
Rachel Will and May Titthara
The Phnom Penh Post

“The law does not allow Cambodian citizens to play at the casino, but they still do it.”

Low taxation

Cambodia’s 61 casinos adhere to an alternative tax structure from other corporate businesses, perhaps to incentivise investment and invigorate the gaming industry.

Taxation of casinos is regulated through the Ministry of Economy and Finance, though the exact details of each casino’s tax agreement is decidedly opaque.

“Each casino has different activity. The more profit, the more [casinos] pay in tax; the less profit, they pay less,” Vann Mey, director of the department of financial industry, said before declining to elaborate further on casino tax structures.

But according to NagaWorld’s 2011 financial statement, the casino pays a fixed amount in taxes each month, with the company paying the Cambodian government $228,069 per month in gaming taxes and $103,500 in non-gaming taxes.

This arrangement allowed NagaWorld to pay just $3.98 million in taxes on more than $96 million in 2011 earnings – an effective annual tax rate of 4.1 per cent – significantly less than Cambodia’s standard corporate tax rate of 20 per cent.

According to Ben Lee, of Macau-based gambling consultancy iGamiX, Cambodia’s smaller casinos pay the government a fixed levy per gaming table and slot machine, estimating that the government collects about $1,500 per year for every table and $250 per slot machine.

The small slice taken in taxes by the government raises the question of who in Cambodia is benefiting from these gambling institutions.

“The income from the tax from casinos is not big,” said Chea Peng Chheang, secretary of state at Ministry of Economy and Finance. “[It’s] just a part of the state budget, and this income [is used] for all the government expenses.”

Closing time

At the edge of Bavet’s string of casinos, a single-room stall lights the night as gamblers reach the bottom of their wallets and the end of their ropes.

The 24-hour pawnshop purchases motorbikes, watches and jewellery from desperate gamers directed there by brokers who haunt the floor of casinos.

In the background of the shop’s eerie neon glow, the now defunct Winn Casino stands shrouded in darkness.

Though Cambodian gamblers continue to frequent casinos around the country, Lim Eang, director of casino security in Bavet for the Ministry of Interior, insisted yesterday that the number of Cambodians visiting casinos has been reduced since the national meeting of casino owners.

“Before, we have a lot of Khmer people playing, but now we just have a few Khmer people that dare to come to play,” said Eang. “Now all the casinos have nearly shut down because no Khmer people come to play.”

One Bavet casino dealer begged to differ.

“The law does not allow Cambodian citizens to play at the casino, but they still do it.”