While most of the industry talk in Vietnam in recent months has centered on proposals for big-ticket destination resorts, the country is quietly building a flourishing industry around small casinos restricted to holders of foreign passports.
Vietnam currently has seven licensed foreigner-only casinos and allows a limited number of slots in five-star hotels, most of them in the capital of Hanoi and in Ho Chi Minh City. There are also machine gaming venues in Da Dang and Vung Tao.
Five casinos are in the north of the country, mainly on the coast or close to the Chinese border, with the biggest at Halong Bay some 150 kilometers east of Hanoi, featuring 18 live table games.
The remaining two casinos are located on the southern coast at Ho Tram, about 90 kilometers from Ho Chi Minh City and on the central coast at Da Nang.
Mike Bolsover, chief executive of Asian casino operator Silver Heritage, estimates the market at US$275 million-$300 million, and it’s believed to offer considerable scope for expansion, fueled
mainly by the potential to attract Chinese high rollers. Currently, Vietnam has only a 0.1 percent share of Asia’s gross gaming revenue, according to Fitch Ratings.
Among the new developments are a venue reported to be under Korean management, Ratana Casino Resort, that plans to open in March in Ratanakkiri on the Cambodian border with 80 hotel rooms, 60 table games and 60 slot machines, and Lao Cai Casino in the north of the country near the Chinese border is due to open a new property with 428 hotel rooms, three restaurants and at least 26 table games before April.
Lao Cai is dependent on traffic from China’s Yunnan province, home to more than 45 million people and is expected to benefit from improved infrastructure, including a new expressway that will cut the travel time from the Yunnan capital of Kunming to four hours from seven.
Lao Cai’s owners, ASX-listed Donaco International, report about US$40 million per year in gaming revenue, 80 percent of it from high rollers. The casino has relationships with more than 20 junket operators
A new highway between Lao Cai and Hanoi is also likely to help the company to attract more visitors away from the capital, although Vietnamese citizens aren’t permitted in casinos, a policy some experts believe will be altered before long.
For the time being, total international arrivals in the first 11 months of last year rose 10.2 percent to more than 6.8 million, with Chinese visitors increasing to 1.7 million, though Russians still make up the majority of the tourism market.
After a period in limbo, VinaCapital is reported to have found a partner to replace Genting Malaysia, which held 20 percent of the venture, and now also appears set to move ahead with plans for a $4 billion integrated resort development south of Hoi An in the central province of Quang Nam. The project, known as South Hoi An, will include five-star hotels and luxury residences and will be the largest tourist destination in Quang Nam, which is already home to several resorts on the South China Sea coast. It was downscaled last year from 1,500 hectares to 1,000 hectares
VinaCapital has not yet named its investment partner, but local press reports have identified it as Casinos Austria International.
In a further sign of foreign investment interest, Rockefeller family-backed Rose Rock Group will help develop a $2.5 billion residential and 700-room luxury hotel project on the south-central coast featuring 350 marina berths.
Investors are also excited about the prospects for the market in Danang, which currently hosts one casino (the former Crowne Plaza, now known as Silver Shores) and a machine gaming club at the Furama Hotel. The coastal city has the third-largest airport in Vietnam and is only an hour and a half from southern China.
