Vietnam is moving closer to allowing its citizens to gamble in the nation’s casinos as the government looks to boost tourist revenue and compete with the rest of East Asia for resort-driven foreign investment.
The Finance Ministry plans to submit the final draft of a new casino regulatory regime to Prime Minister Nguyen Tan Dung as soon as October, according to government sources, and approval is likely before the end of the year, they say. The decree is modeled on Singapore’s gaming regulations and would permit financially eligible Vietnamese to enter local casinos subject to an entrance fee.
Policymakers are seeking to replicate the success of Singapore and Macau in attracting gaming resorts and tourism. Vietnam’s government is grappling with the challenge of spurring an economy that risks missing this year’s growth target of 5.8 percent.
The government’s 2013 budget deficit widened to 5.3 percent of gross domestic product, compared with a planned 4.8 percent, according to the General Statistics Office. Tax cuts to help struggling businesses are estimated to reduce state revenue by an average 19 percent annually in the 2011-to-2015 period.
“Governments everywhere are considering gaming as a source of tax revenue, as well as an economic and tourism stimulus,” said Grant Govertsen, an analyst at investment brokerage Union Gaming Research Macau. “Ultimately, gaming is proliferating throughout Asia, and no government wants to be the last to the party.”
The government collected about 250 billion dong (US$12 million) in taxes from the five casinos operating in 2012 on gaming revenue of 900 billion dong, state radio reported on its website last week. There are six casinos in operation currently, with another licensed one yet to open. Only foreign passport holders are permitted to enter and gamble in the casinos.
Vietnam has a population of almost 90 million, according to World Bank data.
“There are many Vietnamese who gamble at casinos in Singapore and Cambodia, and it’s obvious that we’ve lost some state revenue here,” said Phan Thi Thu Hien, deputy head of the ministry’s Banking and Finance Department. “We’ve studied what regional countries have done and think we should do the same. These changes would help increase government income.”
Govertsen said, “Well-established gaming operators are going to need assurances that locals can participate in gaming. The regulatory environment will need to be fair enough and stable so that any development can be competitive enough to attract foreign customers.”
Under the draft proposal, Vietnamese who are at least 21 years old, and have “sufficient financial ability” will need to pay an entrance fee to gamble in casinos, according to Hien. The financial-assessment criteria and entrance fees will be specified by the prime minister in separate regulations after the decree’s approval, he said.
In Singapore, citizens and permanent residents must pay a S$100 (US$80) daily levy to enter the casinos, or S$2,000 for an annual pass.
