Gambling and the economics of South East Asia

The opening-up of the US online sportsbook market has been as important for UK-based gambling firms as it has for native businesses.

(© Tomasz Zajda – stock.adobe.com)

Due to the advancement of smartphone technology and 4G internet speed, traditional gambling has evolved and become easily accessible online. For example, a well-known gambling website in Thailand looks like this เว็บพนัน. There is no longer restriction of access as anyone could place a wager anywhere using either a mobile phone inside a commute or a desktop PC inside an office.

Background of Gambling in South East Asia

Nonetheless, gambling is historically heavily regulated and almost banned entirely in most South East Asia countries. Quote for example, in Thailand the only legal gambling options for the locals are horse racing and lottery provided by the Thai Government; in Singapore, aside from Marina Bay Sands Casino, the other legal means are buying lottery through the state-owned Singapore pools, and the only legal gambling websites are Singapore Pools and Singapore Turf Club; in Malaysia only licensed lottery shops and Genting Casino are allowed; meanwhile all forms of gambling are prohibited in Indonesia, even a state lottery operated by the government was shut down in the past due to protest by the Muslim community.

Nonetheless the dilemma arises when third world countries with less abundance of natural resources could only utilize the gambling industries to generate income and job opportunities. This is the reason gambling scenes are highly prevalent in countries such as Cambodia and Philippines. The gambling facilities are strictly prohibited from the locals, but are simultaneously heavily promoted to the foreign tourists and offshore foreigners especially the Chinese. Casino services such as web development companies, data centers, customer service centers that both employ the locals and the Chinese staff are dotted everywhere.

Gambling in the Philippines

As one of the fastest-growing countries for casino hubs in Asia, government taxes earned from gambling are also on the rise. Revenues from online and traditional casinos are projected to be above $4.1 billion in 2019, a significant rise from about $1 billion in 2016.

The government has launched two initiatives to supervise the legal gambling scenes of the Philippines: Philippine Amusement and Gaming Corporation (PAGCOR) which both runs a few individual casinos as well as regulate privately owned casino operators; and Philippine Offshore Gaming Operators (POGO), supplies a diverse online gambling services to foreign customers but are restricted from the locals. The foreign customers are in particular from Mainland China as gambling activities are strictly prohibited there. Registered POGOs target Chinese customers and employ Chinese staff. “In June 2019, there were 56 licensed POGOs and an estimated workforce of over 100,000 Chinese citizens in Manila working in this sector” (source: wikipedia).

With more than twenty casinos located in Metro Manila, casino gambling cum resorts are one of the main tourist attractions and does not look like ready to stop any time soon.

Gambling in the Cambodia

The Prime Minister of Cambodia Hun Sen used to the biggest proponent of turning Cambodia into regional casino hub, the South East Asia Macau. Cambodia was considered the second largest online gambling source among South East Asia countries after the Philippines. However, due to the political pressure from China, urging the local government to stop targeting her citizens, Cambodia Prime Minister had since announced the ban of online gambling (source: Reuters).

The announcement had seen halt of many casino operations. Sihanoukville has been majorly affected by the ban: operating casinos were reduce by half from more than 70 to 36 remaining. However, undetermined land-based casinos are still functional to date. Online casino services are also expected to be remain operating across the country.

Illegal Online Gambling Prevails?

Even though governments across South East Asia are unanimously forbidding their own citizens from gambling activities, illegal online gambling activities are hard to crack down with offshore hosting and VPN services. Most ASEAN countries aside from Cambodia and Philippines have the locals forming the customer base of online gambling. Below are the populations of ASEAN countries in 2020:

Malaysia and Indonesia are guided by Islam doctrines that forbid gambling as Muslims are the majority in these countries, unlicensed online gambling providers are still rampant and saturated the market. Several sources have stated that an average Indonesian online casino provider could earn an estimated $250 million a month.

Online gambling websites had since created many job opportunities in the market as they require significant manual labor of customer service operators, web programmers and digital marketers. On average, customer service operators could earn at least $500 – $600 a month which is considerably higher than working inside factories. Outsourcing of web development and digital marketing also generates revenues for the local companies.

On one side of the coin, online gambling introduces many economic benefits like inflow of foreign currencies, creation of job opportunities and projects for local companies. Even land-based casinos are good for local tourism and businesses of restaurants, hotels, bars and shops. On the other side of the coin, gambling fosters social illnesses such as divorces, theft, robbery, kidnapping, illegal money lending, money laundering and human trafficking.

It is naive to think gambling could be eradicated completely. Perhaps the best approach to gambling is to legalize it. If governments could legalize gambling, they will be able to monitor and control the social issues that come along with it. For example, the legalization of prostitution in Singapore, prostitutes are required to go through monthly medical check ups.

A political leader from Thai Civilised Party Mongkolkit Suksintharanon has proposed to legalize both land-based and online gambling. He has projected legalizing online gambling will earn the Thai Government about 5-6 billion a year.

Story by John Michelson


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