Vietnamese Government Issues Local Gambling Approvals

The Vietnamese government issued its long-awaited Decree today (Friday 01/20/2017) confirming a three-year pilot program and setting out rules for citizens and casinos to participate in the trial scheme. Currently only foreign passport holders can gamble in the country’s 30 casinos and electronic gaming parlors.

The decree set into effect from March 15 2017 will allow people aged 21 or older with a stable regular monthly income of more than 10 million dong (~ $ 445) to gamble at certain casinos in the country.

Those casinos must have an investment of at least $ 2 billion dollars at least half of that channeled, among other requirements. Furthermore, the casino will need to be part of a hotel and entertainment complex. Fewer than 10 fully licensed casinos operate in Vietnam, only Ho Tram Resort Casino will currently meet Capex requirements, and only barely thanks in part to a second hotel tower priced at $ 75 million announced in May 2016, which should bring total expenditure to over $ 1 billion mark.

Good news for existing and potential investors in Friday’s decision is that it reduces the investment required from $ 4 billion to $ 2 billion, as well as enabling operations after only $ 1 billion has been disbursed.

However, Vietnamese casinos currently pay a corporate income tax of 20 percent and a consumption tax of 35 percent with banquet commissions being deductible, lowering the overall effective rate.

An upcoming development that will meet those requirements but may not meet location restrictions before the decree is renewed or replaced by law in three years is Hoiana and Laguna Lang Co Beach Resort’s potential Hard Rock or Melco Casino. VinaCaptial together with Chow Tai Fook and Suncity Group invested approximately $ 4 billion in the Hoi An casino resort. Laguna Lang Co could meet the capex as well with their current target of $ 875 million plus further investment.

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It is unclear whether a casino resort planned for the Van Don Special Economic Zone in Ha Long Bay in the north or on Phu Quoc Island in the south will meet a threshold of $ 2 billion over time or an initial disbursement rate of $ 1 billion, leaving daylight for international operators to consider. bid in three years.

Although the major developments already taking place in Vietnam may succeed with the foreign casino component — only if Chinese VIPs continue to seek alternatives to the Macau experience, the expansion of trial conditions will lend more stability to current plans and future proposals. Government reports show that Vietnamese casinos posted only US $ 62.3 million in gross gaming revenue for 2014. Worldwide, GGR topped $ 450 billion in the same year. Some projections suggest Vietnam’s GGR hit anywhere from $ 3 billion to $ 6 billion per year if all currently proposed casinos were licensed and locals were allowed to play what they wanted, wherever they wanted.