Tickling the dragon’s tail

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The exodus of Chinese immigrants from Cambodia in September is another illustration of how little of Asian gaming is irrespective of China.

 

The regional superpower has been gently leaning on the Southeast Asia online gambling hubs this summer.

In the first sign of progress Cambodia announced a ban and began arresting and deporting hundreds of Chinese involved in a variety of online scams – most of which seem to relate to gambling.

The online sector in Cambodia is a pale shade of grey. Cambodians are not allowed to gamble, but casinos (of which there are now some 170, peppered all along Cambodia’s borders with Vietnam and Thailand) can buy an upgrade to their land-based licence which allows them to operate online studios and target players abroad.

The fee is small, annual, and arbitrary, with no connection to revenues – making it the perfect base from which to tap into the mega markets of Asia, most obviously China, with next to no startup costs.

In courting the online sector however, Cambodia, like the Philippines, has created many of the same problems.

As firms have blossomed, so too has the Chinese diaspora that work in their call centres and gamble at their casinos – often clashing with locals and detering tourism.

Similar tensions over immigration have erupted in the Philippines, where locals have marched in Manilla against the sharp increase of Chinse nationals there.

According to local officials by now more than 110,000 Chinese nationals work in the online gambling sector alone – many of whom are undocumented.

The deportations in Cambodia are a cutout of events in the Philippines in 2017, when Chinese agents together with Philippine immigration, rounded up over 1,000 Chinese workers in the online gambling sector and sent them back home.

Yet Duterte is less likely to accede to Chinese pressure on online gambling now for two reasons: unlike Cambodia they get significant income from POGOs; and as noted by gaming analyst, Ben Lee, Beijing-Phnom Penh relations are not as sensitive as they are with Manilla.

Well aware of Beijing’s need for allies in the US-China trade war – Duterte is happy “to kick back” and threaten to make life difficult on the South China Sea’s issue, Lee told me.

Xi Jinping’s relations with Hun Sen are of a different order entirely, and their interests are more closely aligned.

Cambodia has no claim to disputed islands, yet has on several occasions deliberately blocked consensus among the ten ASEAN nations on the Seas issue.

More recently – according to American intelligence, although disputed by Beijing, Cambodia has invited China to assemble a new naval base on the Gulf of Thailand. The relationship is far more reciprocal.

With Beijing’s backing Hun Sen has been able to achieve a systematic elimination of political opponents, which in turn has enabled him to sanction the often widely unpopular ceding of land to Chinese companies.

Yet even in Cambodia, getting tough on online gambling may be a way to please Beijing, while appearing to take action on unpopular immigration.

Whether it can or will really stop its casinos streaming table and selling feeds to agents elsewhere, remains to be seen.


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