Mongolia has rolled the dice before on establishing casinos but without much luck. A renewed attempt to open the country’s first casino in more than two decades is now underway as Mongolia looks for new avenues of economic growth.

A bill to legalise casinos, betting, lotteries and horse racing was submitted to Parliament in December and is making its way through various Parliamentary committees, according to the State Great Khural website.

The hope is that foreign visitors can be encouraged to make bets on slot machines and at poker tables after visits to the open steppes of the Mongolian countryside. Largely dependent on mining, Mongolia is looking for ways to diversify its economy and boost growth as it faces headwinds. Its currency has lost 22% of its value over the past 12 months and GDP has fallen to 2.5% after being in double digits a decade ago.

The casino concept is being pushed by the government after it declared the years 2023-2025 as the “years to visit” Mongolia. The bill in Parliament also provisions building horse racetracks and legalising lotteries.

Casinos have been opening across Asia over the past two decades, mainly catering to Chinese holidaymakers. The Philippines, Singapore, Cambodia and Malaysia are a few of the countries that have made a bet on casinos to boost revenue.

But as Mongolia heads down the path of casinos, some remain wary of gambling. In 2019 authorities banned civil servants from gambling in casinos in other countries amid reports that officials were spending an inordinate amount of time in casinos whilst on official trips abroad.

One quirk in the bill submitted to the Great Khural states that Mongolian citizens won’t actually be allowed to gamble in the casinos on their own soil.

While banning citizens from entering casinos in their own country is unusual, Mongolia would not be the first to enforce such a law. A similar restriction also exists in Monaco. South Korea also bans its citizens from all but one of its 23 casinos. This provision could prove controversial if lawmakers consider it not to be in line with the country’s democratic values, said Bolortuya Ulziibat, managing partner at Ulaanbaatar-based Tsogt & Nandin law firm.

“The government asserts that such a restriction does not violate human rights and only aims to prevent negative impacts on locals, such as gambling addiction,” said Bolortuya. “I personally can’t agree, because there may be some legal issues such as a conflict with the constitution and discrimination.” But such a provision may not be too controversial among Mongolians, said Bolortuya.

“Casinos are still a very sensitive and negative subject in Mongolia, almost like guns or drugs,” she said. “So if the government makes casinos open to Mongolians then people might protest against such a draft law. Personally, I think most Mongolians may like such a legal restriction.” Casinos have had a poor reputation in Mongolia since the late 1990s, when a casino located in the basement of the Chinggis Khaan Hotel was shut down after two years in business amid allegations of corruption and money laundering.

Some speculated that the casino was connected to the murder of prominent politician Zorig Sanjaasuren, who was assassinated in October 1998. Zorig, infrastructure minister at the time of his death and in line to succeed an outgoing prime minister, was reportedly against the business.

Later administrations attempted several times without success to re-establish a casino business, all of them withering in the face of public scepticism over legalised gambling.

If passed, the new law would permit authorities to issue casino operating licences valid for 30 years. Upon expiry of the licence, half the casino shares must be transferred to the government. The operator’s licence can then be extended an additional 10 years. Another provision would prohibit the transfer of a casino licence to another company after it has been issued.

The minimum investment required by the government is $300mn. The last time Mongolia saw an investment in tourism on that scale occurred in 2015, when Shangri-La opened up a $500mn hotel, office and shopping complex in Ulaanbaatar.

As for Mongolia’s take, a tax rate of 40% on profits would apply, equal to what is currently required of casinos in Macau. A portion of the revenues would go back into tourism development. The legislation would also require the operator to make all transactions through local banks.

"The aim was to create a real investment that would be adapted to the specifics of our country,” Nyambaatar Khishgee, Mongolia’s Minister for Justice, said during a briefing to Parliament members last month. “Three hundred million is the threshold needed to make a real investment from scratch, not just to rent a ready-made building and start operations.” Casinos would be permitted within a 1,000-hectare free trade zone in Khushigt Valley, near the New Ulaanbaatar International Airport. The zone, set up last year and approved by Parliament, is located 50 km south of the capital. The law protects whoever jumps in first, allowing that operator a five-year monopoly before licences would be made available to companies.

A majority of members in the Standing Committee that heard the first reading supported the motion to continue discussions of the law in Parliament.

Zolbayar Enkhbaatar, editor-in-chief of the financial newsletter Inside Mongolia, says casinos could help boost the economy and previous failures to pass a casino law shouldn’t deter legislators.

“It's a good step that we're even discussing this topic, because casinos used to be kind of a banned topic in Mongolia,” said Zolbayar.

But Zolbayar sees the rule that bans Mongolian citizens, along with the high entry cost for investors, as major impediments to development. “Because of those reasons, very few investors might be interested, if any,” he said.

