Investors bet on casino decree
The decree, seven years in the making, could potentially add $800 million in tax revenue to the state budget.
The draft has raised high hopes among foreign investors in the casino business as, under existing rules, casino entry is limited to foreigners and overseas Vietnamese or Viet Kieu.
“We hope that this will be the last draft, already we have seen a lot of revisions before its submission in June,” Nguyen Huy Dat, deputy director of the Ministry of Finance’s (MoF) Lottery and Gambling Division, told VIR.
Another expectation among casino operators is that the total investment capital of a casino project would be cut from $4 billion to $2 billion, with a condition that disbursed capital must reach at least $1 billion.
“We took these issues into consideration when we composed the draft. However, the final decision will be made by the government,” Dat added.
Since drafting began in 2009, this decree has been subject to enormous controversy over whether or not the country should allow Vietnamese citizens to play at casinos.
In fact, long-delays in the approval of this decree has been a barrier to casino businesses entering Vietnam, as the regulation which bans locals from playing at casinos prompted them to game overseas, resulting in a loss of an estimated $800 million annually in much needed tax revenue for the country.
Unless the draft decree is approved, the government will not consider licensing new casino projects. This has made investors nervous. High hopes are now pinned on the potential of the market and the possibilities of easing the regulations by the government.
The $4 billion South Hoi An integrated casino resort kicked off in April 2016. Invested by a joint venture between VinaCapital, Macau-based SunCity Group, and Hong Kong-based Chow Tai Fook, it is the second largest casino in Vietnam after the $4.2 billion HoTram Strip resort and casino complex, located in the southern province of Ba Ria-Vung Tau. Ho Tram has recently signed a contract with CotecCons to invest an additional $75 million in expanding the complex.
“Casinos are our second biggest revenue maker after the hotel and resort businesses. Owning the largest casino venue in Vietnam, Ho Tram is waiting for the adoption of the decree to improve our casino business performance further,” said Michael Kelly, executive chairman of Ho Tram Project Company Limited.
In a similar move, Singapore’s Banyan Tree Holdings, one of the world’s leaders in hotels, resorts and luxury apartments in the Asia Pacific, following its first proposal on casino investment in the Laguna Lang Co resort complex in the central province of Thua Thien-Hue, reiterated the proposal at a mid-March meeting with Minister of Finance Dinh Tien Dung.
“Our US partner has shown considerable interest in running a casino business in the Laguna Lang Co. Once we get the license, we would work with our partner on the details of the plan,” an official at Banyan Tree Holdings Limited, told VIR.
According to statistics by the Ministry of Finance, as of end-2014, Vietnam licensed eight businesses to run casinos. The government has also recently allowed the development of two large-scale casino projects in Van Don in the northern province of Quang Ninh, and in Phu Quoc of the southern province of Kien Giang.
A recent study by the Institute of Regional Sustainable Development (IRSD) showed that if foreign direct investment in casino increases by $3 billion, Vietnam’s GDP will expand by 0.58 per cent.
