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Cambodia Monthly Legal Update – November 2020 

by Segolene Leffy

Published: December, 2020

Submission: January, 2021

 



Law on the Management of Commercial Gambling, Royal Kram NS/RKM/1120/031 dated 14 November 2020


Overview


On 14 November 2020, the Law on the Management of Commercial Gambling (“Gambling Law”), the first comprehensive legislation to regulate casinos and commercial gambling centers in Cambodia, was promulgated. Before the passing of the Gambling Law, the key legislation governing gambling activities was the Law on the Suppression of Gambling dated 26 January 1996 (“LSG”) and various implementing regulations that were issued by the Royal Government of Cambodia (“RGC”) and the Ministry of Economy and Finance.


We have set out below some key insights into the Gambling Law.


Scope of Application


The scope of the Gambling Law covers integrated commercial gambling centers and commercial gambling in Cambodia.  In this regard: 


  • Center operating integrated commercial gambling’ refers to a development zone authorized by the RGC, such as those operating hospitality, restaurants, supermarkets, hotels, sport centers, entertainment centers and/or assembly centers or exhibition centers and free duty stores, in which one or more casino operators operate commercial gambling;
  • Commercial gambling’ refers to casino gambling, betting games, games of chance and/or other commercial gambling, those of which are operated for commercial or profit-generating purposes; and
  • any commercial gambling not involving the placement of money (or objects having a value) at stake in order to win the money (or objects having a value) shall not be deemed as ‘commercial gambling’ for the purpose of the Gambling Law.

The Gambling Law introduces a new regulatory framework for all relevant natural and legal persons operating or involved in commercial gambling in Cambodia, which includes the following:


  1. owners of integrated commercial gambling centers;
  2. casino owners;
  3. casino operators;
  4.  special personnel;
  5. commercial gambling promoters; and
  6. producers/manufacturers, installers, importers, sellers or distributors of gaming equipment and applications.

Regulator of Commercial Gambling in Cambodia


The Commission of Commercial Gambling (“CCG”), an inter-ministerial commission comprising of representatives from various governmental ministries, is the competent authority regulating commercial gambling in Cambodia. The regulatory authority of the CCG includes proposing policies, issuing implementing regulations, issuing of licenses, collecting revenues and taking all necessary actions in relation to integrated commercial gambling centers and commercial gambling activities in Cambodia.


Licensing Framework


The CCG is the competent authority responsible for issuing all relevant licenses relating to centers operating commercial gambling and commercial gambling activities in Cambodia. Pursuant to the Gambling Law, subject to the types of commercial gambling and related activities, the CCG, may issue the following licenses: casino license, betting game license, game-of-chance license, license for other commercial gambling, special personnel license, commercial gambling promoter license and licenses for producers/manufacturers, installers, importers, sellers and/or distributors of gaming equipment and/or applications. We discuss certain licenses under the Gambling Law below.  


Casino license


Only the following persons may apply for a casino license from the CCG:


  1. an owner of an integrated commercial gambling center;
  2. a casino owner; or
  3. a legal person who has completed commercial and tax registrations with the Ministry of Commerce and the tax authority and enters into a casino operation agreement with a casino owner or an owner of an integrated commercial gambling center.

A casino license will be issued for a validity period as specified in the license, which will not exceed 20 years from a date the casino license is publicized. It is important to note that the above licensing period is only applicable to a casino located in an integrated commercial gambling center. A casino located outside an integrated commercial gambling center will be licensed for a period of not more than five years.


Special personnel license


In the context of a casino, ‘special personnel refers to personnel serving in a casino and having authority to manage and make decisions relating to the management of casino operations or other personnel who undertake the following duties and functions:


  1. operate gambling in the casino;
  2. move money or chips;
  3. exchange money or chips to customers;
  4. count money or chips within the casino premises;
  5. maintain security within the casinos;
  6. operate, maintain, install, or repair commercial gambling tables, machines and equipment;
  7. manage and control the above activities; and/or
  8. other activities related to casino operation, as determined by the CCG and notified to a casino operator.

Please note that an individual may perform any duties and functions of a special personnel only if he/she obtains a special personnel license pursuant to the Gambling Law.  A special employee license holder may perform any duties and functions, as specified in his/her license only and in accordance with conditions of such a license.


Procedure, formalities, obligations and conditions for issuing such license, transfer and validity extension of such license will be determined by a Prakas issued by the CCG.


Commercial gambling promoter license


Prior to undertaking operations, a commercial gambling promoter must obtain a license from the CCG.  Only a legal person with a commercial gambling promoter license may undertake activities relating to the promotion of commercial gambling in Cambodia.


Commercial gambling promoters are permitted to act as an agent of one or more casino operators or commercial gambling centers in bringing players to gamble at such casinos or commercial gambling centers and provide other facilitation to such players (such as food, transportation, accommodation, entertainment and other benefits) in exchange for commissions or other considerations. Such persons are also permitted to provide loans to non-resident and non-Cambodian national players in their own capacity or as an agent of the casino operators or other commercial gambling centers.


