Malaysian investors give up Vietnam casino dream

In its official statement, Genting said on December 21, 2010, GENM informed about a plan to cooperate with a Vietnamese partner to seek the investment opportunities in the entertainment, hotel and resort industry in Vietnam. Genting Malaysia Berhard, or GENM, a subsidiary of Malaysian Genting Group, has announced its decision to withdraw from the Nam Hoi An IR project in the central province of Quang Nam, a "project with casino” as said by the business circle.

And now the company wants to inform that the cooperation activities have finished by the two parties, and that GENM now does not pursue any other interests in Vietnam.

The information that the Malaysian investor quits the project has surprised many people. Two years ago, the information that Genting would invest in a project with casino in Vietnam once stirred up the public, because it has always been very difficult to obtain a license for a casino project.

In Vietnam, casino spells "gambling” which has been prohibited. Not seduced by the huge sums of investment capital offered by foreign investors, the government of Vietnam has said "no” to many casino projects.

In fact, developing casinos remains a "conditional business field” in Vietnam, while the country does not encourage the investment in the field.

Genting, after obtaining the investment license, took the next steps in its investment plan, showing that it was really a serious investor. In July 2011, the Vietnamese partner disbursed 15 million dollars to the Quang Nam provincial authorities which would be spent on the compensation for site clearance.

This is a super project with the registered investment capital of four billion dollars. The IR is expected on the 1500 hectare coastal area of Quang Nam.

It’s still unclear what the involved parties would do after the withdrawal of Genting Group. The project is now under the first phase of implementation, which means that the leave of the investor would not much affect, because the project would still be undertaken with the new investors to be chosen.

Genting has not revealed the reasons behind the withdrawal. However, analysts have noted that the decision has been released after Vietnam opened the draft of a legal document, setting very strict requirements on the IR investors.

Under the draft document, investors must invest at least four billion dollars in an IR project, and have at least 10 year experience in IR management. The area for casinos must not be bigger than three percent of the total area of the IRs, while the license for casino would be granted only after investors finish the construction of other items in the IRs.

Especially, the draft document says that casinos would be open to foreigners or Vietnamese people with foreign citizenship.

Commenting about the document, analysts say that the requirements on the finance capability would not be a problem to the foreign investors in the casino industry. It is the regulation that Vietnamese are not allowed to enter casinos, which has disappointed the investors.

With the regulation, investors would have to reconsider their investment projects and the expected profits. The analysts have also said that it is not by chance that Genting made such a decision at this moment.

Genting proves to be the investor who is really interested in the opportunities in Vietnam. It also showed the interest in the casino project announced earlier this year by the Quang Ninh provincial authorities.