While there are no currently no physical casinos in Mongolia, a number of online gaming platforms have emerged, although most of them are unauthorised. Several have been blocked in recent weeks by the Communications Regulatory Commission of Mongolia, according to News.mn, a local news portal.

While gambling in casinos would be outlawed under the law under review, the law would not ban gambling at short-track horse-racing events. Mongolia already has a culture of horse racing but those events are long-distance riding, and until now betting has been informal and usually between friends.

“The adoption of these laws has the potential to open space for new kinds of businesses, including horse stable facilities, betting software and rider training,” said Zolbayar.

One change from the norm is that the new law would require that jockeys are certified professional riders. This rule would prevent children – who serve as jockeys during summer festival races – from entering professional races.

BY: Michael Kohn

Michael Kohn has covered Mongolia since 1998, reporting on social, political and economic changes in the country during its transition and growth. He has written travel guidebooks on Mongolia and two books: Dateline Mongolia and Lama of the Gobi.

LONDON -- Resource-rich Mongolia is positioning itself as an alternative to China in supplying minerals used in the renewable energy sector but needs help from foreign investors to develop the necessary mining infrastructure, its deputy prime minster says.

"We will be one of the main players [in critical minerals], I'm sure, but it will take time," Amarsaikhan Sainbuyan told Nikkei Asia while in London to celebrate 60 years of U.K.-Mongolian diplomatic relations. "The Mongolian government is open for all kinds of investments and partnerships."

Minerals such as copper, nickel, lithium and cobalt are crucial for manufacturing battery-powered electric vehicles, as are rare-earth metals that largely come from China.

The National Geological Office of Mongolia had registered reserves of 61.4 million tons of copper and 3.1 million tons of rare-earth minerals as of July 2022. Last year, Southern Mongolia's Oyu Tolgoi mine -- one of the world's largest known copper reserves -- received approval to begin underground operations.

Sainbuyan said unlocking Mongolia's "huge potential" to supply minerals crucial for the green transition would require help from foreign investors in developing environmentally friendly and energy-efficient mining technology.

"A country like Germany, or European or Western producers, they are interested in securing the raw materials, especially in critical mineral and rare-elements metals," as they seek to reduce their dependence on China, he said. "We have to capitalize" on this interest.

Several high-level German visits have been planned to discuss cooperation on such matters, he said. Germany, a leading vehicle maker, has been eyeing Mongolia's potential for over a decade, co-founding the German-Mongolian Institute for Resources and Technology.

When German Chancellor Olaf Scholz welcomed Mongolian Prime Minister Oyun-Erdene Luvsannamsrai to Berlin last October, he said Mongolia would be "an important partner" for "many raw materials" in Germany's diversification strategy but emphasized that concrete projects need to be identified.

Mining accounted for roughly a quarter of Mongolian GDP in 2021 and 29.6% of budget revenues, according to the Extractive Industries Transparency Initiative. The pandemic slowed activity, but now is the time to "pick up," Sainbuyan said.

Corruption allegations over coal exports to China by a state-owned enterprise led to demonstrations in December. Investigations are ongoing and several people have been arrested.

Sainbuyan said the government is committed to fighting corruption. "This is the main concern of the government, to reduce poverty and stop corruption," he said.

Wedged between Russia to the north and China to the south, landlocked Mongolia faces limitations on export routes for coal -- a factor that could also affect its ability to ship strategic minerals. Despite strong interest for coking coal from the likes of India, South Korea, Japan and Europe, China will remain its main coal market because of "limited access," Sainbuyan said.

The government has been building and upgrading infrastructure to better connect the country, mainly through industrial railway links to China and Russia.

"Unfortunately, because of the geographical location, we have limited access and exit -- either we have to go to Russia or to China and export," Sainbuyan said.

BY: Rhyannon Bartlett-Imadegawa

The Mongolian government on Wednesday announced that the year 2023 is the "Year of Fighting against Corruption."

Mongolian Prime Minister Luvsannamsrai Oyun-Erdene ordered all relevant officials to ensure the implementation of anti-corruption measures and provide all-round support in the fight against corruption.

The move aims to shine a light on the shadow economy in order to expand the country's gross domestic product (GDP), Khishgee Nyambaatar, minister of justice and internal affairs of Mongolia, briefed media after a regular government meeting.

Within the framework of the anti-corruption year, the country is expected to take various measures, including passing a law to protect whistle-blowers.

In addition, under the framework of relevant international agreements and Mongolian laws, the country will repatriate corrupt fugitives and punish them, and uncover and return illegal funds hidden in offshore areas and foreign countries.

It is estimated that if these anti-corruption measures succeed, the country's GDP per capita could exceed 5,000 U.S. dollars for the first time.

On 27 January 2023, Mongolian President Khurelsukh Ukhnaa vetoed a social media bill that legislators adopted earlier in the month, only 48 hours after it was disclosed to the public, which made it the fastest decision ever taken by Mongolia’s parliament and did not allow any public debate on the matter. The Parliament can still override the veto providing it collects the two-thirds of the votes in a coming extraordinary session planned for this month.

