Gaming tax will rise January 1
The government of Vietnam is wooing investors who would develop new mega-resorts with gaming in the country. But can Vietnam—which bars almost all of its residents from gambling—really import enough tourists to sustain a vastly expanded industry?
A new report in Forbes magazine examines the conundrum. The country requires that new casinos be located in integrated resorts with a total investment of $4 billion, but officials have designated five “relatively remote locations” for the IRs.
In addition, Vietnam will increase gaming taxes from 30 percent to 35 percent in January 2016, making the tax higher than Singapore, the Philippines, South Korea or Cambodia. Meanwhile, the government has been slow to make progress in expanding the casino industry; along the way, Genting pulled out of a Chu Lai project in 2012, and MGM withdrew from a Ho Tram Strip project in 2013.
While the law bans residents from gambling, the government has claimed it loses $800 million a year because Vietnamese nationals travel abroad to play. But more gambling for locals may be on the horizon. According to AGBrief.com, legislation that would allow Vietnamese to gamble for the first time in their own country could be a “game changer” for the industry, though some parts of the legislation were seen as unreasonable. Among them is a stipulation that Vietnamese citizens must show proof of minimum monthly salaries and show “financial competence” or some valuable assets before they can enter and play.
In May, Banyan Tree’s Laguna Lang Co resort in central Vietnam issued a request for concepts for Phase II of a resort near the international airport in Danang. The resort, which already has 500 rooms and a championship golf course, would ultimately add a casino. “The selection of a gaming operator is expected to coincide with the convening of the National Assembly in early 2016 and subsequent discussions about how to proceed with gaming and tourism development, and the creation of a more robust regulatory regime and gaming licensing policy,” the developer said in a press release.
Forbes notes that “what’s worked in Vietnam are casino enterprises established before the requirement for $4 billion integrated resort investments and sited in more favorable locations.” Donaco International’s Aristo International in Lao Cai “started small and scaled up based on business, not government mandates,” the publication pointed out. “Their small size enables them to succeed by targeting niche markets, such as Silver Heritage’s Phoenix International Club in Bac Ninh outside Hanoi that focuses on expatriates working within driving distance and Crowne International Club in Danang with strong links to Macau junket promoters and a location just seven miles from the city’s airport with four daily flights to/from Macau.”
Vietnam has had seven small-scale casinos and some 50 electronic betting shops, all of which serve foreigners only. The biggest gaming hall is the Grand Ho Tram Strip in the southern province of Ba Ria-Vung Tau.
