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Cambodia: Donaco has high hopes for upcoming gaming law
Australia-based Donaco, the second largest casino operator in the Kingdom, is optimistic about the upcoming Gaming Law which it says will benefit all players in the industry and strengthen professional standards.
In an interview published by Inside Asian Gaming, Donaco International’s executive director Ben Reichel, said the new legislation will have a positive effect in the development of the industry.
“As a publicly-listed company, we certainly welcome all of the principles in the draft law, which include greater consistency and transparency,” Mr Reichel said.
He said certain articles included in the draft law, like a minimum capital requirement for casinos, will be a great addition to the sector. “It will help tidy up some aspects of the business and also I think tighter regulation of junket operators is positive as well.
“We are looking forward to the law and we’re happy to work with whatever the final shape of the legislation is,” he added.
Donaco is listed on the Australia Securities Exchange (ASX), and owns a casino in Poipet city in Banteay Meanchey province, near the Thai border.
When asked about the main challenges that come with operating in a largely unregulated market, Mr Reichel said, “It is certainly a challenge for our investors and even for our auditors. It was necessary for them to get their heads around how the industry operates here.
“We operate in Poipet which is a very strong Thai-facing market, so there is a critical mass of visitors that come there every day,” he said.
“Our competitors there are not listed and although some of them are very professional, others are more on the cowboy-end, quite frankly,” he added.
Ros Phearun, deputy director of the Department of Financial Industry, told Khmer Times recently that the latest draft of the Gaming Law has already passed through the Ministry of Economy and Finance and the Ministry of Interior, and is currently being reviewed by the Council of Jurists of the Council of Ministers.
Cambodia has more than 100 casinos, some of which are now applying for a license. Most of them are located in Preah Sihanouk province, he added.
Mr Reichel said the law is needed now more than ever, particularly in light of the massive amount of investment pouring into the country’s south from China.
“Sihanoukville is a different kettle of fish because of the Chinese investment that is happening there, and it will be very interesting to see how that market shakes out, because I think it will shake out.”
“You know there will be a rationalisation of the number of casinos there. And, the new decree will be part of that process – that’s why we think it is very positive to have a more professional standard of regulation.
“It makes us more comfortable,” he added.
One of the biggest unanswered questions is the tax rate that will be applied to players in the industry. Speaking on the subject, Mr Phearun avoided a direct answer by saying simply that it will be in line with the tax rate of neighbouring nations. Mr Reichel said he hopes that it will be so.
“I guess the thing everyone talks about is the tax rate. Under the new decree there will be a tax-based gross gaming revenue, but the precise amount has not been finalised yet,” he said, adding that he hopes it will be “reasonable” particularly taking into consideration the current state of development of the sector.
“The fact that junket commissions will be deductible from the taxes is a very sensible move. In Vietnam, where it was also applied, it basically halved the effective tax rate that we have to pay there.
“We do expect that the level of tax we will have to pay will increase a bit, but the benefits that will come with operating in a more professionally regulated industry will outweigh those costs,” added Mr Reichel.
Source: https://www.khmertimeskh.com/50535007/donaco-has-high-hopes-for-upcoming-gaming-law/