The social media bill, that notably includes dispositions against hate speech, children abuse, drug trafficking and online fraud, also allows the government to request Internet Service Providers to “suspend or delete accounts” and “reduce the distribution of information” of contents deemed harmful to “national unity” and disclosing “state and official secrets”. This Bill, by giving the government body – and not a judicial or independent authority – such a power, would give political authorities the ability to make arbitrary and politically motivated decisions, giving the authorities to censor any online content they dislike.

Although Mongolia broadly respects the principles of press freedom and media pluralism, its media environment is plagued by conflicts of interest that hinder editorial independence. In 2017, a few weeks before the presidential election, Mongolian television stations replaced their normal programming with blank screens in protest against plans to increase the penalties for defamation, which they feared would force journalists into self-censorship.

In 2021, Mongolia was officially invited to join the 50 countries that already endorsed the International Partnership for Information and Democracy, a process originally initiated by RSF, which aims at implementing democratic safeguards in the information and communication space.

Mongolia ranked 90th out of 180 in the 2022 World Press Freedom Index

Mongolia's annual inflation rate fell to 12.3 percent in January from 13.2 percent in December 2022, the country's National Statistics Office said on Wednesday.

The inflation rate in Mongolia peaked at 16.1 percent last June due to higher prices for imports. The figure has been gradually decreasing ever since.

There are 410 items in the landlocked country's consumer goods and services basket. More than half of them are imported, according to the statistical agency.

The Asian country has aimed at reducing its inflation rate to a single digit by the end of this year.

On February 7, the European Union organized a high-level conference to define the framework of actions for sustainable green development in cooperation with the Government of Mongolia in Ulaanbaatar.

This conference is the preparatory event for the projects to be implemented in Mongolian agriculture, forestry, technical and professional training, and education sectors within this EUR 14 million non-refundable aid from the EU.

Ambassador of the European Union to Mongolia Axelle Nicaise delivered opening remarks. In her remarks, she said, “The EU considers Mongolia as its main partner to promote sustainable green investment. Our partnership demonstrates the realization of value-oriented investment based on democracy. It is our duty to pave a sustainable and green future for our succeeding generations. I would like to describe the result of this conference as Partnership-Accountability-Effect.”

During the conference, N. Batkhuu, Advisor to the President of Mongolia on Environment and Green development policy gave a presentation on the “One Billion Trees” national campaign. The “One Billion Trees” national campaign initiated by the President of Mongolia U. Khurelsukh has been successfully implemented throughout the country in order to rehabilitate forests, increase the forest reserves, reduce desertification and land degradation, increase the number of green spaces in cities, and reduce greenhouse gas emissions. It is planned to plant one billion trees in three phases. The first phase or the preparatory phase will be taking place in 2021-2024, and the second or the intensification phase will be implemented in 2024-2026, while, the third, or sustainable implementation phase is planned for 2027-2030. For the last one year, 12 million trees have already been planted and over 300 tree farms have been built.

In his presentation on the process of national campaign of “Food Supply and Safety”, Ch. Davaabayar, Advisor of the President of Mongolia on Industry and Service Policy and a Head in charge of Food projects and programs said, “With the purpose of ensuring the solid implementation of the national campaign “Food Revolution”, the State Great Khural’s Resolution No. 36 on “Measures to Ensure Food Supply and Safety” and its temporary commission’s Resolution No. 02 have been approved.

In order to implement Resolution No. 36, a total of MNT 1.7 billion is required, which will be contributed by the state budget, foreign aid, and loan and credit guarantee fund, each 48%, 34%, and 10%, respectively. This year, 70 projects for the food industry, trade and services, animal husbandry, veterinary clinics, agriculture, light industry, small and medium industries, services, cooperatives, and research are going to be implemented and MNT 521 billion is required for funding these projects, of which MNT 222.7 million has been included in the state budget. To that extent, the office of the President of Mongolia has been taking required measures to accelerate the implementation of the respective resolutions, ensure the coordination between stakeholders, and to make the funding sources clear and optimal.” At the end of his presentation, he pointed out that the office of the President would welcome any initiatives and cooperation proposals aligned with the “One Billion Trees”, “Food Supply and Safety” and “Healthy Mongolian” national campaigns.

The next presentation was given by T. Munkhsaikhan, Advisor of the President of Mongolia on Health, Sports, and Social Policy. He presented, “The ‘One Billion Trees,' ‘Food Supply and Safety’ and ‘Healthy Mongolian’ are well-coordinated and closely-aligned national campaigns. The focus of our health sector has shifted from improving the quality of healthcare services to eradicating the factors causing diseases. To that extent, we are focusing on four main areas, which are to create a healthy living environment for people, to provide our people with healthy foods, to promote healthy and proper lifestyles, and, lastly, to provide education on health and well-being to citizens stage by stage.”

