In just a few short years gambling has become the “next big thing” throughout Southeast Asia. Casinos are sprouting up everywhere drawing a record number of tourists, generating sizeable sums for national treasuries, and reshaping the economic profile of host communities. Unfortunately, casinos have also created a slew of social problems that governments are only now beginning to confront.
Recently, Singapore and Vietnam amended their casino laws to reflect the reality that gambling has been legal and even encouraged for many years in supposedly conservative societies. In the case of Singapore, it wanted tighter regulations on the casino industry to discourage low-income groups and the unemployed from participating. On the other hand, a proposal was submitted to Vietnam’s National Assembly Standing Committee that requires investors to declare registered capital of at least U.S. $4 billion and a minimum experience of 10 years in the business before a casino license is issued to them.
Suprisingly, Singapore has emerged as Macau’s closest competitor as the preferred place to gambling in the region, despite opening its first casino only two years ago. Casino profits are soaring but the drawback is that many local residents are burdened with gambling debts. As concern over this problem has grown, Singapore has intervened to thwart it. The government already prohibits “financial vulnerable” individuals from entering casinos, with about 43,000 Singaporeans reportedly falling in this category. More strident measures are still being considered.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Singapore could perhaps look to Vietnam for a model, as the latter country has banned all locals from gambling in the casinos. Currently, Singapore collects levies from local residents if they wish to play in the casinos but this has failed to discourage the local population, including the poor, from playing in the casino centers.
Meanwhile, Vietnam’s decision to impose stringent requirements for casino operators was naturally opposed by prospective investors who wanted to establish more gaming centers in the country. The business sector in fact has reminded the government that the new rules might hurt the tourism and gaming sectors. But the revised regulation could also indicate that the government is confident that Vietnam can continue to maintain its competitiveness in attracting more casino investments.
Indeed, Vietnam’s casino industry has been a bright spot in the local economy. It has thriving casino cities which contribute much-needed dollar revenues to the local coffers and steady employment to local residents. It’s only other rival in the Indochina Peninsula is Cambodia which has at least 25 casino gaming complexes, although the frequent opening and closings of casinos in the country makes the number difficult to pinpoint.
Vietnamese and Cambodian casinos are popular because they are officially banned in Thailand and China which share land borders with both Vietnam and Cambodia. It’s no accident that casino centers in Vietnam and Cambodia are established in territories that are accessible to gamers in Thailand and China. Why fly to Macau or Las Vegas if casinos are already within reach near the border?
Cambodia’s main market is the Chinese who come ready to spend a sinful amount of money in casino centers. Even the Chinese government is encouraging its citizens to play in Cambodia’s casinos, many of which are owned or operated by Chinese nationals. Last year, Cambodia earned more than $20 million from casino taxes.
Tourism is one of the leading drivers of economic growth in Southeast Asia. The rise of casino centers means that the region is aiming to reposition itself as a gaming and gambling hub and attract cash-rich tourists. Even the Philippine government has a plan to redevelop a coastal property in Manila and transform it into a global casino complex. Southeast Asia plus Macau could soon become the largest Las Vegas paradise in the world.
It’s interesting to monitor if Thailand and Indonesia will continue to outlaw gambling despite the existence of booming underground gambling markets in both countries. Already academics and other influential persons are making the case for legalization.
Casino economics could easily improve the tax numbers of Southeast Asian countries. But governments must think twice before prioritizing casino investments because they might not be prepared to handle the various social ills that can arise from gambling. It’s important to note that several Southeast Asian countries became economic tigers without legalizing gambling. But the success of Singapore’s casino experiment and the fast-developing casino industries in Cambodia and Vietnam could change how policymakers from other countries in the region view gambling and its potential in stimulating local economic growth.