Vingroup to handle pilot project slated for launch next year on Phu Quoc Island
Vietnamese citizens will be permitted to gamble in a casino on Phu Quoc Island in a three-year pilot program expected to start next year, following approval by the central government, according to authorities in Phu Quoc, a popular tourist destination in the southern province of Kien Giang.
According to a report on Nikkei, the approval paves the way for other projects, including more casinos and auto and horse racing facilities, to cater to demand for betting entertainment in the country.
Leading Vietnamese real estate developer Vingroup’s facilities were chosen as the location for the casino pilot program, as the company is the sole investor and has developed related facilities on the island.
The casino, with capital investment of more than $2 billion, is part of an ecotourism and entertainment complex funded by Phu Quoc Tourism Investment and Development, a subsidiary of Vingroup.
The company’s resort and entertainment complex has been completed and is awaiting an official license to run the casino business, which is scheduled for startup early next year, according to a source in the company. The schedule for opening the casino was initially planned last December. The process to issue casino licenses in Vietnam requires several steps, such as investment and operations businesses.
The approval for the Phu Quoc facility was announced after criticism mounted about illegal gambling. Starting in March 2017, the government allowed locals to gamble at home in principle, but the relevant bodies are still working on details, including which casinos will be allowed to participate in the pilot project’s first stage.
Vietnamese who want to use the casinos must be over 21, able to prove a monthly income over 10 million dong ($427) and have no criminal record. But players will also have to pay a $50 entry fee and purchase a monthly permit costing $1,100.
In Vietnam, seven casino projects — Doson in the city of Haiphong, Aristo International Hotel & Casino in Lao Cai Province, Phoenix International Club in Bac Ninh, Crown International Club in Danang, the Grand Ho Tram Strip in Ba Ria-Vung Tau Province, and the Loi Lai Casino and Royal International Gaming Club in Quang Ninh Province — have been licensed for operation, but only foreigners will be permitted. Three others — Laguna Lang Co in Hue, Nam Hoi An in Quang Nam Province, and Corona Resort & Casino on Phu Quoc Island — are either under construction or awaiting operating licenses. Those projects have attracted investors from Canada, Australia, Hong Kong, Macau, Singapore and Vietnam.
Casino operators across Vietnam have applied to provide services to locals, but the Phu Quoc facility is the first to receive approval from the central government.
The legalization process for betting and gambling in Vietnam has been sped up as part of the government’s attempts to diversify sources of tax revenue, as access to international loans has been drying up.
The loosening of casino and sports betting is expected to attract both foreign direct investment and local private money to the industry. In May, Vietnam received $875 million for the first-stage development of a resort complex in Thua Thien-Hue Province from Singapore-based Banyan Tree Holdings. The investment scale is projected to increase to $2 billion by 2022, including an international-level casino. Some other investors, including U.S.-based Las Vegas Sands, Vietnam’s private cable operator Sungroup and golf resort operator FLC, are also showing interest in casino projects.
The gaming industry in Vietnam, including lotteries, slot machines, casinos and other betting, is expected to be a solid tax contributor if the activities are legalized and tightly controlled. The lottery segment, which is run by 64 state-owned companies, reported 64 trillion dong in revenue in 2014, contributing 20 trillion dong to the national coffers. Casino revenue in 2014 officially contributed 336 billion dong on revenue of 1.37 trillion dong, according to the Ministry of Finance. However, the casino market in Vietnam is estimated to be worth $1.2 billion, according to Union Gaming Securities Asia.
In a survey by the Institute of Regional Sustainable Development in 2015, more than 50% of respondents said allowing Vietnamese to gamble at home would boost tax revenue and eliminate the need to gamble overseas. It was reported that Vietnam loses around $800 million annually in foreign currency due to Vietnamese players travelling to Cambodia to gamble.
Industry observer and gaming professor Augustine Ha Ton Vinh said the move will significantly help boost foreign direct investment, improve local and regional tourism, and develop new skilled labor for the industry.
Meanwhile, Vietnamese authorities are handling a major online gambling case, after a crackdown on “using the internet to appropriate assets, organize gambling, gamble, illegally trade invoices and launder money” across the country. The case involved many organizations and persons who took advantage of information technology and the internet to organize online gambling through betting or card games. They attracted more than 42.95 million gambling accounts. The operators earned more than $384.4 million during the 28 months of operation.
Senior officials at the Ministry of Public Security, including former Lieutenant General and former Director General of the Police General Department Phan Van Vinh, and former director of the Anti-high-tech Crime Police Department Nguyen Thanh Hoa, were sentenced to prison for “abusing their position and power while performing their duties” in activities related to the online gambling ring.
At the meeting in November, Nguyen Anh Tri, a member of the national assembly, urged the government to place all gambling activities under its control and allow locals to bet and gamble, as long as they followed official regulations and legal frameworks, in order to reduce the illegal activities.