Government of Vietnam will likely hold onto law prohibiting citizens from gambling, concluding three year pilot project
According to Asia Gaming Brief, Vietnam’s casino operators have appealed to the government to allow citizens of the country to gamble, due to plummeting revenue caused by the closure of international borders. Currently, gambling operator’s are legally only able to serve customers with a Vietnamese passport as part of a three-year pilot project. Formerly, only foreign citizens were allowed to gamble.
Vietnam’s government has imposed regulations which mandate a minimum investment in casinos of $2 billion. The number is extraordinarily high, considering the establishments will only be allowed to provide service to foreigners. Such a hurdle deters investors from acting, despite interest of potential foreign entrepreneurs to be high. One potential investor had been Las Vegas Sands, who announced a withdrawal from all plans following the announcement of the threshold.
Vietnam’s government has been running a three-year pilot program which allows the local market to gamble in Phu Quoc’s Corona Resort. Casino owners have yet to hear from the government for the programme to expand.
Saponti Baroowa, associate director of business intelligence at Dezan Shira & Associates in Ho Chi Minh City said, “The government’s main concern would be not to expose the local population to potential social risks from gambling and so I do not think there will be a significant shift in government policy in the near term,”.
“There are these pilot programs, but that gives us the view that it’s something the government is experimenting with, but I think it’s highly unlikely to be opened up to domestic big spenders any time soon.”
Vietnam relies heavily on tourism, and as a result, Ben Lee, managing partner of iGamiX Management & Consulting says he believes that Vietnam is a “sleeping giant” as a destination, which will continue to be popular with the Chinese once borders reopen, but agrees that a $2 billion investment in a foreigner-only market would make most resorts unsuccessful.
Pre-pandemic, Vietnam counted 18 million tourists in 2019, a 16 percent increase from the past year. In particular, Chinese visitors seem to enjoy travels to Vietnam, comprising 5.8 million of the visitors.
Despite the popularity as a tourism destination, analysts have said the regulations will hinder a strong development of the gaming industry.
In SiGMA’s virtual roadshow in Manila held earlier this month, Vitaly Umanski, Bernstein Research analyst stated, “The problem you have in Vietnam is that the government has unrealistic expectations around what needs to get built and what they are putting on the table regulatory wise,”
He added, “Without a local market, a multi billion dollar resort doesn’t work. You can get away with $100 million – $150 million property if you can target foreigners and it’s easy to get there, the tax looks good and the regulatory environment is loose, that works, but if you don’t have those things and you have a multi billion dollar property without a local market there’s no way it works.”.
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