More news reaches AGI on the events surrounding the collapse of Phnom Penh’s slot club market.
Arguably the market was always living on borrowed time, given that it turns out now that its core constituency—local people—had no right to be using the clubs in the first place.
Cambodia apparently already had legislation on the books barring its own nationals from playing in the venues. The law was though (to paraphrase William Shakespeare) honoured more in the breach than the observance.
This technicality appears to have escaped even the due diligence procedures of one or two overseas investors—given the famous opacity of Cambodia’s administrative systems, that is perhaps understandable. In any case, during a period of unprecedented global economic growth, capital tends to be sloshing around, desperate to flow into markets that at other times might be considered marginal at best.
There’s tiny problem with a society such as Cambodia which appears to rely on strong men to set the rules rather than a consistent legal framework. When a strong man leaves the stage (whether via the ballot box, at gunpoint, via an accident or through natural causes) the existing policy often tends to wither at the same time. That’s exactly what seems to have happened here.
When the capital’s police chief Hok Lundy died in a helicopter accident in November it set off a chain of events leading ultimately to the implosion of the slot club scene.
Mr Lundy appears to have been by any measure you care to use a ‘strong man’. One of the duties he apparently took on was to make personal visits to some of the capital’s gambling operations in order to collect money. According to AGI‘s sources he would then distribute this among his officers. When he died, the money stopped, allegedly leaving a lot of very unhappy police officers who proceeded to get busy ‘taxing’ the local populace with various and often arbitrary on the spot fines. This in turn got the locals restless and quickly came to the attention of the government and the country’s prime minister, Hun Sen.
The capital’s new police chief then reportedly decided to show his hand by declaring he would enforce the moribund law barring locals from the slot clubs.
But there was a problem. Other ‘strong men’ with political connections apparently decided they wished to continue business as usual with their personal slot club operations. Such a potential loss of face and authority for the PM could not of course be allowed to go unchallenged—especially in a country that is no stranger to internal strife.
AGI understands that as a result the Cambodian equivalent of the US Navy Seals or the British SAS were called out to take over and shut down the remaining slot clubs operated by the strong men.
Poor old Cambo Six, the country’s main sports bookmaker, appears to have been caught in the metaphorical cross fire, as it too was closed down. This seems to have come as a particular shock to its management, as the company was under the impression it had a government licence valid until 31st January 2011. However according to the English language newspaper The Phnom Penh Post, the country’s Minister of Finance Keat Chhon said the government would, quote: “be free of criticism because it had agreed to cancel a licence, not a contract”. That’s an interesting and arguably, by international standards, unorthodox definition of what constitutes a contract.
An interesting question is what prompted this newfound government interest in ‘protecting’ the good citizens of Phnom Penh from gambling. AGI is not suggesting that foreign investors in the clubs were in any way complicit with law breaking, tax evasion or slush fund payments under the previous dispensation. Could the new found regulatory zeal of the government be in any way related though to the claim that one or two slot clubs operated by local strong men were providing those same strong men with a ready made slush fund for pay offs, influence peddling and political campaigning?
Watch this space for more news.
