Cambodian casinos out of luck as revenues take a hit

Written by Kay Kimsong

Tuesday, 20 January 2009 Phnom Penh Post

Local casino operators report fewer gamblers on both the Thai and Vietnamese borders, with across-the-board cost cuts planned for this year. Photo by: Tracey Shelton A casino building at the Poipet border crossing. Gambling is down at both the Vietnamese and Thai border casinos. THE global economic crisis has hit Cambodia's gaming industry, with casinos on the Vietnamese and Thai borders announcing hefty cost cuts. The local downturn comes amidst a global gambling slowdown affecting casinos worldwide - Macau's gaming industry posted a US$300 million drop in revenues in the last three months of 2008, while US gambling hotspot Nevada reported a 65 percent plunge in takings last year. Cambodia is particularly susceptible: With about 30 casinos, it has more gambling venues than any country in Southeast Asia. Traffic at the Thai border is down sharply with casinos taking a triple hit from the global economic crisis, recent border tensions and a falling Thai baht. At the Kings Crown Casino and Hotel - with locations in Cambodia on both the Thai and Vietnamese borders - the number of visitors has dropped sharply, leading to losses of $620,000 in the last quarter of 2008, the company said. The company says it is cutting the work week for its more than 2,000 employees, a move designed to trim costs, said Cambodian Peoples' Party Senator and casino owner Phu Kok An. He told the Post that his company was negotiating with employees to reduce their working month from 30 to 15 days. "We are not laying off workers but they will get 15 days' salary. If your salary is $200 per month, you will get $100." The company currently spends $300,000 a month on salaries, he added. The casino has outlets in Poipet on the Thai border and Chrey Thom district, Kandal province, close to Vietnam. "We are not earning enough income to spend on staffing, water and electricity. When people earn less money, they gamble less," Phu Kok An said. He said that the number of gamblers fell sharply but that the business would remain open. we are not earning enough income to spend on staffing, water and electricity. "We earned some profit in early 2008 but made losses over three months [in September, November and December 2008], we employ a lot of workers - we are overstaffed - and we're overspending," he said. But Vann Sitha, vice president of New World Casino-Hotel in Bavet on the Vietnam border, said his company does not plan to lay off any of its 700 employees or reduce working hours. Although some staff had resigned, it would continue to recruit, he added. "Our casino management has never laid off staff, but some like to move from job to job seeking a better salary offer," he said, adding his business had been less affected by recent events given its location on the Vietnamese border as opposed to the troubled Thai side. Phat Bun Hour, assistant to Koh Kong Casino owner Ly Yong Phat, also a CPP Senator, declined to comment. Chea Peng Chheang, secretary of state at the Ministry of Finance, is calculating the casino industry's total revenue for 2008, which he said will be completed this week. Revenues are expected to be lower than the $10 million generated in 2007.