LAST WORD 62
Is Asia falling behind Sharon Singleton
Managing Editor, AGB
in the regulation race?
Asia’s gambling industry continues to power ahead, in most cases leaving regulators scrambling to keep up, creating an additional layer of risk for investors.
W
hile Singapore and Macau stand out to focus on its role as regulator, due to the evident conflict as models in the region, many of the of interest. PAGCOR has so far resisted, though it now emerging jurisdictions still need to appears the Department of Finance is prepared to take make considerable progress when it another look at the issue. The industry has argued that the casinos are tired comes to their gaming regulation. Cambodia for example, which is the fastest-growing and need a revamp, which needs to come from private jurisdiction in the region, with more than 136 casino capital. Once brought up to standard they will generate licenses issued, has once again delayed its legislation. significantly more revenue, which ultimately would Already more than a decade in the making, it’s now benefit the government. The Philippines is also grappling with its online expected to be published sometime early next year. In the meantime, casinos have proliferated, with the industry. So far, it has resisted Beijing’s calls for an town of Sihanoukville now overrun with Chinese-built outright ban, though the clock may be ticking if it doesn’t succeed in bringing its Philippine Offshore palaces, with little to no oversight. The town has unfortunately earned the reputation Operators (POGOs) under tighter control. The country’s main trade union has suggested creating of being the wild west of gambling in Asia, with rising a regulatory oversight body that crime including money laundering, would encompass the various kidnapping and loansharking. agencies currently attempting to Phnom Penh has said enough is enough, banning the online gambling There is no one knock the POGOs into shape, to avoid issues falling into the cracks that has fuelled much of the boom. body responsible between various ministries. However, to ensure the success of its for casino Other problems have emerged gaming industry it needs to get its when it comes to arbitrating regulatory house in order and fast. regulation, with business disputes. Recent cases have Vietnam has already published various ministries highlighted that even outside of rules to cover its casinos, which gaming regulation, many countries have been widely welcomed by the ranging from in the region due not have the legal industry. But even so, gaps remain, finance to defence infrastructure necessary to ensure with operators seeking clarity from cases can be fairly settled in court. the government. all weighing in. Donaco International for example And there, things can get has found itself in arbitration in complicated. There is no one body Singapore over a dispute with the responsible for casino regulation, with various ministries ranging from finance to defence former Thai owners of its Star Vegas casino in Cambodia, over their breach of a non-compete clause. The Thais all weighing in. The Ministry of Finance is seen as being pragmatic and have since ramped up their feud by cancelling the lease willing to listen and take on board the views of investors on the land the property sits on. Silver Heritage had the in the industry. For example, there has been a proposal rug pulled out from under its Phoenix Club property in to allow the inclusion of infrastructure projects into the Vietnam after table games were excluded from a revised $2 billion initial investment needed for a casino license. investment certificate. Although it’s easy to knock issues with regulation in This came due to concern the figure sets too high a bar for a project in Vietnam and would deter foreign investors. Asia, many who follow the industry closely agree that on However, that idea has run into opposition from other the whole things are moving in the right direction. In terms of the spirit of the law, governments are keen to see sectors of the government, including defense. This input from multiple stakeholders creates that their gaming industries have the necessary oversight. While Japan plans to emulate Singapore’s model in confusion and slows the pace of change. In the Philippines, regulation is also a work in shaping its IR industry and will likely get things right progress. There have long been calls for the Philippine from the get go, many other emerging jurisdictions will Amusement and Gaming Corp. to sell off its own casinos have a slower evolution though will get there in the end.
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Asia Gaming Briefings | October 2019
