IAG 2006-01 Jan - page 14-15

InthewakeofmainlandChina’sgamblingcrackdown,twocasinosfrequented
bymainlanders in theRussianportofVladivostokhavecloseddown,and the
Chinese statemedia reports that between 68 and 84 casinos have closed
inMyanmar, Laos and Vietnam since Yunnan provincial police launched a
campaignagainstbordergamblingestablishments.
Vietnam and Cambodia
While theChinesegamblingcrackdownhasnothelped,Vietnam,Cambodia
, Myanmar and Laos were hardly on the way to becoming major gaming
destinations. Their largely unregulated gaming industries are hardly
appealing to foreign investors.
“Vietnamese casinos are small, they’re restricted to hotels and they’re only
for visitors. They’re not destination resorts at all,” says Mr. Green. In any
case, gamingdoes not appear high onVietnam’s agenda, and for historical
reasons, Vietnam does not attract many Chinese visitors—the lifeblood of
casinos in the region.
OneofVietnam’s two casinos,DoSon, is ownedbyMacaugambling tycoon
Stanley Ho. Taking a leaf from the Koreas, in October 2005, a lawmaker in
Vietnam’scommercial hub,HoChiMinh,proposed that thecity shouldbuild
acasinodedicated to serving foreigners.
In Cambodia, Naga Casino, located in the capital, Phnom Penh, “has
pretensionsofbeingadestination,”revealsMr.Green.“Thatapart,theborder
casinosare justgamblingpalaces.Acoupleof themare tied inwithhotels.”
A few years ago, the Cambodian government issued a law stating all the
casinos in Phnom Penhhad tobe relocated to sites at least 200 kilometres
away from the capital—it is rumoured this was because the Japanese,
concerned about the proliferation of gambling in a poor country, refused
to continue their aid programme to Cambodia unless this was done. An
exceptionwasmade,however, for theNagaCasino.Theowners, it has been
alleged, are verywell connected ingovernment andmilitary circles,but the
operationhas not escaped the attentionof international drugenforcement
agencies,which in internal reportshavementioned thecasinoasacentre for
the launderingofdrugmoney.
At least13othercasinosoperateaway from thecapital,mainlyalong theThai
border,andcatermainly toThai clientele.Thecasinosstandout incontrast to
the squalorof their countryside surroundings.
InSeptember 2005,MacaucasinooperatorGreekMythologyEntertainment
Group scrapped itsplan tobuildaCambodiancasino resort inPoipeton the
Thaiborderon fears thatThailand’s imminentplan to legalizecasinogaming
woulddrain theprojectofThai customers.
Taiwan
Taiwan has been considering developing offshore casinos on its Penghu
islands for a while. The casinos would naturally target mainland Chinese
gamblers, thoughmainlanderswouldhave tocomeviaeitherHongKongor
Macaudue to thebanondirect air linksbetweenTaiwanandChina.
The Taiwan press periodically reports on the resumption of deliberations
on bringing casinos to Penghu, and each subsequent report receives less
attention. Yet a source we are not at liberty to divulge leads Inside Asian
Gaming tobelieve that Penghu could sprout casinos in the not toodistant
future.
Japan
Inside AsianGaming ventured to Japan to report on the country’s biggest
industry andquasi-national pastime, pachinko,which is basically gambling,
butbecause it isn’trecognisedasgamblingby law,isdominatedbyorganised
crimeandcorruptpolice.
A full reporton themoves towards legalizingcasinogaming in Japanbegins
onpage22.
Legalization would permit proper regulation, which can help eliminate
the influence of organised crime. “The Atlantic City model is probably the
clearest example of that,where they regulate everybody, from suppliers to
employees to operators,” says Mr. Green. Organised Crime had previously
been infiltrating Atlantic City’s casinos through supply, “charging excessive
prices for supplying casinoswithfish, for example, and that sort of stuff.”Mr.
Green adds:“InAtlanticCity, toget a casino license, youneed togo through
a higher standard of security clearance than you need to work for the US
government ina security-clearedposition.”
