GGRAsia – Cambodia low tax regime a competitive edge: advisor

Cambodia low tax regime a competitive edge: advisor

Jun 05, 2024 Newsdesk G2E Asia 2024, Latest News

Low taxation on gross gaming revenue (GGR) gives Cambodia an edge over other regional gaming markets, enabling local gaming operators to offer more incentives to attract players in the lower bracket, said Daniel Li (pictured, centre), an advisor to the Cambodia Commercial Gambling Management Commission.

He made the remarks during a Tuesday panel discussion on emerging markets at the Global Gaming Expo (G2E) Asia 2024, a regional casino trade show and conference in Macau.

“One of the advantages Cambodia has over its neighbours is the low tax on GGR,” he indicated. “We have 4 percent on VIP… and the mass market is 7 percent, compared to Vietnam, which is about 35 percent, and Singapore, which is about 18 percent and 22 percent.”

This low taxation regime allows local gaming operators, particularly NagaCorp Ltd, which holds a casino monopoly in the Cambodian capital Phnom Penh and runs the NagaWorld complex, to attract players via various incentives and rebates.

“It gives them [the Cambodian operators] the margin to find a niche market in which players may not want to go to a different IR [integrated resort] and have fewer incentives or rebates,” Mr Li explained.

“Cambodia still has a market. It may not be able to appeal to big players, but we still have a smaller market, a smaller capital market in terms of gambling capital,” added the advisor.

Remote gambling in the Philippines

The panel also shed light on how remote online gambling has injected new momentum into land-based operations in the Philippines, exemplified by the case of Hotel Stotsenberg and Casino in Clark, located two hours north of the capital Manila.

“When we acquired Hotel Stotsenberg, which was one of the oldest luxury hotels in Clark … it was pretty much in shambles and not really doing well,” stated Evan Spytma (second from right), chief executive of Hotel Stotsenberg Leisure Park and Hotel Corp and Casino Plus.

But the implementation of the Philippine Inland Gaming Operators (PIGO) scheme by the country’s regulator, the Philippine Amusement and Gaming Corp (Pagcor), during the Covid-19 pandemic, helped transform the market dynamics and the fortunes of Hotel Stotsenberg, observed Mr Spytma.

Under new regulation, licensed land-based casinos and IR operators are permitted to offer online gambling exclusively to registered members within the country. Moreover, the games offered must be connected to physical gaming machines or tables at brick-and-mortar casinos, which differentiates it from traditional online gaming that relies on server-based virtual games.

“That was a game changer,” Mr Spytma remarked, adding they have also invested to refurbish Hotel Stotsenberg. “Within a year’s time frame, we were able to go online and become a market leader.”

Addressing the differences between this type of offering and traditional online gaming, he added: “You can see the physical machine, you can compare the screens as you play, and you can… actually watch your play in real time, so you know it is secure and safe.”

He continued: “It’s a camera looking at a physical machine that players can log into remotely, deposit [funds], and play on that physical slot machine from any physical homes around the Philippines. They don’t have to travel to the casino.”

Player loyalty

Mr Spytma also underscored the “huge overlap” between land-based slot players and online slot players in the Philippines. “I would say pretty much all of our land-based [players] also play online,” he indicated.

“You can’t not look at that online market. It’s so lucrative and the masses are all there,” said the CEO.

“We find that a lot of our players come to the property, enjoy it, and then contribute to the game online with us. They’re very loyal players,” he illustrated.

Mr Spytma added: “We just set up events for them all around the Philippines. We don’t need them to come back to our physical IR for us to maintain them as our players.”

Angus Chan (second from left), an associate director of research at brokerage UBS AG, told the audience about the importance of Chinese players for regional gaming jurisdictions, despite the current sluggish macroeconomic conditions in the country.

“China has a lot of challenges, but some of them are cyclical,” he indicated. “At the high end, people seem to be fine… and we’re still seeing good demand.”