US Keeps Cambodia on Tier 3, Alleging Officials Profited From Scam Centres

The State Department's 2026 Trafficking in Persons Report says senior Cambodian officials benefited from and protected scam compounds, that no scam centre trafficker was prosecuted, and that casinos with a documented history of hosting scam centres were licensed in January. It lands as Cambodia sends inspectors into casinos to enforce its online gambling ban.

• The US State Department has kept Cambodia on Tier 3, its lowest ranking, in its 2026 Trafficking in Persons Report, alleging that some senior officials, advisors and police benefited financially from scam centres and interfered to protect them
• The report says no trafficker linked to scam centres was prosecuted, no complicit official was investigated, and no action was taken against two US-sanctioned senators whose hotels and resorts were linked to scam centres
• It says the government issued official licences in January 2026 to casinos with a documented history of hosting scam centres
• Victims identified fell to 331 from 405, while 110,095 foreign nationals left Cambodia with no reported trafficking screening; the Interior Ministry says all 86 large scam centres it identified have been dismantled
• The findings arrive as Cambodia sends task forces to inspect casinos in 16 provinces to enforce its online gambling ban

Washington Says Officials Profited From the Compounds They Were Meant to Close

The US Department of State has kept Cambodia on Tier 3 in its 2026 Trafficking in Persons (TIP) Report, concluding that the government "does not fully meet the minimum standards for the elimination of trafficking and is not making significant efforts to do so". The report is dated 8 October, according to the Phnom Penh Post. Burma and Laos also stay on Tier 3, with both narratives describing scam centres run from casinos and special economic zones.

According to the Cambodia narrative, senior officials, their family members and business elites close to them, "including two senators sanctioned by the United States", were reportedly involved with and benefited from scam centres or owned properties on which they operated. Observers reported that compounds often got advance warning of raids, or that local police needed permission from senior officials to enter. The report does not name the senators; in September 2024 the US Treasury sanctioned senator and tycoon Ly Yong Phat, his L.Y.P. Group and the O-Smach Resort over trafficked workers in scam centres.

The enforcement record is thin at the top. The government demoted eight officials allegedly complicit in scam crimes, including a three-star general in the Interior Ministry's immigration department, but reported no investigations, prosecutions or convictions of government employees. It reported 569 trafficking convictions, against 658 a year earlier, but the State Department says the data includes non-trafficking crimes such as kidnapping. NGOs cited in the report say labour traffickers in practice faced fines or jail terms of six days to one month under the labour law. A draft law on online scams would set penalties of up to 20 years in prison and fines of up to $500,000 where trafficking or violence is involved.

Raids, Compounds That Emptied Early, and Casinos That Were Licensed

The report credits the "Operation XXL" campaign, launched by the prime minister's ad hoc commission in July 2025 and escalated from January 2026, with closing hundreds of suspected scam centres and releasing thousands of potential victims. It also records the arrest and removal to China of the US and UK-sanctioned chair of Prince Group, whom Cambodia's Interior Ministry identified as Chen Zhi, arrested on 6 January, Khaosod English reported. In October 2025 the US Treasury sanctioned 146 targets in the Prince Group transnational criminal organisation, alleging profits from illegal online gambling and describing its Jin Bei Group as a luxury hotel and casino company that also operates scam compounds. Prince Group has previously denied involvement in scam compounds, money laundering or other criminal activity.

The rest of the assessment is harsher. Survivors reported compounds emptying before police arrived while nearby centres kept operating, and observers said some centres tied to powerful elites were not raided. Officials referred about 80 cases involving 750 scam operators and perpetrators to court, but the government "has not prosecuted or convicted a suspected scam center operator or owner", the report says. Then comes the line most relevant to the gambling sector: "In January 2026, the government issued official licenses to casinos with a documented history of hosting scam centers." The report does not name them.

On victims, the government identified 331 victims or suspected victims, against 405 the year before, a count that also includes forced marriage cases. Authorities reported that 110,095 foreign nationals from Bangladesh, China, India, Indonesia, Pakistan and Vietnam left Cambodia, with no reported screening for trafficking. Some detainees were reportedly made to pay bribes or were resold to other compounds. NGOs estimated that 150,000 people were held in forced labour in about 350 compounds in 2025, made to run schemes including illegal online gambling, though numbers have fallen significantly since the crackdown and many groups have moved to neighbouring countries or into homes and apartments, the report says.

Interior Ministry spokesman Touch Sokhak told the Phnom Penh Post that authorities have dismantled all 86 large-scale scam centres they identified, deported tens of thousands of scammers, and hold thousands of senior operators whose cases are before the courts. iGaming Times found no formal government statement on the report by 13 October. The Cambodia narrative carries no list of recommendations.

The Casino Licence Line Is the One Regulators Will Be Asked About

Cambodia has spent 2026 presenting casino licensing as part of the cure: its gambling regulator revoked licences linked to Chen Zhi in February, and the government said in August it had revoked 20 licences and suspended 29. The State Department says that in the same year licences went to casinos with a record of hosting scam centres. Without names the claim cannot be tested casino by casino, but it chimes with the IMF's finding that Cambodia's vetting of casino owners is deficient. Banks, payment providers and suppliers dealing with Cambodian licensees will read the two documents together, and with most licences due for renewal around 2027, a licence alone now looks like weak evidence of suitability.

Raids Without Prosecutions Leave the Ownership Layer Untouched

The government's number and Washington's measure different things. Dismantling 86 centres and deporting workers removes the labour; it does not touch the people who own the buildings, and the report says hotels and resorts linked to the sanctioned senators remain open. That is the enforcement gap in its clearest form: closing sites while owners keep their property and licences invites the dispersal the report already describes, into apartments at home and compounds across the border. Cambodia's casino inspections test equipment and premises. The State Department's test is a prosecution.

Cambodia can point to closed compounds, licence revocations and a Prince Group chairman sent to China. Until an owner or an official stands trial, Washington will keep scoring the effort as insufficient, and the casino estate will keep carrying the doubt.