ate August 2014, Vietnam’s Ministry of Finance (MOF), with green light from the country’s ruling Communist Party, issued a draft decree to allow Vietnamese to enter the country’s two integrated resorts in the Van Don Special Economic Zone in the North and the Phu Quoc Island in the South. The draft decree delighted both international investors and casino operators, as well as the local gaming community.
The MOF, however, reversed itself when it submitted a new draft decree to the Politburo mid-June this year, ratifying that only foreigners and Vietnamese holding foreign passports were allowed to gamble at the venues. The decision sparked fears that the green jewel of South East Asia would no longer be considered as a new casino hub in the region, fer-tile ground for investors to bring in fresh money.
However, Professor Augustine Ha Ton Vinh has a different opinion. A senior advisor to leading international gaming companies, with vast experience in Vietnam's political system and gaming regulations, Mr. Vinh told Yogonet International that the new government in the country is only taking time to analyze the new scenario and get the whole picture before “opening the floodgates”.
What can you tell us about the recent ban by the Ministry of Finance in Vietnam prohibiting locals to access casinos in the country?
First, Vietnam's political system is such that the Politburo of the ruling Communist Party is the final authority on all major policies and projects. This includes whether or not casinos will be allowed, how many should be licensed, where and whether Vietnamese nationals should be allowed to come in. And, if allowed to come, under what conditions and age, and other financial requirements.
We also have to realize that the new Prime Minister and his Cabinet were installed only two months ago late this July. They must be busy with their new list of priorities. Gambling legalization is a sensitive issue and is not on the top of the list.
Gaming is a new industry in Vietnam and we don't have the kind of expertise and the regulatory framework that other gaming hubs possess
We don't have the experts to go one way or the other, so obviously, the government wants to be cautious to make sure there is no trouble along the way.
Second, in 2014, the country’s Ministry of Finance submitted to the Prime Minister a draft decree which allowed local Vietnamese in the casinos. The decree also established the minimum age and amount of USD 4B investors had to come up with to gain a license for an integrated resort.
In June this year, the MOF, however, decided not to include the above issues in the revised draft decree but has lowered the total investment amount for an integrated resort from USD 4B to USD 2B. This represented a big change
Furthermore, investors would have to invest at least USD 1B, which is 50% of that initial USD 2B investment for them to get a gaming license. The draft decree has no discussion about Vietnamese playing in the casinos. This came as a big surprise to investors and also to a lot of Vietnamese.
Third, the draft decree was recently forwarded by the Prime Minister to the Politburo. As I mentioned earlier, the Politburo will have the final say. If the ruling body decides to allow local Vietnamese to come in, it certainly has the power to do so. In this case, the Ministry of Finance will have to revise the latest draft. In June 2013, the Politburo has expressed its support for an integrated resort and casino in the Van Don Special Economic Zone in Ha Long Bay, and later on on the Phu Quoc Island. It also stated its intention to allow local Vietnamese to enter the casinos in these two locations.
In my opinion, the Politburo will not reverse its decision under normal circumstances and will soon re-confirm its original position. And the MOF will have the green light to release a much awaited decree, hopefully by the end of this year
What would be the positive impacts of establishing a comprehensive legal framework for gambling in Vietnam?
I think Vietnamese would be less likely to go outside of their country to gamble and the capital outflow will be significantly reduced. Foreign investors will be coming in and more money will be invested in the tourism industry. Vietnamese will have a chance to be entertained and the government will collect a good amount of gaming and special consumption taxes.
So you would not say that the government is saying a complete “No” to the gaming industry but it is mainly being cautious?
The government has allowed some form of gaming since 1992 and, as of today, the country has 8 casinos and about 45 gaming lounges in major hotels. There are other integrated resorts being planned.
I believe the new government will soon allow local Vietnamese to enter, on a trial basis, the two integrated resorts approved by the Politburo.
For now, they don't want to open the floodgates without knowing the positive aspects as well as all the negative social economic impacts of gambling on the country
How do you see Vietnam competing with other gaming hubs?
Vietnam has limited gaming experience as compared to Macau, the US and other Asian countries like Singapore, Malaysia or the Philippines. The country has a lot to learn and will have to make itself known as an international leisure and gaming destination.
Vietnam is a beautiful country with 95 million people and lots of pristine beaches and resorts. The people are young and hard-working. They deserve a break and entertainment opportunities so they can try their fortune and luck.
Investors look at Vietnam as a big and good destination for the gaming industry and also for MICE tourism.
Having a gambling industry here and offering integrated resorts to local and foreign tourists will boost the economy and turn the country into a very well-known international tourist destination. We don't have any experience, any good track record for this type of industry, so obviously, the government wants to take time to learn and make sure everything is in good order.
I believe Vietnam has a lot to offer once the ball is rolling
Are there specific groups that oppose gambling activities? If there are, which are those groups?
Any serious, controversial subject like gambling has always two sides of the story. A lot of people will say that Vietnamese have a propensity to gamble like other Asian groups, because they all believe in luck, faith and destiny. You don't know your luck until you try it.
On the other hand, when you talk about gambling history, you talk about illegal gambling, money laundering, prostitution and all sorts of social vices. Families were devastated by illegal gambling and underground activities.
You have to control and regulate gambling so that there are no underground gambling activities that can destroy families and society
When you talk about modern integrated resorts, you talk about a controlled environment where gambling hall is only a small part, about 3 to 5 percent of a big venue. We need to argue both ways to come to a social consensus.
We have to make sure that those who are against legalized gambling understand the good side of the integrated resorts, and the pro-gambling side, on the other hand, has to understand that Vietnam is still a traditional society, a country that is opening up to the Western world. Western and Vietnamese values need to co-exist.
What about money laundering risks or Mafia groups operating in the country if gambling is fully legalized?
With gaming projects in place, there might be more opportunities for money laundering and illegal activities to take place. The government will have to enforce current legal frameworks and impose restrictions to ensure no criminal gangs or activities will be tolerated.
What is the current economic situation in Vietnam?
The new government is doing everything it can to ensure the economy grows steadily. There will be no more national elections or changes in the next five years. Vietnam is a politically and economically stable country, has participated in numerous treaties, and signed several bilateral and multi-lateral trade protection agreements. Like other countries, as part of a global economy, Vietnam has some ups and downs. Seen as a strong and serious business partner, heads of state have visited Vietnam in the past few months including US President Barack Obama, India's Prime Minister Narendra Modi, and Francois Hollande of France.
Big powers want to do business with Vietnam because it is a country with 95 million people that plays a significant geopolitical role in the Asian Pacific region.
In money, economic terms, how do you think Vietnam would benefit from a comprehensive legal framework that regulates gambling allowing local wagers into casinos?
On the one hand, you will see local people staying in the country playing in integrated resorts. They don't have to go to Cambodia, Singapore or Macau to be entertained. With various integrated resorts in place, most players will stay in Vietnam.
On the other hand, the money investors will put in the integrated resorts will benefit local business and community, for instance, the construction industry and other peripheral activities such as hotel, food, transportation, and service sectors.
The government will certainly benefit from gaming taxes. Without such kind of industry, this source of income and other benefits will not exist.