CASINOS have served Cambodia as a rare and dependable cash cow ever since the country first emerged from its decades of civil war, in the late 1990s. On the face of it this year will be no different, with the government expecting to increase its takings, slightly, to $25m: a tidy sum for a tiny country, which still has the lowest GDP per person in South-East Asia.

All that revenue, not to mention the profits enjoyed by the 57 casinos that are scattered around Cambodia, will come from the losses incurred by foreign gamblers; Cambodian citizens are by and large banned from gambling in their own country. The Cambodian operators can thank the governments of neighbouring countries for the money they do make. Communist Vietnam enforces a ban against its own citizens gambling at home, which naturally pushes its punters over to Cambodia, where their money is welcome. And for a parallel reason, conservative Buddhist clergy have forbidden gambling houses from Thailand and Myanmar.

Such restrictive attitudes have ensured that the Cambodian casinos at Koh Kong and Poipet, along the Thai border, and at Bavet on the Vietnamese border, do a roaring trade. So too does the massive Naga Casino, which enjoys exclusive gambling rights within a 200-kilometre radius of the inland capital, Phnom Penh.


Cambodia’s government would be happy to see yet more. But the regional dynamics that made the country’s casinos boom are starting to change. Vietnam has six casinos of its own, but they have been limited to the use of foreigners. Members of its national assembly are thinking about letting Vietnamese citizens gamble in their own country, as a way to keep their tax revenue, while generating employment in the tourism sector. Myanmar is reconsidering its stance too. Its government has proposed legalising the construction of casinos, with an eye to luring in custom from Thailand and China. Any progress along these lines will challenge Cambodia's market position.

The neighbours’ considerations are forcing the Cambodian government to reconsider its own laws. Domestic operators are expanding their operations and trying to attract investors. But as things stand, Cambodian nationals are barred from the poker tables and the roulette wheel.

Ros Phirun, the government's spokesman on gambling and casinos, says no new decision have been made that would allow Cambodian citizens to wager in Cambodian casinos. He does offer however that the ruling Cambodian People's Party has been studying legislation in America, the Philippines, Vietnam and China, as it prepares to draft new laws to improve casino governance. With better laws, there might be less harm done in letting Cambodians gamble away their savings. "In general, our management of the gambling industry has not been thorough because we have not had the right laws in place. The world gambling industry has developed a lot, so it also affects us. In the past Vietnam had no casinos,” but now they do, he observes. What new laws might have been proposed behind closed doors are not to be made public for discussion until next year.

Cambodians love a flutter and will bet on anything, including the rain. In a game called chak tik pleang, punters place wagers on when it will rain, and how heavily. They do not, however love violent confrontations over gambling debts, and these are becoming daily fodder for Cambodia's crowded newspaper market. That kind of bad publicity is what pushed the government to ban slot machines in 2009. They had been the only means for Cambodians to gamble legally within their own country; now there are none. The prospect that soon many forms of gambling might be allowed raises serious questions about how the authorities will deal with problem-gamblers.

One suggestion is to follow the Singapore model. Casinos there charge residents who wish to enter a casino a cover fee of about $80 per day. Alternatively they may buy annual passes for  about $1,600 each. (Dubious thinking has it that only those Singaporeans who can afford to gamble in the first place will be willing to pay the entrance fee.) But the same pay-to-play fee structure would be ludicrous in Cambodia, a country where the minimum wage is stuck at about $100 a month and mean disposable income is not greater than $120 per month.

Cambodia’s casinos are facing challenges on other fronts. Naga Casino, the country's biggest, is undergoing a massive expansion. Its owners have put $369m towards the construction of “Naga2”. Plans for the sequel include chartering Airbus A320s to fly in high-rollers from Macau and mainland China.

Its grounds, however, surround a storied institute of Buddhist learning, and now threaten to overwhelm it. Scholars, monks and their libraries have made a home for themselves on their government-owned premises since 1930. Now the local Buddhist clergy fears the government is quietly selling off parcels of their land to the developers behind Naga2. The ministry “for Cults and Religion”—as it is actually called—denies it.

Their protests have culminated in standoffs between riot police and monks in saffron robes, which does nothing to boost the gambling industry’s image. But Buntenh, a spokesman for the Independent Monk Network, warns that his comrades would stage nation-wide demonstrations if their institute were demolished.

Many casinos back in the borderlands are feeling the pinch too. Some have gone bankrupt, leaving only derelict buildings behind. Inside others, punters are scarce and the staff look bored. In the coastal city of Sihanoukville this is being watched keenly by the backers of Queenco Casino. Yariv Lerner, the Israeli CEO of Queenco Leisure International Ltd, wants to develop nine hectares and is seeking investors for a 3,000-room, five-star gambling resort.

Signs that the industry is on the verge of slowing even as it plans to be growing were highlighted by Queenco’s recent quarters. Even with record-breaking annual returns for the industry as a whole, it notched up “significant losses” at its Cambodian operations in the first half of the year. Somewhat like a problem-gambler, it is blaming its losses on poor global economic conditions. A negative cash flow has forced it to dip into its reserves.

Now Queenco says its new property might have to be sold, if it cannot find new investors. If the Queenco deal were to fold, that would signal a clear end to the long winning streak that all the Cambodian casino operators had been riding together. Of course luck never had much to do with it. Now that their regional monopoly is over, they have little else to keep them going.