Local racetrack projects remain mostly on paper

September 28, 2018 | 10:00
While the loosening of investment conditions on horse and dog racing as well as international football betting are said to stack the odds in favour of investors, they still hit major snags in realising their investment plans in Vietnam. Ngoc Oanh reports.
local racetrack projects remain mostly on paper
While betting on horse and dog racing is now allowed, racetrack projects are having a hard time taking off, Photo: Le Toan
local racetrack projects remain mostly on paper

The Ministry of Finance (MoF) is currently revising the governmental Decree No.06/2017/ND-CP on betting business in relation to horse racing, dog racing, and international football, which officially took effect on March 31, 2017.

The long-awaited decree is expected to allow Vietnamese citizens to bet on international football matches and on horse and dog races in Vietnam. The decree is also expected to pave the way for foreign and domestic investment in race courses and other gaming services.

After issuing Decree 06, the local authorities completed and revised policies to lure in investment flows. Along with the government, cities and provinces nationwide are also interested in calling for investment in horse and dog racing.

Nguyen Van Hieu, a representative of the Bac Ninh Department of Planning and Investment, told VIR that Bac Ninh is one of the leading recipients of foreign direct investment (FDI) in the country. At present, almost all foreign-invested projects are in the industrial sector, so Bac Ninh wants to lure investment into the horse and dog racing business, with the aim of creating new revenue streams in the province.

To date, numerous investors have expressed interest in developing horse and dog racing projects in Vietnam, but none have been implemented under the new decree due to numerous reasons.

Most recently, at a working session in late July, Chairman of Bac Ninh People’s Committee Nguyen Tu Quynh issued an ultimatum to investor Golden Horse, requiring it to complete procedures for the licensing of its $500-million Golden Horse racetrack project, announcing that the province would otherwise hand over the land allocated for the project to other investors.

According to Quynh, Bac Ninh offered to help the South Korean investor to complete administrative procedures as well as affirmed to accompany it during the construction process. However, the project is still in limbo, impacting the province’s socio-economic development plan.

Despite constantly expressing determination to develop the project, according to Hieu, Golden Horse has yet to complete any legal procedures. “Golden Horse has not proved its financial potential. It said numerous times that it would establish a legal standing and a subsidiary, but to date, nothing has been done. In my opinion, the reason behind the delay in implementing the project is that Golden Horse has yet to find a partner to join the large-scale project,” Hieu stated.

Besides Golden Horse, a number of other South Korean investors have expressed interest in opening a horse racetrack in Vietnam, including G.O. Max I&D, which has plans for a $1.5-billion racetrack project in the northern province of Vinh Phuc.

According to the plan, the investor will build the largest track in Vietnam. The project includes the racetrack itself, a 72-hole golf course, a sports entertainment complex, a horse riding and polo club, as well as apartments and villas built on an area of 750 hectares of land. The racetrack will take up 200ha of this area and will hold three races per week.

However, though the two parties signed the memorandum of understanding for the project in early 2017, construction has yet to begin.

A representative of G.O. Max I&D told VIR that the company is awaiting a final decision. However, the representative added, the company maintains a good relationship with its financial investors and partners, and will make sure the project is ready to start soon.

“We expect the government to seriously evaluate and investigate all conditions of potential applicants, and then choose the best one, who fully understands and studies this work. The project is set to begin operations 36 months after the start of construction,” the representative added.

Hanoitourist Corporation is also seeking to build a horse racetrack in the capital’s suburban district of Soc Son. The track will cover 180ha of land, with an investment of $500 million. Other projects include Golden Turf Club Pty., Ltd.’s $100-million project in the central province of Phu Yen and Hong Kong’s Matrix Holdings Ltd.’s planned horse racing centre in the central city of Danang. However, not all projects of the type in Vietnam are experiencing difficulties.

Vietnamese-Australian Nguyen Ngoc My, chairman of VABIS and general director of Sports and Entertainment Services JSC, which is the developer of the Thien Ma-Madagui horse racetrack in the Central Highlands province of Lam Dong and a greyhound racetrack in the southern province of Ba Ria-Vung Tau, said, “I know that after the issuance of Decree 06, a wave of foreign investors came looking to enter this business field. However, we think that we have the advantage.”

“Doing business in this field is not just about making profit, but creating value for the whole of society, especially the local residents around the project. We have the advantage because we understand the customs and hobbies of the local residents, as well as the society. That is why we believe that we can compete with new arrivals,” My said.

“VABIS is aware that Decree 06 aims to put the business of betting activities on horse and greyhound racing in better order. Being the first investor in this business field in Vietnam, we have been obeying all of the current regulations and following all of Decree 06’s stipulations, and we have not faced any difficulties in doing so,” My added.

According to KP Singh, CEO of Vietnam Sports Platform – a foreign-invested company proposing the first-ever velodrome project in Vietnam, which may also be used for sports betting in the future – it is encouraging to note that the Vietnamese government has started to allow the betting.

He said that the common approach should be to consider and approve any new and sensitive business on a case-by-case basis and a pilot scheme, with special approval from the prime minister for a particular project.

“So it is logical that after some time where these projects which have been licensed and approved on a pilot scheme, the regulations will be adopted to formally regulate that area or business,” he said.

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