Stakes are high
Vietnam has finally made the historic decision to allow Vietnamese citizens to enter casinos in the country.
According to the latest decree, for Vietnamese nationals to gamble at casinos they must be at least 21 years of age, have proof that their minimum monthly income is VND10 million ($440), pay an entrance fee of VND1 million ($44) for 24 hours or VND25 million ($1,100) for a month, and not have any official requests from family members that the casinos should refuse them entry.
Since the decree was released in the opening days of the year, Ms. Mai Thi Tuyet, a 31-year-old accountant living in Ho Chi Minh City’s District 4, has been concerned about her husband.
“He works at an export processing zone on a monthly salary of VND12 million ($530) and is addicted to gambling,” she said. If local people are permitted to enter casinos, “I’m afraid he won’t be able to control himself.”
Others on high incomes and without addiction problems, however, are keen to go to casinos in Vietnam instead of taking their money overseas.
Opportunities on offer
The Vietnamese Government has been tinkering with its gambling legislation for many years, weighing up the pros and cons of putting the industry into a controlled and regulated environment.
The decree creates new momentum for a host of billion-dollar projects that have long been in the pipeline.
Granting access to Vietnamese citizens would see the government bring in $800 million from casino activities and end the $250 million in currency that flows out of the country every year, according to industry insiders.
Regional casino operators would be concerned about losing their Vietnamese customers, even though the decree only allows for a three-year pilot.
Gross gaming revenue would reach $3 billion to $6 billion a year if casinos were open to all, Worldcasinodirectory.com reports.
Vietnam’s tourism sector recorded growth of 16 per cent in 2016, indicating the potential of the casino industry in the country.
In an interview with VET recently, the leader of Marina Bay Sands (MBS) confirmed that, in addition to Singapore, Vietnam is one of the casino group’s two strategic destinations in the future.
As reported few months ago, a number of major foreign players in the global casino industry, including Macau’s MGM, Malaysia’s Genting Berhad, and the US’s Las Vegas Sands have long expressed an interest in investment opportunities in Vietnam but grown impatient with delays in adjusting the legal framework.
A number of integrated resort projects under construction, such as the Hoiana Integrated Resort (previously South Hoi An) and Ho Tram Strip worth billions of US dollars have identified their operating model as being integrated complexes that include casinos. Legislative changes encourage them to move forward with their plans.
Total investment in casino industry, by country
Source: Macquarie Research 2015
Foreign investors hope that local people insist on a broader range of entertainment options at integrated resorts, while would bring in huge revenues, according to Mr. Nguyen Dinh Chuc, Deputy Director of the Research Institute of Regional Sustainable Development (IRSD).
Investors, after the decree becomes effective in mid-March, will have high hopes for high revenues from international as well as local gamblers, especially from Vietnam’s growing wealthy class.
Different forms of electronic gaming and gambling would be a boon to the country’s tourism sector.
The casino industry has a special ability - appealing to high-income international travelers - and Vietnam tourism’s sector can already compete in terms of famous destinations.
In Singapore last year, State budget contributions from gambling totaled $1.1 billion, compared to the modest $20 million in Vietnam.
Granting Vietnamese citizens entry to casinos would clearly bolster the State budget.
Research conducted by IRSD revealed that if foreign investment into casinos increased by $3 billion, Vietnam’s GDP would increase by about 0.58 per cent.
The country’s gambling industry truly is a fertile of land, as the Vietnam Lottery Company (Vietlott) recorded total revenue of nearly $71 million last year, a 16-fold increase against 2015 thanks to the appearance of the Mega 6/45 lottery in the middle of the year.
Restrictions in place
The decree does stipulate certain limitations, as noted above.
According to Professor Ha Ton Vinh, the requirement that gamblers earn a minimum monthly income of $440 is impractical and unreasonable, as verification would be hard to come by.
“People aged 21 years or older can enter casinos, so the government needs to restrict low-income earners by other means,” he said.
It should levy taxes on individuals playing a little or too much, and could increase the minimum bet.
The casino business in Vietnam has also been restricted by the fact it’s a “pilot scheme”, because local people are still to be allowed to gamble in certain integrated complexes under construction, such as the Hoiana Integrated Resort in central Quang Nam province and Ho Tram Strip in southern Ba Ria Vung Tau province.
It is evident that competition for obtaining “pilot” licenses will be quite fierce.
There will soon be a circular giving clear instructions, on which international investors can base long-term plans for Vietnam’s gambling industry.
A major concern for Vietnam is that casinos are often accompanied by social ills.
This double-edged sword is why the government has delayed casino legislation.
In reality, though, there are some 200 forms of illegal gambling now available domestically.
“Gambling is a large-scale industry so it needs to have clear regulations,” Mr. Chuc said. The social consequences, he added, would be far easier to manage if all gambling was regulated.
VN Economic Times