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CASINOS

Betting on the Border

On Cambodia's frontier, the Poipet casino enclave has taken just four years to become a major gambling centre. But it could all vanish as quickly as it appeared.

By Bertil Lintner/POIPET, CAMBODIA

On one side of the immigration and customs barrier, there is poverty and chaos. A stream of old motorbikes and battered pick-up trucks negotiates a pot-holed, dusty road, swerving to avoid raggedly dressed farmers pulling wooden carts to market. The only buildings are rundown shophouses and makeshift food stalls.

On the other side: Glitzy, air-conditioned hotels, duty-free shops, massage parlours, an 18-hole golf course, manicured lawns and beer gardens with quick and efficient service. And, above all, casinos.

Two worlds, separated by a wooden barrier. Stranger still, they exist inside just one country, Cambodia. This casino enclave sits on the western edge of the Cambodian border town of Poipet. The area is just a few hundred metres wide and lies between the official Cambodian border crossing and the actual border with Thailand.

It's a perfect arrangement for the mainly Thai gamblers and the casino owners. Casino-gambling is banned in Thailand, so why not build casinos just across the border in Cambodia? But placing them before the Cambodian border checkpoint allows the gamblers to leave Thailand without officially entering the neighbouring country. That means less hassle with visas. It's also a lot easier for the many foreigners--Filipino and Malaysian croupiers, Thai shop assistants and Western casino managers--who are working inside this de facto no-man's land. Who's going to check their Cambodian visas and work permits, not to mention operating licences?

And it's not a small undertaking. There are now eight casinos in Poipet, which makes this otherwise nondescript border town, about four hours' drive from Bangkok, the biggest gambling centre in Asia after Macau in southern China. Their combined income amounts to between 300 million baht and 500 million baht ($7.5 million-12.5 million), according to Western diplomats in the Cambodian capital, Phnom Penh. The casinos feature blackjack, baccarat, roulette and slot machines--but the big bets are done away from the gaming halls in private VIP rooms.

According to a local travel agent, 90% of the gamblers are Thais (indeed, the Thai baht is the only currency accepted inside this Cambodian enclave). "I come here about twice a month," says one Thai man who prefers not to be named. "I've lost lots of money, but one day I'll make a big hit." Other gamblers come from Japan, South Korea and Singapore. Many are just tourists who have bought overland trips from Bangkok to the ancient Cambodian temple complex of Angkor Wat, which often includes a night's stopover at the border casinos. Westerners are few and far between.

Cambodia's first casinos were opened in Phnom Penh in 1994, but in 1998, Prime Minister Hun Sen banned gaming within 200 kilometres of the capital. One casino still survives in Phnom Penh--the Naga Resort--but the others had to close or move. In 1999, the Holiday Poipet Casino was built, 100 metres from the Thai border.

It was an unlikely place for a casino centre. Just down the road is the bridge on the Khlong Leuk canal, which forms the border with Thailand. In May 1975, it became known around the world when a convoy of open lorries brought several hundred foreigners to safety following the Khmer Rouge's takeover in Phnom Penh--events that were later immortalized in the film The Killing Fields. In the 1980s, after they were driven from power, Khmer Rouge guerrillas held out for years in the area around Poipet: The land around here was--and still is in some areas--littered with landmines.

That dramatic past faded into history when the gambling boom began. The Holiday Poipet Casino was soon followed by seven others, with names like the Golden Crown Club, the Star Vegas and the Tropicana Resort. Other border areas in Cambodia have followed suit, most recently Bavet on the Vietnamese border, which is now home to the Le Macau Casino and Hotel.

Most of the money to build these casinos has come from investors in Thailand, but cash has also flowed from Malaysia, Indonesia, Taiwan and China. As Cambodia doesn't have any gaming law or proper registration of the casinos, their ownership is obscure. But some of the owners became publicly known earlier this year in a completely unexpected way.

BORDER CLOSURE

In January, Cambodian mobs stormed and burnt down the Thai embassy and several Thai businesses in Phnom Penh over an alleged insult to their country by a Thai actress. In the wake of the attacks, Bangkok demanded compensation of $50 million. Phnom Penh couldn't afford to pay up, and so turned to two Poipet gambling tycoons called Kok An and Pad Suphapa to help cover the bill. They were keen to see the situation resolved as the anti-Thai riots had led to the closure of the border, cutting off access to their casinos.

But the two Sino-Cambodians are not the only casino owners in Poipet. Opposition politicians and Western diplomats in Phnom Penh claim the casinos are run by the usual triumvirate of politicians, military officers and businessmen, and that they come from both countries. In Poipet, a non-governmental organization worker says land for the casinos was acquired by military interests in a less than proper manner.

"Suddenly, some Cambodian army officers showed up with freshly printed land-title deeds," says the worker, who insisted on anonymity. "The people who lived there had to leave." For weeks afterwards, many of those who had lost their land camped outside the national assembly in Phnom Penh, but to no avail.

There's also concern in Poipet about where the casino money is going--a subject of much speculation. Son Chhay, an opposition politician from the Sam Rainsy Party, says very little of it stays in the area. "There's no real benefit for the country or ordinary citizens from these casinos," he says. "Even people living around the casinos are still dirt poor."

Thais, too, are becoming concerned about the loss of money to border casinos, not just in Cambodia but also in neighbouring parts of Laos and Burma, and a debate has begun on legalizing gambling. In August last year, Thailand's police chief, Gen. Sant Sarutanond, was quoted by the Associated Press as saying, "I strongly support the legalization of casinos because we can save billions of dollars that flow from the country every year." If that happens, Poipet could once again become nothing more than a remote, dusty and rundown border town.

This article first appeared in the Far Eastern Economic Review, December 04, 2003

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