Could computerized lottery affect provincial revenues?
A showdown is brewing between traditional lotteries in South Vietnam and the American-style Viet Nam Lottery Company, or Vietlott.
The American-style computerized draw game, which launched in Vietnam last July, allows players to randomly choose six numbers to create a six-number ticket. Each ticket costs VND10,000 (US 44 cents) and jackpots start at VND12 billion (US$537,000). As in the U.S., jackpots are rolled over if no one wins.
According to Vietnam.net, Nguyen Thanh Dam, the company’s deputy director, said lottery sales rose 4.6 times in less than two months from VND159 billion (US$6.9 million) to VND734 billion (US$32.2 million) from September to November of last year.
The computerized lottery is a project of Vietlott and what Vietnam.net called “an indirect subsidiary” of Malaysia-based Berjaya Corp Bhd, which won an 18-year operational license in January.
According to TuoiTreNews.vn, traditional lottery companies don’t welcome the competition and are fighting back. At a meeting this month in Soc Trang Province, industry leaders claimed that Vietlott has “committed numerous violations,” including penetrating provinces where the computerized lottery is not authorized.
According to the news outlet, unauthorized dealers buy the official tickets and redistribute them to sellers in other provinces for VND11,000 or VND12,000 each, a practice traditional lottery companies say is against the law.
Vietlott Deputy General Director Nguyen Thanh Dam fired back, warning his rivals to “consider your words” because “you can only accuse us of breaching the law with an official conclusion from an authorized entity in hand.”
He added, “We cannot just go to any province and ask lottery ticket vendors there to follow the rule,” and said Vietlott has worked to prevent conflict between its product and traditional lottery tickets.
“We set our commission rate at 8 percent compared to 15 percent of the traditional companies, and while we are allowed to earmark 60 percent of revenue to pay winners, we set that rate at 55 percent,” Dam said.
Nguyen Hoang Duong of the Ministry of Finance said the ministry “has never favored computerized lottery over the conventional product,” but added that Vietlott’s success has been “impressive.”
Because traditional lottery companies send most of their revenue to local governments, there is concern that the success of Vietlott could reduce revenues generated for the southern provinces. “How the provincial budgets are affected exactly, and how to resolve the issue are leaving regulatory officials scratching over their heads,” Duong said. He asked traditional lottery companies to “share the hardship and stay cooperative” while regulatory agencies work to resolve the issue.
