Selected casinos still in development
Vietnam is moving ahead with a three-year program that will allow residents of the country to gamble in at least two domestic casinos. The plan will allow citizens over 21 with a monthly income of at least VND10 million (less than US$450) to enter the casinos and gamble. Local gamblers must have no criminal record or pending criminal charges. They must also pay an entry fee of about $45, effective for 24 hours, or $1,100 for a monthly unlimited pass.
“After three years of soul-searching and policy debates, the ruling party’s leaders believe now is the time to move ahead, creating a new gaming industry” for Vietnam, Professor Augustine Ha Ton Vinh told Yogonet.com. He conducted a study of the industry that shows Vietnam is losing as much as $800 million a year in tax revenue from gamblers who cross the border to Cambodia.
Though the measure takes effect in less than two months, the casinos, to be located in the Van Don Special Economic Zone and Phu Quoc Island, are still under development, with no opening dates announced as yet, according to GGRAsia. The trial period will officially begin when the casinos open. After three years, the government will decide whether to continue the program or possibly expand it.
Neither of the planned locations “are readily accessible by persons living in major metros of Hanoi and Ho Chi Minh City,” noted Grant Govertsen of Union Gaming Asia Securities. “However, we do believe that the language of the decree could also allow the Grand Ho Tram, around two hours from Ho Chi Minh City, to apply to be part of the locals pilot.”
As early as 2014, management at the Grand Ho Tram on the country’s southern coast told GGRAsia the property hoped to be part of a pilot program for locals to gamble.
The three-year test run is bound to siphon off some business from Cambodian casinos, particularly those clustered along the border with Vietnam. “Of course, we will definitely get some effect by the new move from the Vietnamese government,” Ros Phearun of the Cambodian Ministry of Economy and Finance told the Khmer Times. “But, it doesn’t mean that it severely affects the whole industry here, because they will only let local people gamble at two selected casinos.” He said those casinos “are really far from us” but added, “In the future if they open more there might be a significant impact.”
Lim Kim Seng, chairman of the Cambodian casino company Lucky89 Group, told the Phnom Penh Post the impact could be devastating, especially in gateway cities like Bavet, whose casinos have traditionally catered to Vietnamese barred from playing at home.
“Numerous casinos will close down or go bankrupt because of this,” he warned. “It’s not just the casinos that will suffer, but hundreds of jobs will be lost and real estate prices will collapse.”
And Anthony Galliano, CEO of Cambodian Investment Management, agreed that the plan would be “a singular severe blow to the Kingdom’s outskirt casino towns.”
He described the Vietnamese decree—along with amended gaming regulations on tap from the Cambodian government—as no less than a “death knell for the already struggling border casinos.” Cambodian casinos could be hit this year with a higher tax rate and well as increased capital requirements, the Cambodia Daily reported.
“A good deal of these casinos are on life support,” said Galliano. “What is really needed is government incentives, rather than a regulatory blow, to save jobs and prop up the industry.”
Cambodia’s casino industry generated $43.4 million in tax revenues during first 11 months of 2016, according to the Finance Ministry. About a quarter of those taxes came from casinos along the Vietnamese border.
The new decree in Vietnam is sure to stoke interest in the jurisdiction among global gaming companies such as the Las Vegas Sands Corp., Genting Bhd, NagaCorp and Penn National Gaming, reported Reuters.
