Southeast Asia moves to cool lucrative online gambling industries amid China clampdown

Weeks after China lashed out at the Philippines for encouraging offshore gambling – which it said targets Chinese customers and causes the illegal outflow of hundreds of millions of yuan – the Philippine gaming regulator said on Monday it would stop accepting applications for new online gaming operations at least until the end of the year, to review concerns about the burgeoning sector.

Separately, Chinese state news agency Xinhua said on Sunday that Cambodia’s Prime Minister Hun Sen has ordered a stop to new licences for online gambling operations.

Existing licenses also will not be renewed upon expiry, said the report. The about-turn in gambling policy in these Southeast Asian nations comes as China steps up efforts against what its minister for public security called “the cross-border online gambling problem”.

Online and phone betting in Southeast Asian countries by Chinese punters many miles away has exploded in the last few years, and there are signs that the offshore services are penetrating more deeply into China’s population than expected.

Some online gaming websites offer punters wagers as low as 10 yuan (US$1.45) and have round-the-clock live streams. That makes them easily accessible by lower-income Chinese in rural areas, who do not have the means to go to Macau, the only place in China where casinos are legal, to scratch the gambling itch.

The burgeoning industry has also transformed Southeast Asian countries and the abrupt pullback is likely to hurt their economies.

In the Philippines alone, more than 50 offshore gambling companies had received permits to operate, over a hundred thousand Chinese workers had surged into Manila to staff the industry, and property prices near gaming sites were booming.

Revenue from online gaming operations is projected to reach up to 10 billion pesos (US$191 million) next year, according to the Philippine gaming regulator.

The Xinhua report said Cambodia ordered authorities to stamp out illegal online gambling businesses to uphold social security and public order.
The Philippines’ gaming agency chair, Andrea Domingo, while announcing the pause in new licenses, emphasised that the practice is legal in the country, but that gaming revenue growth may be flat to slow this year due to China’s campaign.