New casino laws in Cambodia could change the casino industry in the country, but Malaysian tycoon Chen Lip Keong will attempt to strengthen his monopoly in the country.
Politicians are attempting to clarify regulations surrounding casinos in the country where Keong’s NagaCorp holds a monopoly in capital Phnom Penh. Keong has a monopoly on casinos in the capital until 2035, and he also holds a valid gambling license until 2065.
Keong has been able to leverage the monopoly into a $6 billion company, and NagaCorp was the first casino company listed on the Hong Kong Stock Exchange.
NagaCorp has benefitted for a growth in tourism from other countries including China to Cambodia. In part due to Keong’s success, other casino operators are looking to cash in outside of Cambodia’s capital.
Clarification to nationwide gambling regulations and the growth of tourism in the region make Cambodia an enticing option for smaller casino companies. Dozens of companies now have gambling licenses to operate outside of Phnom Penh.
Casinos outside of Phnom Penh are becoming more popular as they are closer to the border and are often on beaches. The proximity to the border attracts more tourists from neighboring countries.
Keong and NagaCorp receive most of their revenue from foreign tourists coming to Phnom Penh to gamble, so the increased competition could steal customers away from the bustling capital.
Keong and NagaCorp will have to innovate and compete with new players unless they hope to go the way of Macau’s once complete monopoly SJM Holdings, which now just has 15% of Macau’s gambling market.
But, Cambodia seems intent on opening up the market to competition after NagaCorp’s massive success in the nation’s capital.
This article first appeared at breakingviews.com