Inside Asian Gaming

January 2011 | INSIDE ASIAN GAMING 31 In Focus betting—if allowed to continue—could have undermined the party’s remaining legitimacy and been dangerously socially divisive. Under the proposed regulation of the sports betting industry, not only will the government benefit from tax revenue, but minimum daily bets (10,000 dong, equal to 50 US Cents) and maximum daily bets (1 million dong, or US$50) will be imposed. A number of major Western suppliers of lottery services have reportedly indicated an interest in tendering for legalised sports betting services in the country. Vietnam committed to liberalising its markets for many goods and services as a condition of its joining the World Trade Organization in 2006. It’s worth noting, however, that domestic and cross-border casino and gambling services are excluded from the free trade requirements. Any move towards liberalisation is a purely domestic political consideration. Any such liberalisation will certainly benefit from international expertise in management and marketing. To get some idea of the relative immaturity currently of the existing legal casino market in Vietnam, in a July 2009 report, the Asia/Pacific Group on Money Laundering—an international and inter-agency body promoting best financial practice in financial industries and the gaming industry in the region—estimated that an existing casino; Hai Phong Bay, had a turnover of only US$3 million a year with a maximum payout perwager on rouletteof onlyUS$2,000. Expect casino operators with the marketing expertise of MGM Resorts International and Genting to beat those numbers easily on entry to the Vietnammarket. Back to the land—Vietnam’s government alarmed by asset sell-offs linked to unregulated gambling casino project management and operations in the Philippines (Resorts World Manila), Singapore (Resorts World Sentosa) and the United Kingdom (the Genting UK casinos). Provincial government officials in Vietnam do, however, have something of a track record for inflating the total value and scope of development projects— possibly because they are competing for the political favour of the country’s central government in the race to attract foreign investment and develop the country’s infrastructure. An example of this is that although the Hoi An scheme has been announced by regional officials as a US$4 billion project, closer examination of the deal suggests the joint venture partners Genting and VinaCapital have themselves only legally committed to a minimum of US$800 million over four phases.* Added to the opacity over exactly how much money has been committed in the Hoi An project is a degree of opacity over the future direction of the country’s policy on the gaming industry. The five-year term of office for current Prime Minister Nguyen Tan Dung expires in July this year. It is not clear at this stage whether he will seek a new term. A possible indicator is that his predecessor and political mentor was in office for 11 years. The budget for the Cat Ba Amatina project has not yet been announced. But indirectly added to the bill is a range of major infrastructure projects—including Tien Lang International Airport, a major highway and a bridge. The latter two schemes are designed to reduce the road journey time from Hanoi, 170 kilometers away, to two and a half hours. In 2004, UNESCO recognised Cat Ba Island as a Biosphere Reserve of international importance. Quite how that fits in with marketingtheplaceasacasinoresorttomore than 300 million people in neighbouring Yunnan province in southwest China hasn’t yet been outlined by the developers. The Law on Investment (Article 37) and related Decree No. 108 of September 2006 provide the legal framework for casinos in Vietnam, although provincial authorities can and do issue detailed regulations within this framework.This accounts for why newprojects are announced by provincial officials rather than by the central government. Under Article 37 of Decree 108, however, only Vietnam’s prime minister can give ultimate approval for a casino licence. Electronic gaming is governed by Prime Ministerial Decision 32 on Regulations on Prize Winning Electronic Games for Foreigners, though the Vietnam government recently announced its intention to issue a law to regulate sports gambling for local Vietnamese. The website VietNamNet Bridge reported in October that during the FIFA World Cup in South Africa in June and July last year, pawnshops in Vietnam were flooded with assets including mobile phones, laptop computers and even luxury cars. The report suggested this was because Vietnamese people pawned their valuables to get cash for football betting. As they lost, they also lost the assets to the pawnshops. The website added that people in rural areas even pawned land plots inherited from parents or grandparents. Given that one of the founding principles of communist Vietnamwas land redistribution to the poor, the trend of effectively mortgaging land for unregulated sport * Source: statement by Do Xuan Dien,Vice Head of Chu Lai Open Economic Zone Management Authority, reported in Vietnam Business News. Sophisticated—artist’s impression of Cat Ba Amatina integrated resort planned for northern Vietnam Image courtesy of Kiva Dang