A casino in the southern island of Phu Quoc is set to be the first location in Vietnam to permit local people to gamble on its premises, contributing to the creation of a new multi-billion dollar industry in Vietnam, which has so far endured a turbulent path.
|All bets placed on Phu Quoc casino, illustration photo source AFP |
Key points of Vietnam’s casino legislation
- Casino operators must open registers or issue electronic cards to monitor visitors leaving and entering their premises. These registers or electronic cards must be kept for a minimum of two years for inspections by local authorities if required, or five years for operators which are permitted to allow Vietnamese citizens.
- Dossiers for Vietnamese citizens to present their financial abilities to play in casinos according to Article 12 of Decree 03 need to contain one of the following documents:
- Documents proving taxable incomes of Level 3 or higher as prescribed in the Law on Personal Income Tax: A certified copy of the personal income tax declaration already finalised or finalised by the tax office, or a confirmation of tax obligations by tax authorities proving that players have had taxable incomes of Level 3 or higher for one year before playing at the casino.
- Documents proving a regular income upwards of VND10 million ($434.78) per month.
- Players are responsible for the accuracy and truthfulness of the documents when presenting them to the casino for entry.
Management of conventional money
- At least five working days before putting conventional currency into the business, the casino operators must register its form, code, quantity, and type with the local finance departments and the tax office directly managing it.
- The casino operator has the right to suspend the use of conventional currency which was registered at the state management agencies, according to the management requirements.
Principles of accounting and management of turnover and expenses of casino operators
- Casino operators must separately account revenue, expenses, and profits related to casino operations and must separately monitor these items in the accounting system and financial reporting.
- The determination of turnover and expenses for declaration and tax payment for casino business activities shall comply with the current tax law.
The integrated resort and casino complex, with Vingroup holding a 50 per cent stake, has been selected as the first venue to take part in a three-year pilot programme that will see the longstanding ban on locals gambling in casinos lifted. The complex is set to begin operation in 2021. Actually, the Phu Quoc complex is expected to mark a wider push for major casino developments across Vietnam, which so far has been a slow process.
On January 16, 2017, Prime Minister Nguyen Xuan Phuc signed Decree No.03/2017/ND-CP, which took effect on March 15, 2017, allowing locals’ entry in casinos in a three-year trial. The Phu Quoc complex and another in-development project in the northeastern province of Quang Ninh were tipped as being the only venues that would be allowed to participate in the trial.
There are numerous hopeful gaming resorts in the works throughout Vietnam but the government has so far only granted one of the projects the go-ahead. It is believed that the pilot can eventually lead to others.
Jones Lang LaSalle, an American specialist real estate service, said in a recent report on the future of the Vietnamese gambling industry that major international operators have been expectantly eyeing the local market for some time. According to the firm, the lifting of a ban that prohibits locals from playing in casinos would have a favourable effect on the industry. It is believed that more international investors could be attracted to the Southeast Asian country and will invest further into the wider tourism industry.
Augustine Ha Ton Vinh, an expert in the casino business, told VIR, “The government has allowed Vietnamese people to play in the casino in a pilot project. If they want to attract international investors, it should also consider geographic factors such as the location. If only remote areas are being considered, it is really hard to attract foreign investment, especially world-class casino investors.”
Vinh explained that in other countries, major developers have built and operated well-known casinos in multi-functional complexes. These have not been built primarily for gaming, but are combined with a number of other facilities such as conference halls, hotel rooms, restaurants and other leisure facilities.
“Those complexes operate very successfully and the governments are able to invest profits raised from casinos back into public facilities, therefore benefiting society as a whole. However, many gambling outlets are located in the downtown areas of major cities,” he said.
Stephen A. Crystal, a former Las Vegas casino owner, said an operator’s financial success in the Asia-Pacific region is strongly dependent on the right planning. Thus, a good strategy could encourage investors to move forward with their plans and pursue new gambling related opportunities.
Crystal said the risks and challenges for any investor entering Vietnam are already well established, but the potential benefit of being the first mover in the new market is huge.
“I returned to Vietnam earlier this year and had high hopes for a casino development deal I signed in Phu Quoc,” he said, revealing little information about the specific project.
The conditions for the local trial include a number of fiscal hurdles, including a daily casino entry fee of VND1 million ($43.47) or a monthly pass for VND25 million ($1,086). Gamblers also have to demonstrate a monthly income of at least VND10 million ($434.78).
Casinos will be required to keep a detailed record regarding the comings and goings of local people to ensure accurate data for the local authorities to deduce the results of the trial.