|Vietnam has in the past few years relaxed regulations on local people being able to gamble at casinos |
It has been two years since the government released the long-awaited Decree No.03/2017/ND-CP allowing a trial project for gambling by economically-qualified locals at certain venues.
Located on Phu Quoc Island, Corona Resort & Casino complex was this year selected to be the first to take part in a three-year pilot programme, which lifted the longstanding ban on Vietnamese people gambling in casinos in 2017, following the decree.
The investor of the complex, Phu Quoc Tourism Development and Investment JSC, an arm of Vietnam’s leading private conglomerate Vingroup, announced good results that have heated up the multi-billion dollar industry as major casino developers in Vietnam usually show a downtrend and even losses.
A mixed picture
Opening in January, Corona Resort and Casino posted a pre-tax profit of VND108 billion ($4.67 million) in its first six months. Out of all of the company’s operations, which include hotels, restaurants, villa management, and others, the casino was the only division to report profit according to the company’s latest statement.
Vietnam has seven casinos that are open exclusively for foreigners. Many other facilities that retain the ban on locals have reported falling revenues in recent years.
In an annual report and audited accounts dated September, Donaco International Co., Ltd., which owns 95 per cent of Aristo International Hotel (formerly Lao Cai International Hotel JSC), said that game revenue in Vietnam fell by 16.6 per cent on-year, to $21.58 million in the fiscal year to the end of September. Aristo has 400 rooms and is only open for foreigners to gamble.
Meanwhile, Royal International Corporation (RIC) which runs the only casino in Halong Bay, said that game revenue fell to VND19.52 billion ($848,700) in the first six months of this year in comparison to the VND81.45 billion ($3.54 million) last year. In 2017, RIC reported losses of VND127.5 billion ($5.79 million).
Slowing visitor numbers have been blamed in part by the wide-scale opening of casinos in the region, while the market share was torn down as regulations failed to allow Vietnamese people to participate.
Corona Resort and Casino’s results have brought hope for other developers and are a step forward for the government to offer more trial programmes, then decide after three years whether to expand and continue.
Positive regulation and big bet
The Ministry of Finance (MoF) is currently revising Decree 03 on gambling and the casino business to cut a number of investment conditions as well as calculating the minimum capital an interested investor must allocate before being granted a certificate for such development projects.
Under the decree, investment in any casino project has to be at least $2 billion. The MoF aims to keep minimum capital at $2 billion, but may allow investors to make further investments in the economic zone.
If approved, the revised decree could encourage investment into casino resorts and infrastructure projects connected to the country’s special administrative-economic zones and see a boon for investors implementing registered projects.
In a recent interview with VIR, Hoiana chief operating officer Steve Wolstenholme said, “Given their size, these types of resorts are a boost to local employment as they require a diverse range of employees, often investing in training and personal development programmes for local residents.”
However, the MoF’s proposal has been criticised by international financiers. Casino expert Augustine Ha Ton Vinh told VIR that adjustments are necessary; however, the limited scope of application does not meet the government’s strategy requirements. “Therefore, the adjustment must be more universal, with equal effects on investors of other current and future complexes,” Vinh suggested.
Currently some casino in works in waiting a pilot to allow local resident to gamble. In other sides, there are some risk for investors
Augustine Ha Ton Vinh, an expert in the casino business told previously VIR that “The government has now allowed Vietnamese to play in the casino in pilot project. If the government wants to attract international investors, it should also consider more geographic factors that is the location for the casino. If only remote areas can be considered, it is really hard to attract them, especially world-class casino investors, such as billionaire Sheldon Adelson as a name,”
Sheldon Adelson, the owner of Las Vegas Sands, once intended to develop casinos in Hanoi and Ho Chi Minh City in 2012. But his ambition has become infeasible.
Vinh explained in some other countries, major casino developers have built and operated well-known casinos in property complexes, which are not casino only, but combined with many other facilities such as conferences hall, hotel rooms, restaurants and other leisure facilities. Those complexes are operating very successfully and the governments of those countries bring profits got from casino to invest back on public facilities served for the whole society. However, those casino are located in the downtown area of major cities. Meanwhile, the government of Vietnam has allowed some casinos but in remote areas, thus not attracting foreign investors. This is also the reason for so far only some domestic investors build casinos in Van Don, Phu Quoc island.
Economic expert Nguyen Mai remarked that contrary to the prediction that Vietnam will see a casino boom once the government accepts to open casinos to Vietnamese, the predicted boom has not occurred.
Vietnam’s conditions for the local trial include a number of fiscal hurdles, including a daily casino entry fee of VND1 million or a monthly pass for VND25 million.
Would-be casino gamblers also have to demonstrate a monthly income of at least VND10 million ($430). Casinos will have to keep detailed records on locals’ comings and goings to ensure accurate data for the government to deduce the results of its trial.
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 ($430) 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 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 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.