Betting game license, game-of-chance license and license for other commercial gambling


Types and number of betting game license, game-of-chance license and license for other commercial gambling must be determined in a Prakas issued by the CCG.


The procedure, formalities, obligations and conditions for issuing such licenses (including amount and formalities of the guaranteed deposit by all such relevant operators), transfer and validity extension of such licenses will be determined by a Prakas issued by the CCG. Additionally, operations, management and the supervision of betting games, games of chance and other commercial gambling will also be determined in a Prakas issued by the CCG.


Licenses for producers/manufacturers, installers, importers, sellers and/or distributors of gaming equipment and/or applications


Similarly, licenses for producers/manufacturers, installers, importers, sellers and/or distributors of gaming equipment and/or applications must be determined by the CCG. The procedure, formalities, obligations and conditions for issuing these licenses (including the amount of and formalities for the guaranteed deposit by the relevant operators) and the transfer and validity extension of such licenses must be determined by a Prakas of the CCG. Management and supervision of manufacturing and production, installation, import, sales or distribution of gaming equipment and/or applications must also be determined in a Prakas of the CCG.


Other Key Highlights


Prohibited Zones versus Permitted Zones


The Gambling Law divides commercial gambling zones into two different zones: (1) prohibited zones; and (2) permitted zones. Casino gambling and betting games are only permitted in the premises of a casino. In the prohibited zones, all or certain types of commercial gambling are prohibited for the purposes of preserving culture, religion or necessity or other reasons.  The prohibited zones and types of the prohibited commercial gambling will be determined in a Sub-Decree. The permitted zones are those geographical areas located outside of the prohibited zones.


Casino versus Integrated Commercial Gambling Center


The Gambling Law also sets out a development framework for a casino and an integrated commercial gambling center under a development approval and development agreement.


Only a legal person who has completed commercial registration with the Ministry of Commerce and tax registration with the tax authority may apply for an approval of a casino development or an integrated commercial gambling center development, provided that it has ownership rights over one or more of the concerned locations. Nevertheless, a legal person having any legal rights over one or more of the concerned locations may also apply for development approval, provided that such legal rights may be enforced pursuant to the decisions of the applicant.


An applicant must first apply for and obtain a development approval in principle from the prime minister prior to applying for a development approval from the CCG.


Ownership and development of a casino or an integrated commercial gambling center must be implemented in accordance with the provisions of a development agreement to be entered into between the CCG and the applicant.


Casino Operation Agreement


A ‘casino operation agreement’ refers to a commercial agreement governing the relationship between either: (1) a casino operator and a casino owner; or (2) a casino operator and the owner of an integrated commercial gambling center. A casino operation agreement must be approved by the CCG, noting that the CCG must approve only the terms and conditions relating to public policies. The validity of a casino operation agreement must not exceed the validity period of a casino license.


Existing License Holders


Operators of commercial gambling holding licenses issued before the Gambling Law is passed are required to fulfill all conditions pursuant to the Gambling Law, including any other conditions to be provided in a Sub-Decree or legal instrument to be issued by the CCG.


In addition, existing agreements between the RGC and operators of commercial gambling executed before the Gambling Law was passed continue to be in force until such agreements expire.


New Law promulgated on the management, use and disposal of state property


The new Law on Management, Use and Disposal of the State Property (“Law”) was promulgated by His Majesty the King Norodom Sihamoni on 14 November 2020.


A statement from the Council of Ministers indicated that this Law is based on Article 58 of the 1993 Constitution of the Kingdom Cambodia which stipulates that “state property includes land, underground, mountains, seas, seabed, undersea, under-seabed, beach, air spaces, islands, rivers, creek, lakes, tributaries, forests, natural resources, economic and cultural centers, national defense bases and other buildings are designated as state-owned and managed by Cambodian law.”


The Law comprises 12 chapters and 90 articles, aimed at enhancing the effectiveness, efficiency, transparency and accountability in terms of managing, using and disposing state property and will form the legal bedrock to strengthen the legal framework, institutional structure and enhance institutional capacity in state asset management.


This Law identifies various types and sources of state property, strengthens legal systems and outlines the institutional structure through which to manage and maintain an up-to-date and accurate inventory of state property, sets out provisions with respect to audits and inspections, along with detailing available incentives and penalties for violations of the Law.


According to this Law, state property is classified as either state public property or state private property. State public property is strictly prohibited from being sold, exchanged, used as collateral, donated or granted as a concession. However, state public property which no longer serves the public interest may be converted into state private property by means of reclassification through the adoption of a relevant sub-decree. State private property may be used and disposed of by way of a lease, sale, exchange, donation, usufruct, land concession, public service concession or easement or in any other form as allowed by applicable laws and regulations.


The Ministry of Economy and Finance acting as the Etat-Major of the Royal Government will serve as the competent authority entrusted with the management, use and disposal of state property.


It is important to note that according to this Law, state property may be seized by the state by way of restitution for any legitimate reason or due to illegal usage or possession thereof by a private individual.


Should you have any concerns on the impacts of the above new regulations on your business, please contact us at: [email protected].


The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situation.


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The post Cambodia Monthly Legal Update – November 2020 appeared first on DFDL.


 



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