The balance between economic development and environment weighs heavily on officials in Sihanoukville
Cambodia bets on a new gambling image
Sihanoukville, a once sleepy seaside village, was transformed over the past decade into a hotspot for high-end development, with beach resorts, luxury island retreats, five-star hotels, and flashing neon-lit casinos, attracting over a million visitors each year. Yet, this Cambodia “paradise” has long grappled with issues tied to Chinese investments, particularly in casinos, along with trafficking, and internet crime syndicates, that has fueled an undercurrent of trouble.
The rapid unchecked development has come at a cost to the locals and changed the city’s character. The surge in casinos, numbering now around 80, led to a steep increase in real estate prices, displacing many local residents and creating a stark divide between wealthy Chinese newcomers and the local community. The quick rise in population also strained local infrastructure, leaving parts of the city congested, overburdened and added significant pollution in the area in the water and on land.
While some exclaim about the economic boom; a darker side emerged as the city became a magnet for organized crime. Reports of money laundering, extortion, human trafficking, and drug-related offenses became common, with some casinos allegedly serving as fronts for illicit activities. Human trafficking, in particular, became a significant issue, with reports of workers being trafficked or coerced into illegal work in casinos and online gambling dens. This rise in crime has also placed enormous pressure on local law enforcement, raising concerns about safety and corruption within the city.
The development of Sihanoukville remains controversial, sparking debates about the balance between economic growth and the environment. While the casinos have undoubtedly brought investment and jobs, they have also exposed the city to vulnerabilities that many argue undermine its long-term stability and prosperity. The Cambodian government has since made efforts to regulate the industry, including shutting down illegal online gambling operations, but the legacy of these issues continues to shape the city.
While no one denies that Cambodia’s rapid and sustained growth has led to reduced poverty and shared prosperity, the government’s laissez-faire regulatory environment has also been responsible for transforming Sihanoukville into a prime hub for scam operations and human trafficking. Speculative real estate investments, including casinos and hotels left vacant by the COVID-19 pandemic, have been repurposed for fraudulent activities masquerading as legitimate online gambling. Closely tied to the gambling sector, Cambodia has emerged as a major source, transit, and destination for human trafficking victims, ranking second in the region for organized crime according to a CSIS report.
As the location of Cambodia’s only deep-water port, a crucial link in President Xi Jinping’s Belt and Road Initiative, this city has become a magnet for Chinese investment. Large-scale, Chinese-led construction projects dominate nearly every part of the city, while its main streets are now lined with predominantly Chinese businesses and restaurants. Cambodia’s lax financial policies attracted scores of Chinese investors, who opened up the boom in casino operations. Think Tank China reveals that of the $1.3 Billion in foreign direct investment (FDI) from 2016 to March 2018, $1.1 billion was from China.
Last year’s release of the Chinese feature film, “No More Bets” did not go unnoticed by senior Cambodian officials since it offers a scathing portrait of a Chinese programmer and a model who are enticed by the promise of high paying jobs but who end up trapped in a country as prisoners of an online scam mill. This fictional image resonates far too close to reality.
What is a clear and present danger is that the dramatic flood of Chinese investment in Sihanoukville has resulted in the establishment of casinos, power plants, offshore oil platforms, unregulated dredging, deforestation, and the dumping of pollution from factories and construction sites directly into the sea.
No one is betting against the house, but the future of gambling in Sihanoukville needs to shift towards a regulated, tourism-focused model that prioritizes sustainable development and broader economic diversification beyond casinos.
Recommended reading:
“Cambodia Urged to Repair Sihanoukville Scam Image” CamNess October 24, 2024
“No Cambodia left: how Chinese money is changing Sihanoukville” The Guardian July 31, 2018
“Sihanoukville Struggles to Shake Its Seedy Image” The Cambodia Daily August 11, 2014
“Cutting Losses: Southeast Asia’s Crackdown on Online Gambling” Center for Strategic & International Studies (CSIS) July 25, 2024
“Opinion: Sihanoukville’s Recovery and Tax Incentives-Treating the Disease and Not the Patient” Cambodia Investment Review June H1 2024