Foreign interest stirs on locals prospect

International casino operators are reportedly taking another look at Vietnam in the wake of newly introduced gambling legislation, while existing operator Donaco International is reporting a much improved performance.

The government published its long-awaited bill setting out regulations for casinos earlier this year, with the rules set to take effect in March.

The bill includes a three-year pilot scheme allowing locals to gamble at two yet to be completed resorts, one in the far north and one in the south on Phu Quoc island.

It is unclear at present as to whether the scheme may also extend to the Grand Ho Tram resort.

According to local media reports, international investors are already eyeing the market’s potential, with VietnamNetBridge reporting that Las Vegas Sands, Banyan Tree, Crown Resorts, Chow Tai Fook and Sun City all closely following developments in the country. The decree sets a minimum investment of of $2 billion. Vietnam is keen to attract more foreign investment into its tourism sector, with the introduction of integrated resorts seen as a major draw. According to the Institute for Sustainable Development under the Vietnam Academy of Social Sciences, if foreign investment in the casino industry increases by $3 billion, the GDP will increase by 0.58 percent.

Tourism has been growing strongly. Total international arrivals last year rose 26 percent to 10,012,735. China was by far the biggest source market with 2.7 million visitors in 2016, up 51 percent on the prior year, followed by South Korea, with 1.5 million.

Tourism authorities are eyeing a 15 percent increase in international tourists this year, with the sector expected to contribute 10 percent to gross domestic product. According to government projections, the country is expected to receive 20 million visitors by 2020, contributing $35 billion in tourism revenue.However, analysts warn against over optimism.

Locals set to bet on football, racing

Vietnam will allow betting on international football matches, as well as horse and greyhound racing from the end of March. Online betting is not allowed, and bookmakers are required to be located at least 500 meters away from schools and venues with children. Bookmaking operators will also need to meet strict capital requirements depending on what sport is offered. According to the decree, bookmakers will require VND1 trillion for horse racing and football, and VND 300 billion for greyhound.

Daily gambling limits seen as too low

The imposition of a VND1 million ($45) daily gambling limit is too low and will still cause people to go to overseas casinos to gamble, critics say. “VND 25 million a month won’t be able to satisfy them. They would rather go gambling abroad than go to domestic casinos,” the owner of a private company in Hanoi was cited as saying in local media.

The resorts currently included in the pilot scheme are relatively remote, although infrastructure is being improved to ease access.

There is also no guarantee that the scheme will be extended after the initial period to include other resorts.

Concern has also been voiced about the size of the initial capital required, with some doubting the market in its current form is able to provide an adequate return on an investment of that level.

The country currently has 8 casinos, with the largest being the Grand Ho Tram on the southern coast, owned by Asian Coast Development. The wording of the final regulations, unlike in earlier drafts, did not specifically name Van Don and Phu Quoc as the only resorts to be allowed to admit locals, leaving some to speculate that the door may still be open for the Grand Ho Tram to take part.

“The soothsayers will say Ho Tram is ready to accept local Vietnamese as early as March 15, the date the decree takes effect,” Augustine Ha Ton Vinh, president and CEO of Stellar Management, said.

“The pessimistic people and those who are knowledgeable about the government, however, believe It ain’t over till the fat lady sings.”

Meanwhile. Australia-listed Donaco International has reported a much improved performance at its Aristo International property in its latest half-year results, helped by a focus on driving mass market visitation and reducing reliance on VIP visitors from China.

Total visitors in the first half to end December surged to more than 100,000, up from 62,000 in the same period last year. It said the strong trend has continued into the first two months of this year.

Although excluded from the locals pilot project, in its results announcement, the company said “as a pioneer of casino gaming in Vietnam, Donaco is currently exploring its options to participate in and benefit from the liberalization of the industry.”

Donaco reported total revenue rose 15 percent to RMB69.4 million.

Net gaming revenue rose 12 percent to RMB43.1 million, while non-gaming revenue jumped 20 percent to RMB26.3 million. VIP turnover declined 23 percent.