Ng off for illegal betting agents
‘Credit-based betting’
Agent networks like the one used for aa2888.com are prevalent across Asia and also found in Eastern Europe, said Lorien Pilling, director at Global Betting and Gaming Consultants.
They all work in a similar way: Those running the operation extend credit to high-level agents, who extend credit to lower-level agents, who recruit players for the website, who exchange cash for credit to gamble. Each level gets a certain percentage of the losses of the players underneath them in the chain and covers a certain percentage of the risk.
“Credit-based betting is beneficial in cash economies or where access to banking facilities is restricted,” Pilling said.
“Credit agent networks rely heavily on trust and getting the risk profile right so that no one is extended too much credit.”
To learn how the aa2888.com network was arranged, the Post approached a high-level agent – known as a “master agent” – under the pretext of becoming an agent.
To access the software and begin opening player accounts, he said a safety deposit was required to guarantee the credit. The normal amount was $5,000, though more could be given if more credit was desired, he said.
At most, he said an agent could get 30 to 35 percent from players’ losses, though this also meant the agent would have to take on a higher percentage of risk.
“To be honest, the agents I know never lose, the players always lose,” he said, saying one agent could have as many as 1,000 players.
He said he was not linked to the Shanghai Resort, but dealt with a higher agent in the chain who he referred to as a “super master agent”, though he would not give their name.
He also said there were agents outside Phnom Penh, including some based in Kampong Cham province. As for authorities, he said not to worry.
“The police, when you start an internet café, they will come and get the money from you. It is normal; we just give it to them,” he said, adding, in fact, local police were “taking care of us”.
“When they crack down on a large scale, I will tell you to close for one or two days. I will get the information from above. It’s not a problem. ”
Police payoffs
In October, the Interior Ministry announced the creation of a new department to tackle illegal gambling.
But leaning on the counter of an internet café near the capital’s Old Market, the store’s manager, a recent high school graduate, was unperturbed by the threat of arrest.
The man, who requested anonymity to speak, said his boss had three locations, his being the newest, having opened in November. He said it had so far signed up 30 players for aa2888.com.
“When the police come, we are not worried, because we pay to the state when opening this business,” He said.
The Kingdom’s gambling law strictly forbids unlicensed gambling, which means betting outside an approved casino. Even at casinos, which are ostensibly off-limits to Cambodians, the rules are loosely enforced.
“As for government restrictions, I have no idea,” said another internet café manager, standing outside his shop café in Boeung Keng Kang II.
“In Cambodia, it is politics. Sometimes, the place like this is okay, but police arrest people playing small games at home. So it is hard to understand and it is not absolute.”
The manager, who has run the business for nine months and also requested anonymity to speak, said his boss paid local police between $30 and $50 a month. It’s a small price to pay, given the returns. The man said his café had 70 to 80 players signed up with aa2888, which brought in between $3,000 and $7,000 a month.
The arrangement with the next level up in the chain – a “master agent” – means they pass on 90 percent of their profits on customers’ losses, and keep 10 percent. However, they can also claim to have 90 percent of their losses covered, in the case their players win.
“Most people play baccarat and football,” he said, adding that the biggest payout they had seen at their store was about $5,000, though most gamblers bet between $100 or $200 a month.
He said his shop had been warned to close, at least temporarily, because of “politics”.
Reached this week, spokesman for the National Police Kirth Chantharith said all unlicensed gambling venues were illegal.
Asked why internet cafés, whose connection with online gambling can be established by merely a question, continued to operate, he said he did not know their locations.
“I don’t have the report,” he said.
As for police taking bribes from owners of internet cafés, he conceded it was a problem.
“If we find out, we will punish the police officer . . . but we don’t have any report on this case now,” he said.
“The new department will deal with this.”
Sieng Seng, the man who will lead the new anti-gambling unit at the Interior Ministry, said when fully operational, said his department would take action. “We are collecting evidence to find out where is the source,” he said.
Regulation headache
The highly profitable, multifarious and murky world of online gambling is causing problems for regulators across the world.
In his book Online Gambling and Crime: Causes, Controls and Controversies, criminology lecturer at Sheffield University in the UK James Banks observes that a fragmented, and often contradictory, patchwork of regulations across the globe has given rise to a number of crimes linked to the industry including money laundering, match fixing and online fraud.
Arguing for legalisation, Banks writes such threats are “amplified” in countries with little or no legal framework.
Cambodia-based gaming consultant Johnny Ferrari, who has helped casinos in Cambodia develop software for online gambling, said regulating, rather than outlawing betting in the local market could bring in a huge tax windfall to government coffers.
“It’s not going to stop. Cambodians are big on casino games; Cambodians are big on . . . betting on football,” said Ferarri, who runs the consultancy Global Gaming Network.
“Regulating would clearly make money, a lot of money.”
But Phirun, of the Finance Ministry, said legalising gambling for Cambodians was not on the cards. He said the ministry was developing an online server to monitor web betting, while a new law to better regulate the casino and online gaming sector was still in the works.
As for the Post’s findings, Phirun said the Shanghai Resort had a licence to operate an online platform. He said he had made enquiries about the aa2888.com network.
“For the websites you mentioned, I had checked several times, and also asked Shanghai Resort’s owner, but he said he had not involved with these at all,” Phirun said.
Under the table
Though there are no clear estimates on the size of the online racket operating in Cambodia, a balance sheet seen by the Post for one multi-store operation shows a single internet café can net more than $14,000 a month.
Even with the conservative figure of $3,000 given by one manager, and 17 cafés visited by the Post, the value is over $600,000 a year. Given there are likely dozens more internet cafés in Phnom Penh and Cambodia, the local scene likely stretches into the millions, if not more.
Sitting behind a computer at an internet café near O’Russey Market and sipping from a can of Fanta, Vireak* played Keno – a lottery-type game – on aa2888. com yesterday afternoon.
Like other gamblers spoken to by the Post, he said he was unfazed by the illegality of what he said was a lunch-time habit.
“If it’s available, I’ll play. I don’t worry about being arrested.”
He said he believed the periodic crackdowns were also a type of game. Even if it were legalised, he said, money would still flow under the table.
“Any arrests, it is just to show they crack down on it. Like near my house in Chbar Ampov. They made arrests and shut an internet café down for two weeks. Now, it’s open again.”
*Namehasbeenchangedto protectidentity.