In 2016, the government of Vietnam established a three-year pilot program allowing locals to gamble in select casinos in the country. But according to some analysts, the program probably will never be widespread, despite a clamor for permission from casino owners.
“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,” said Saponti Baroowa, associate director of business intelligence at Dezan Shira & Associates in Ho Chi Minh City, in an interview with Asia Gaming Brief.
“There are these pilot programs, (which) gives us the view that it’s something the government is experimenting with,” Baroowa said. “But I think it’s highly unlikely to be opened up to domestic big spenders any time soon.”
Ben Lee, managing partner of iGamiX Management & Consulting, said the government, which is “vehemently against gambling by locals,” is unlikely to allow a locals segment to expand.
AGB reported that foreign investor interest in Vietnam remains strong, but the market is “complicated” and the cost of entry prohibitively high: a minimum $2 billion investment. Gaming giants including Las Vegas Sands have been known to have looked at Vietnam and then walked away due to “restrictive operating conditions.”
Prior to the onset of Covid-19, Vietnam was enjoying a tourism boom. A record 18 million tourists visited in 2019, up 16 percent from the previous year, and Chinese travelers accounting for 5.8 million of the total. The country appeals to elite travelers thanks to its landscape, multiple UNESCO World Heritage sites and unique culture, a blend of Asian and European. Lee calls Vietnam a “sleeping giant” when it comes to travel destinations.
“One of the things we observed is that the Chinese love Vietnam,” he said. “It’s a culture that has a lot of familiarities, the food is almost the same, but there’s a twist, with the French influence.”
But the regulatory demands amount to a big stop sign for most investors, said Bernstein Research analyst Vitaly Umanski. “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.”
“Without a local market, a multibillion-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 multibillion-dollar property without a local market there’s no way it works.”
China’s crackdown on outgoing travel by gamblers also makes Vietnam a hard sell for investors. “With a crackdown on VIP, there’s going to be very few people from China who are going to go all the way down to Vietnam to have an experience that’s not the real Macau,” said Alidad Tash, managing director of 2NT8. “Gaming is not the profit driver for the Hoiana project nor the Van Don project. It’s the anchor and the draw card, but it’s the real estate development card where they will make the majority of their return on investment.”
