A verdict handed down by a Shanghai court against Australian casino giant Crown Resorts Ltd last week, which saw prison sentences doled out to 19 of the company’s current and former casino employees for promoting junkets for Mainland Chinese gamblers to Australian casinos, has rattled the Asian gaming industry and created concern over the grey area in which many Cambodian casinos operate.

Lorien Pilling, director of UK-based Global Betting and Gaming Consultants (GBGC), said the court ruling is the broadest enforcement to date of a national law that makes it illegal to promote gambling on the mainland. He said any casino operator that relies on junkets from China should be rightly concerned, though he did not expect that the crackdown would target Cambodia’s relatively small market.

“The conviction of the casino employees is certainly a signal that should be heeded by casino operators,” he said.

Pilling explained that Beijing has waged a campaign against corruption for several years now, which has placed Macau – the world’s largest gaming centre and the only Chinese territory where casinos are allowed to operate – on unsure footing. In response, junket operators have promoted trips for VIP Chinese gamblers to casinos further afield deemed beyond the reach of Beijing authorities.

“In some respects the court case is simply an extension of what has been taking place in Macau over the last few years,” he said. “But the action against Crown Resorts’ employees seems to be a widening of that campaign to casinos outside Macau.”

He said the ruling against Crown Resorts was more likely the result of China’s policy of capital controls than its desire to stop its citizens from visiting foreign casinos.

“Indeed, China’s capital controls are partly the reason why junkets are so important to the casino sector in Southeast Asia, because they extend cross-border credit,” he said.

According to Pilling, the crackdown is primarily targeting the high-end VIP market and could miss NagaWorld, Cambodia’s biggest casino, which has previously acknowledged that it does not operate junkets at the same level as other Asian destinations.

“Those markets and individual casinos that attract lower level Chinese players, either through travel junkets or directly, are likely to see less impact than those that rely on the ‘whale’ VIPs,” he said.

A Hong Kong-based gaming analyst also played down the potential impact on Cambodia, noting that the Kingdom appears to have secured preferential treatment when it comes to gaming activities due to its close strategic and economic ties with China.

“We view Cambodia as being very friendly with Beijing – much more so than any of its neighbours – and it is likely going to continue to enjoy the prosperity associated with investments from China, including an influx of Chinese visitors that will patronise casinos,” the analyst said, speaking on condition of anonymity.

Cambodia’s government also appears confident in the Kingdom’s future as a destination for high rollers from mainland China. The Ministry of Tourism recently inked an agreement with Naga Travel, a subsidiary of NagaWorld’s parent company, to pilot its Cambodian Overseas Tourism Promotion Board (COTPB), which aims to draw 2 million Chinese visitors annually by 2020.

Ros Phirun, deputy director of the Finance Industry Department at the Ministry of Economy and Finance (MEF), said yesterday that Chinese authorities have not raised any concerns over the junket operations of Cambodian casinos.

“We haven’t had any negative feedback from China and don’t expect to see much,” he said, adding that the growth of online gambling was diminishing the necessity of junket trips.

“While casinos need players to survive, landed casinos don’t actually need to rely on junket operators because they are legally allowed to set up online gaming websites,” he added.

Jonny Ferrari, general manager of online gaming site FerrariGaming.com, said the crackdown in Macau has directly benefitted Cambodia, even if junket promotions fall into a legal grey zone.

“Junkets will look to come to Cambodia as long as regulations are not established [against them],” he said. “China is a grey area for all activity, and Cambodia’s number one casino consumer is China.”

While he called China’s efforts to stop its citizens from gambling overseas “futile” and “serving no benefit”, he doubted that there would ever be a material impact on Cambodian casinos given the way regulations are loosely enforced here.

“Cambodia is corrupt and everything and everyone can be bought in gaming,” he said. “There will never be a problem with the local government here and junkets.”