Malaysia
Genting inMalaysia“justkeepsgrowing.Itwouldbeveryclose to thebiggest
integrated casino resort facility there is, though the casino itself isnot asbig
asFoxwood’s inMassachusetts,”saysMr.Green.
Macau’s16.7million total visitors in2004pales incomparison toGenting’s23
millionvisitorsayear, though thatfigure includespeopleday-trippingoutof
Kuala Lumpur.Still,Gentinghas been around sincebeforegaming inMacau
started takingoff,andassuch,posesno threat toMacau.Genting isnot trying
toattract the junketmarket,but rather,a tourist/localmarket.
Genting International iscurrentlybidding for a license tobuildan integrated
resort in Singapore, and is the only casino that is likely to be allowed to
operate inMalaysia“whilecurrentgovernment is inpower. It’sbeen inpower
since the60s.”
The Philippines
ThePhilippineshasambitiousplanstodevelopthecountry’sgaming industry,
includingavisionofa themeparkbuiltona reclaimed250-hectaresitealong
Manila Bay, which is hoped will attract US$15 billion worth of investment
within ten years. Thus far, no one has put up the US$1 billion investment
needed to jump-start theproject.
Mr. Green gives a possible explanation:“To get investors who have got the
clout todo it,you’re really talkingaboutAmerican,Australian,maybeacouple
of other places. If they’re faced with a choice between unstable political
environments riddled with corruption and stable governments, where do
you reckon they’ll go?”
Mr.Greencontinues:“Itwas recognised thatmajorgroupswhichhad licenses
in theUSwill only come intoanenvironmentwhichhas a reasonably strong
regulatory framework. They can’t afford not to, because if they conduct
themselves inamanner that’sobjectionable to theNevada regulators,they’d
beunderpressure [andcouldpossibly lose their licensesbackhome].”
Gaming in the Philippines is monopolised by the state-owned Philippine
Amusement andGamingCorporation (Pagcor).The trouble is that“Pagcor is
really its own regulator, so the regulatory framework as such is almost non-
existent.”
The last issueof InsideAsianGamingdiscussedhow rather than rushing into
the Philippines, foreign investors seemmore likely to exit a country beset
with corruption and lack of transparency. Pagcor responded to the article,
writingusa letterwhichappearsonpage6.
Indonesia
While there isprobablya substantial illegal casinobusiness in Indonesia, the
onlyofficial casinosareon theBataan island,though their revenuesarepretty
much inconsequential.“As aMuslim country,”Mr.Green feels the industry in
Indonesia is“unlikely togo further.”
India
APortugese colonyuntil 1961,Goa is theonly state in Indiawhich currently
has casinos,witha total of six, including thecasinocruise shipCaravela.
Casinosandgambling remain largely frownedupon in India, though the tide
couldbe turning,andother statesareconsidering introducing legal casinos.
Anethnic-Indianbusinessman fromSouthAfrica isbuildinga1billion rupee
(US$22.6million) casino in the north-eastern state of Sikkim alongwith his
partner,cricket legendKapilDev.The25hectareproperty,scheduled toopen
soon,will include a 400-room, five-star hotel and casino, golf course, theme
parkandmuseum.
Featuring vistas of snow-cappedmountains, Sikkim lies on the border with
China,and is thefirst stateafterGoa to issueacasino license.
Mr.Greenpointsout that India is“no threat toMacau,butby the same token,
it’saneconomythat’sperformingprettywell.Youwonderwhether itwouldn’t
haveabighomegrownmarket.”
Nepal
At themoment,many Indians get their gaming kicks inNepal. The country
has sixcasinos,all based infive-starhotels in thecapital,Kathmandu.
Nepal’s first casino opened in 1968, and the country has now prepared a
draft bill to regulate the industry. Clear regulation could bring in foreign
investment,thoughNepal’scasinoswouldsuffer ifmore Indianstates legalize
gaming.
A formerAustraliangaming regulator,DavidGreenheads thegaming
practiceofPricewaterhouseCoopers inMacau,havingoriginallycome
to thecity in2001 toconduct the feasibilitystudyon the liberalisation
of the localgaming industry.Healsoconsults forboth theMacauand
Singaporegovernmentsongaming regulation.
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