Last month, Cambodia Prime Minister Hun Sen announced he was banning online gambling, saying that the industry had been used by foreign criminals to extort money. According to a report in today's Khmer Times in Cambodia, the "inflow of both capital and visitors from China will take a hit in the coming months" as a result. However, in the long term it may be a good thing.

From the article:

Local sources are reporting that many gaming venues have already shut their doors for good and thousands of Chinese expats have left Sihanoukville. Just a week after the August 18 decision, the Ministry of the Interior deported 150 Chinese nationals in relation to an online gambling scam operating out of Sihanoukville and Bavet.

According to Chinese state media agency Xinhua, the scheme had netted around US$14 million.

Insiders in Sihanoukville have said that room rates at hotels and guesthouses in the area have declined since last month.

Nuon Rithy, chairman and CEO of the Khmer Appraisal Foundation, said that Chinese expats leaving Sihanoukville are workers or visiting gamblers, not investors. This, in turn, has caused a drop in the demand for accommodation, food and other services.

Rithy claimed that other areas of investment in the country, such as real estate, construction, tourism and textiles are stronger than ever.

“The decision to stop the issuance of gambling license is a good strategy to filter good investors … which will bring benefit to Cambodia’s economy in the long run,” he said.

“I strongly believe that the decision will provide long-term benefits and Sihanoukville province will become the best destination for tourism and trade in the near future.”
However, he added that it is just a short-term effect, and long-term gains will continue.

Plots in Sihanoukville which were being sold for just $200 per square metre three years ago have routinely been selling for around $3,000 per square metre.

“Over the long term, this decision will provide big advantages for Cambodia’s macro-economy.” Heang said.
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