Representing the education sector, a head of the Professional Education and Training Department of the Ministry of Education and Science D.Bilguudei said, “I presumed that the EU would implement projects in highly inter-related sectors such as agriculture, environment, and professional education while identifying these sectors as its priority areas. The Department of Forestry has released a study stating that an average of 3,000 professional personnel will be needed in the coming year in connection with the “One Billion trees” national campaign. As of today, vocational training centers in Orkhon, Selenge, Zavkhan, and Khentii aimag are preparing professional personnel for the agriculture sector. In the framework of the projects to be implemented, it is planned to conduct fundamental research and develop the content and curriculum of the training in a way that meets international standards. To this extent, it is required to enhance the coordination between the curriculums of the Mongolian University of Life Sciences and other vocational training centers. In other words, other required arrangements will be made to enable professors of the MULS to teach lessons on theories to vocational center students, and in turn, the students of MULS to do field internships on the training basis of these centers. For our Ministry, we deeply realize our responsibility to prepare highly skilled personnel who will play a vital role in ensuring the successful implementation of these projects.”

During the conference, in response to the question about her expectations for the Mongolian side with reference to the sustainable development goals, Axelle Nicaise, Ambassador of the European Union to Mongolia said, “We, the EU, will support the Mongolian Government’s mid and long-term policy and goals. Mongolia has made commitments to shift away from coal as much as possible and reduce greenhouse emissions on global arena. However, there is no way that Mongolia will have managed to fulfill its energy needs only with renewable energy sources, such as solar, wind, and water in one day. This is a transition process that requires time and effort. We will fully support this transition and Green development policies and initiatives of Mongolia.”

2 new COVID-19 cases were registered in Mongolia in past 24 hours.

2 of them are contacts in Ulaanbaatar. No cases were recorded in the regions.

Under Secretary of State for Civilian Security, Democracy, and Human Rights Uzra Zeya visited Mongolia February 5-8 and met with Parliament Speaker G. Zandanshatar, Minister of Foreign Affairs B. Battsetseg, Independent Authority Against Corruption Chief Commissioner Z. Dashdavaa, Minister of Justice and Home Affairs Kh. Nyambaatar, and National Security Council Secretary J. Enkhbayar. She also met with a range of civil society and religious leaders.

Under Secretary Zeya affirmed the United States’ commitment to deepening U.S.-Mongolia ties, anchored in our shared values, including the commitment to democracy. She also highlighted the need for continued progress in promoting good governance, rule of law, and human rights. The Under Secretary underscored U.S. appreciation of Mongolia’s role as a democratic leader in the region.

Robust U.S.-Mongolia partnership includes efforts to fight child trafficking, strengthen law enforcement and civil society, combat corruption, and protect human rights such as freedom of religion or belief and freedom of expression. The United States pledged $5.5 million in support for the U.S.-Mongolia Child Protection Compact (CPC) Partnership, which is a commitment between the United States and Mongolia to strengthen efforts to prosecute and convict child traffickers, provide comprehensive trauma-informed care for child victims, and prevent child trafficking. Under the CPC, Mongolia has, in the last year, opened three child-friendly spaces, which support child trafficking victims and other children during investigations, and launched two more spaces during Under Secretary Zeya’s visit.

Since 2018, the United States has also provided $13 million in technical assistance, equipment, training, and exchanges for Mongolian criminal justice agencies, ranging from the National Police Agency to Mongolia’s Supreme Court, including a $1 million project with the International Development Law Organization to improve transparency and combat corruption, in partnership with the Independent Agency Against Corruption, prosecutors, police, and civil society.

Elixir Energy Ltd., Adelaide, has reached pilot production of 100,000 cu f/d of gas and stable and low water rates of 180 b/d from its coal seam gas pilot project in the Nomgon IX production sharing contract in the South Gobi basin of Mongolia.

The two-well pilot program (Nomgon-8 and Nomgon-9) began in November 2022 and has been in operation for 83 days.

Nomgon-9 began producing gas from the first day of pumping with flow rates increasing steadily over the period, Elixir said. It has now reached 80,000 cu ft/d. The produced water has remained steady at 160 b/d.

Nomgon-8 experienced initial technical difficulties, necessitating a workover to flush and clean the production interval. Production has reached 20,000 cu ft/d of gas and water flow of 20 b/d. Elixir believes the flow rates will steadily increase.

The company has started interpretation of the ongoing Nomgon-9 production history and hopes to assess project commerciality in the coming months.

Elixir’s exploration and appraisal program for 2023 at Nomgon is expected to begin in this year’s second quarter. It will comprise drilling a minimum of nine wells (four appraisals, five exploration).