Vietnamese government is trying to attract more gambling investments with relaxed gambling restrictions.
The change in Vietnam gambling laws, which allows local citizens to visit one of the casinos in the country for a test period, laid the beginning of intense campaign of the authorities to attract new gambling investments.
The Communist party took the decision to allow Vietnamese, who fulfill certain criteria to gamble in a casino, which will be built in the Van Don Economic Zone in Quang Ninh Province, which is bordering with China, in 2013.
Dao Hong Tuyen, local magnate, and the US ISC Corporation are investing in the project, which is estimated at around US$7.5 billion, and it consists of casino, different sports clubs, convention center and marinas.
Bui Quang Vinh, Minister of Planning and Investment, commented that: “For less than a year, since this legislative change, at least 10 provinces are competing for casino licenses. I’m under a lot of pressure because of this race, which is also wearing me down.” Short-term goals
Specialists in the region expressed their opinion that the current situation with casino building competition shows the reality that local authorities are only interested in short-term achievements, as they are appreciated only according to this performance.
Vietnam lawmakers are introducing changes to the gambling laws, in order to attract foreign investments
• Vietnamese citizens are allowed to visit one of the casinos in the country for a test period
• Local authorities are only interested in short-term achievements
• Casino developers can only operate a casino if they develop luxurious resorts and invest at least $4 billion, along with it
Vietnamese economist, who wanted to remain unnamed, commented for the media: “Mayors have been judged by how much their cities have grown, regardless of whether it is sustainable. So instead of focusing on projects that added value in the long term, they simply concentrated on boosting GDP figures. As a result, they ignored the environment, ignored long-term planning.”
Analysts added: “Given the entrenched gambling culture in Vietnam, the social repercussions of the casino development frenzy could far outweigh the US dollars it could bring about.”
Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, commented: “I don’t understand why local leaders are so crazy about these casino projects.”
Attracting the locals
Vietnam’s officials naturally are very upset about the fact that local players use illegal online casinos in Vietnam or go abroad, in Cambodia for example, and spend their money there.
Nguyen Thi Kim Ngan, deputy speaker of the National Assembly, said: “If locals are barred from gambling at home, they will just find other venues in Cambodia, Macau, or Hong Kong.”
Additionally: “Locals should be allowed to gamble in casinos in Vietnam to prevent the outflow of foreign currency, and there is a pressing need to regulate that.”
It is not surprising that the new casino bill is introduced right at the moment, as the country’s economy is not in the best condition at the moment and fresh investments are highly necessary. The bill will be voted soon by the National Assembly and the outcome will most probably be positive for the casino developers.
Asia is currently very hot market for gambling activities and naturally Vietnam with its 90 million population is extremely tempting.
With lifting the ban on gambling for locals, a lot of foreign investors are looking at the country and are willing to fulfill the requirements in order to be allowed to operate a casino, namely building along luxurious resorts with hotels, malls, restaurants, etc. Additionally, they have to invest at least $4 billion and have minimum 10 years’ of casino operating experience.
The latest addition to the casino market in Vietnam was the luxurious casino-resort The Grand Ho Tram Strip, which is part of a $4.2 billion investment, aiming at attracting foreign tourists. It became the sixth casino in Vietnam when it opened in 2013, in Ba Ria-Vung Tau Province.
Karl John, leading expert at Asia Trade Experts, which is specializing in advising casino developers in Vietnam, commented: “Vietnam does have the potential to be a regional hub for casinos but it will have to play catch-up because there are many, already established casinos.”
He added: “The biggest competitor is Macau, where anything goes. Is the Vietnamese government willing to loosen control and allow the good times to roll? Or will they insist on casinos with Vietnamese characteristics?”
For now these questions are unanswered, but in general analysts think that regulations are still extremely important, so that the industry is in good shape.
Zach Abuza, Southeast Asia expert, said: “I cannot point to any casino in the Southeast Asia that has reinvested its revenues in non-gambling ventures or made investments in their host communities.”
In general, anti-gambling activists stress on the fact that huge casino projects don’t employ as many people as they claimed to, and typically they offer mostly low paying jobs.
They also argue that one big casino usually manages to acquire other investments that are needed for infrastructure for example, from other sectors, which will provide more sustainable growth in the long run.
Is Vietnam ready?
Other concerns regarding the spread of casinos involve problem gambling, larger debts and more crime. Abuza, said: “What often goes unreported is the link between casinos and organized crime. Look no further than the casino in Cambodia: this place has been laundering Southeast Asian drug money for nearly two decades.”
Will all these examples of how casinos may affect different regions, it seems that Vietnam might not be ready to cope with all the additional issues that rise after the opening of a new casino.
Amruta Karambelkar, Vietnam expert, said: “The social-environmental costs of these projects need to be critically taken into account. Singapore is successful because of its governance. In the present state of affairs in Vietnam, the economic benefit visualized through gambling is an over-expectation.”