Casinos adapt to survive gaming ban - Tuesday 3rd of March 2009

Many of the capitals gambling clubs are now operating as restaurants or coffee shops following the governments outright ban on all venues offering slot machines and electronic gaming machines.

The Ministry of Economy and Finance issued its directive on Wednesday following an order from Prime Minister Hun Sen. All valid gaming licences to operate betting machines were ruled invalid from that date, ostensibly to protect public morals.

An official at the ministry said the directive had led to the closure of 60 gambling clubs in the past week. He said the industry contributed more than US$20 million annually, of which US$1 million came from Cambo Six.

The manager of one former gambling club, the Golden Tower, said his company had laid off 1,000 staff.

"In order to save some of the jobs weve changed our club to a restaurant," said a manager who identified himself only as Sophal. He said each worker had earned a monthly wage of around US$100.

Most gambling clubs had enforceable contracts with their landlords, who insisted on clubs meeting their monthly rental payments, he added.

"We cant cancel the contract with our landlord - we had agreed to pay them rent for the club space," said Sophal. "For that reason we have had to create another business rather than completely close down."

The manager of another club, the Atlantic, said his business would now look at serving food. He said the ministrys decision had cost thousands of people their jobs.

Tax revenue lost

"We have to pay rent every month, so we have to do something - and this is better than doing nothing," said the manager, who requested anonymity. "We thought we were protected by our business licence, but in fact were not."

He added that his club contributed US$7,000 in taxes each month to the treasury, spent US$10,000 on wages, US$5,000 on under-the-table payments to the local authorities and US$20,000 for its business licence.

But the clampdown has not affected all gambling outlets. CPP Senator Phu Kok An, the owner of Golden Crown Casinos, told the Post Sunday that the government directive did not affect slot machines in legal casinos along the border with Thailand and Vietnam.

He said that it also did not affect the NagaWorld casino located on the same block as Parliament in Phnom Penh. The Post ascertained Saturday that slot machines are still operating at NagaWorld.

"As long as we can ban Khmer people from gambling, slot machines in casinos will not be affected," he said.

Cambodian nationals are banned from entering licensed casinos to gamble.

Phu Kok An agreed that several thousand people had lost their jobs in the clampdown. But, he said, the spread of gambling had created social problems that outweighed the benefits. He said those investors who already had a licence would not be able to start their businesses, but although they might be disappointed, they ought to follow government policy.

"I think that those places offering slot machines should change and become restaurants or coffee shops," he said.

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