Laos Buckles to Chinese Pressure over its Booming Casinos
A senior Thai official has accused Laos of bowing to pressure from China by allowing casinos in the country but authorities in Vientiane say the gambling venues bring in much-needed revenue to the resource-starved state which ranks among the poorest countries in Southeast Asia.
Laos’s casino boom has been fed by mostly investors from giant ally China who have pressured the authorities into approving the gambling establishments, the official who handles commercial affairs in northern Thailand told the News, speaking on condition of anonymity.
Many Lao officials are actually unwilling to approve the gambling dens, but when powerful foreign businesses, especially those from China, forced their hand, Lao authorities “couldn’t do anything,” he said.
The Lao government itself would not like to have casinos, but when it comes to authorizing them, this comes from business pressure or from powerful cross-border business,” the official said.
“These interests, and this powerful force, can’t be prevented,” he said, speaking shortly after the opening in September of the Dok Champa slot machine facility in a suburb of the capital Vientiane.
Laos has several slot machine venues located on its borders with Thailand and China, in addition to three fully fledged casino resorts.
One Chinese casino was closed down last year following allegations it was plagued by crime.
Tourists from Thailand, China, and other countries where gambling is strictly forbidden flock to the Lao casinos, which are operated as joint ventures with the Lao government.
Except for the Dansavanh Nam Ngum Resort near the Vietnam border, which is run by a Malaysian investor, all the major casinos in Laos are backed by China-based companies, two of them in tax-free special economic zones.
The casinos have been a source of controversy with authorities threatening to shut them down and often barring Lao citizens from patronizing them.
Lao authorities are opposed to the gambling businesses, despite being good sources of revenue for local governments, because of the social ills they bring to Laos, said the official from Thailand, which is concerned over the loss of foreign revenue to gambling overseas.
“It is certain that they do not want this [kind of business] because having these casinos has already had [negative] impact on people’s livelihoods,” he said.
Troubled venues
He pointed to the gambling enclave in Boten, a special economic zone along Laos’s northern border with China, as an example of how Laos’s casino businesses are plagued by crime.
Last year, authorities officially closed the Golden City casino in Boten, citing “speculation of criminal activity” following allegations that the business was linked to money laundering, murder, fraud, kidnapping, drugs, human trafficking, and the sex trade.
But sources said that even after authorities declared the zone “casino-free,” Golden City remained operating behind closed doors for selected clientele, including groups of tourists arriving from China.
The King’s Roman casino, in the Golden Triangle Special Economic Zone bordering Thailand and Burma, has also faced allegations of links to drug trafficking.
The Sanum Vegas casino by the Thai border in southern Laos’s Savannakhet province is under threat of closure, with authorities saying that they will seize the entertainment complex from the owner, Macau-based Sanum Investments Ltd., in payment for for what the government says are unpaid taxes.
Sanum, whose slot machine business in Thanaleng outside Vientiane has already been taken over by authorities, is awaiting arbitration through the World Bank’s International Centre for the Settlement of Investment Disputes for a suit it filed alleging that the Lao government had broken international treaties promising to protect foreign investment.
Welcoming casinos
But despite the closure or threats of closure surrounding the country’s casinos, Lao authorities have welcomed the gambling business in the country, a government official said, denying that any foreign investors had tried to force Laos’s hand.
“Laos does not yield to pressure,” he said, speaking on condition of anonymity.
Foreigners investing in Laos, no matter which country they are from, respect and honor the Lao government and officials, he said, adding that he was not aware of any pressure on Lao authorities over gambling venues.
Another Lao government official, speaking on condition of anonymity, said authorities welcome the gambling business not only for the revenue they bring to the government as joint ventures, but also as a magnet for tourists.
“Take Savannakhet for example,” she said, referring to the province bordering Thailand that is home to the Savan Vegas casino.
“It has welcomed considerable number of tourists. Foreign tourists are attracted by casinos,” she said.
