Four months after Chinese nationals left Sihanoukville en masse fearing a crackdown on online casino operations, the coastal city’s business community is still feeling the impact, with local hotel and casino owners claiming the losses continue to rack up.

Rattanak Sambath, owner of the Royal Union Hotel and Casino, said yesterday that his hotel’s occupancy rate plummeted and remains low after thousands of Chinese expats high-tailed it out of the city in early November.

“After the Chinese left, our business went down a lot, maybe 60 to 80 per cent,” he said. “We’ve faced losses, though we’re still running.”

On October 31, Cambodian immigration police working with Chinese Interpol agents raided a villa and guesthouse in Sihanoukville, arresting 168 Chinese nationals accused of operating a transnational telecom extortion scheme.

Many of those arrested in the raids were working in casinos in the city, which fuelled rumours that the arrests were aimed at shutting down the overseas gaming halls and online casinos that Chinese nationals frequent to circumvent China’s ban on gambling.

Roughly 79 of those arrested in the raid were employed in Sambath’s casino – though they were accused of crimes that occurred off the premises. News of their arrest panicked the other Chinese staff at the casino, and at other gaming operations across the city, driving workers and investors to seek safer havens.

Cambodian law permits online casinos to operate out of licensed brick-and-mortar casinos. The number of these internet-based operations in Sihanoukville has mushroomed in recent years on a surge in Chinese-backed investments, bringing with them a pool of Chinese labour. Live-dealer online casinos often employ Chinese nationals to interact with gamblers in China via webcam.

By Sambath’s count, more than 90 per cent of the estimated 5,000 Chinese living in Sihanoukville at the time of the raid fled the city in the week following the arrests.

Many are now working in the Philippines, where casino laws are more transparent and relaxed, he said.

While the expected grand sweep of Chinese casino workers in the coastal city never materialised, Sambath said convincing those who fled to return has proven difficult.

He said Cambodian authorities have given no assurances that online gambling is legal here.

“We’re still trying to attract Chinese online casino investors to come,” he said. “They will only come back if the government advertises that it allows online casinos.”

Ros Phirun, spokesman for the Ministry of Economy and Finance’s gaming and casino department, said it is not his ministry’s job to promote investment in online casinos, especially as it is a bit of grey area.

“This industry is very new for us, and we, the regulators, do not know about it well yet,” he said. “We try to regulate it [the best we can].”

Aharon Gini, general manager of the Israeli-owned Queenco Hotel and Casino, said his company was finalising a $1 million contract with a group of Chinese investors when the October 31 raid occurred.

The investors – who planned to rent out the hotel to operate an online casino – promptly hopped on a plane, and the deal went cold, he said.

“[Chinese online gaming] companies came to Cambodia to develop their business because here they can have a legal licence to operate a casino,” he said.

“But in the last incident, some Chinese were arrested – we don’t exactly know why – and the whole industry got scared and left.”

He voiced optimism that the Chinese investor group would return next month, though he feared Sihanoukville was still feeling the effect of the Chinese exodus.

Instead of seven to 10 per cent projected annual tourism growth, the coastal city has lost up to a quarter of its tourism traffic, he claims.

He attributed the loss to Chinese nationals leaving the city, as well as the failure of local authorities to improve the city’s tourism infrastructure.

Nou Sophal, director of Preah Sihanouk province’s tourism department, disputed these claims, insisting the city’s hotels and casinos have not reported any significant losses.

“Everything is running smoothly,” he assured.

Additional reporting by Cheng Sokhorng