Robust revenue without local help

Vietnam’s casinos and slot parlors are likely generating between $800 million to $1.2 billion in annual gross gambling revenue, although a long-awaited locals program may be too timid to provide much of a further boost.

Union Gaming provided the market estimates in an August report based on figures provided by the three listed firms with assets in the country.

Australia-listed Donaco International and Silver Heritage Group and Royal International Corp. generated about $68,000 per gaming position in 2016, according to the August report. Its figures don’t include illegal gambling.

Applying a similar level to all positions would result in $415 million in GGR. “However, we believe this significantly understates the true GGR story as win/day in many of the Hanoi and Ho Chi Minh City slot parlors is many multiples of the $185 average noted above, while the junket-centric Crown International Club also well outearns the country average by many multiples.”

Vietnam has about 30 gaming facilities with 1,900 slots and almost 400 tables, the report found.

The government passed long-awaited gaming legislation earlier this year that will allow locals to gamble for the first time. However, it only handed out two licenses on a three-year trial basis to two locally owned developers building resorts in the far north and far south of the country.

Commercial banks get green light for casino-related forex

Commercial banks will be allowed to trade and provide foreign exchange services related to casinos from October, local media reports. The information was contained in Circular No10/2017/TT-NHNN on the management of foreign exchange for the casino business, which will come into effect from October 15 this year, Vietnam News reported. Foreigners and Vietnamese holding foreign passports are able to gamble freely in the country’s casinos, while a decision was taken earlier this year for locals to enter some of the country’s casinos for the first time on a three-year trial basis.

Ho Tram launches condotel project

The Ho Tram Project Company Ltd, operator of Vietnam’s only IR, has announced the launch of the KAHUNA Ho Tram Strip condotel and villa project. KAHUNA Ho Tram Strip is a 244-key resort development made up of 164 condotel units situated in a 12-storey tower, 36 double key villas and 8 beach front villas all for long-term lease. Investment costs range from VND 2 billion ($88,800) for a one-bedroom standard unit to VND 9.1 billion ($400,000) for a penthouse and from VND 7.97 billion ($350,000) to VND 20.5 million ($900,000) for a villa. In a press release, HTP said it guarantees a return of 8 percent per annum for 2 years of net lease cost for investors. KAHUNA is the fifth phase of the Ho Tram Strip development, adjoining the existing 541-room, five-star Grand Hotel, and the 559-room five-star Beach Club. To the west is the award-winning Greg Norman designed Bluffs Golf Course and the prestigious Gallery Villas residential development.

Other operators are still waiting to hear if there is any chance they could be added into the program, which is viewed as the missing link when it comes to pushing the country’s gaming industry to the next level.

 

Many foreign investors are believed to be interested in the market, but only if locals are also permitted to gamble.

In the meantime, projects are slowly moving ahead. Macau’s largest junket operator, Suncity Group Holdings, recently said it was buying a 34 percent stake in an integrated resort project in Hoi An South for an aggregate consideration of HK$600 million ($76.8 million).

SunCity partnered with Hong Kong’s Chow Tai Fook Holdings and VinaCapital Investment in the $4 billion resort, which consists of a casino, hotels, residential areas, and a golf course. According to the company filing, phase 1 development of the project is expected to be completed on or before mid 2019.

SunCity said the acquisition of the casino could help the company tap into the potentially expanding gaming market in Vietnam, which is in line with the group’s objective to develop tourism-related business in the country.

Also in the centre of the country, the provincial committee of Thua Thien-Hue has reportedly asked the government for permission to increase the investment capital of the Laguna Lang Co project to US$2 billion, as well as to open a casino in the complex.

If approved, the project is estimated to contribute $245 million annually to the local budget from 2021. It is understood that the Ministry of Defence and the Ministry of Culture, Sports and Tourism have already approved the plan, local media said.

The casino is expected to be implemented in the second, third and fourth phases of the project, with capital of nearly $250 million on a 2.6 hectare area.

The Laguna Lang Co project received an investment certificate from the management board of the Chan May-Lang Co Economic Zone in 2007, which was modified in June 2014.

The project has registered capital of $875 million and is spread over 280 hectares. It is designed to serve 400,000 visitors each year, and includes resorts, spas, hotels and restaurants, retail shops, golf courses and villas.