2006 Casino Revenue Exceeds Budget Target By $500,000

The Finance Ministry collected around $17 million in tax revenue from the casino, lottery, betting and electronic gaming machine industry last year, a ministry official said.

Casino tax revenue alone amount­ed to $13 million, which exceeds the target casino revenue of $12.5 million laid out in the 2006 national budget, Ban­kosal Ming, deputy director of the ministry’s finance industry department, said Friday.

“We collected over the target,” he said.

The Finance Ministry has to date licensed 19 casinos, the majority of which are along the Thai and Vietnamese borders, a senior ministry official said on condition of anonymity Monday. There are currently 11 licensed lottery and betting operations in Phnom Penh, though not all are operational, the official said.

But there is some ambiguity as to how the government determines how much tax each casino must pay.

The Finance Ministry official said the ministry determines the tax bill on a case-by-case basis, looking at factors such as how many tables each casino operates.

Mey Vann said Phnom Penh’s NagaCorp Casino paid the most tax, contributing $2.4 million to the state coffers in 2006. Smaller casinos pay varying levels of taxes based on size, he said, though he could not recall the details.

Bankosal Ming said he expects the gambling industry to contribute $19 million in tax revenue for 2007.

In 2003 and 2005, tax revenue for casinos came to $7.4 million and $9.2 million respectively.

But some have questioned whether the government is making as much as it could from Cambodia’s gambling outlets.

SRP lawmaker Son Chhay said the government should be making no less than $100 million each year from casinos. In reality, he claimed, there are more than 30 casinos operating in the country.

The government “does not have a system of laws in place to get the exact information from casinos on how much they make,” and relies too much on what casinos report on their earnings, Son Chhay said.

Michael Nen, vice president for public affairs of NagaCorp Ltd, said Monday that NagaCorp paid all taxes owed the government in 2006.

“Everything is very transparent,” Nen said, “We are a public company now.”

NagaCorp publicly listed on the Hong Kong stock exchange in late 2006.

In contrast to casinos, which are geared almost exclusively toward foreigners, the lottery, betting and electronic gaming industry caters to ordinary Cambo­dians, Bankosal Ming said.

Among those in operation include football betting shop CamboSix, which has various branches in Phnom Penh and around the country.

The 2006 budget law estimated lottery and betting tax revenue at $653,750.

Mey Vann said it is important to license casinos and lotteries to ensure that the government benefits from the industry.

“If we don’t grant licenses to control them, then the informal lottery and gambling business will re­main,” he said.

Tim Smyth, managing director of Indochina Research, a market research firm, said it is difficult to comment on the government’s revenue figures due to a lack of transparency in the casino industry.

“Without seeing all the license agreements [for each individual casino], it is hard to say whether the number is over, under or in line with what the casinos have made,” he said.

But the level of transparency in the casino industry is ultimately no better or worse than in any other business sector in Cambodia, he added.

 

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