INSIDE ASIAN GAMING | September 2013 4 Inside Asian Gaming is published by Must Read Publications Ltd 5A FIT Center Avenida Comercial de Macau Macau Tel: (853) 8294 6755 For subscription enquiries, please email
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[email protected] EDITORIAL Vietnam’s Locals Ban: How It Could End T here are more than 92 million people in Vietnam of whom about 50 million or more are adult age, and as we know from the success of NagaWorld in neighboring Cambodia, a substantial number of them like a flutter. How much larger would that number be if they didn’t have to leave the country to enjoy one? “We’d actually be sitting on a gold mine,” says Mike Santangelo, chief operating officer of The Grand – Ho Tram Strip. Phnom Penh’s NagaWorld booked the equivalent of US$251 million in gaming revenue last year, more than $155 million of it from main floor play, of which an estimated 40%—more than $62 million—was generated by gamblers from Vietnam. That’s not counting their contribution to the $95 million the property made on VIP, or the revenue impact of the money that thousands of Vietnamese are losing every day in gambling dens just over the Cambodian border. Ho Tram, a world-class resort with a price tag of US$500 million, opened six weeks ago on the South China Sea coast in Ba Ria-Vung Tau province just north of the Mekong Delta—its 600- plus machine games and 90 live tables about a three hours’ drive from Ho Chi Minh City’s millions and off limits to them by law, as are all five of the casinos that currently comprise the country’s regulated market. It’s interesting given the timing— Ho Tram opened on the 26th of July—that the domestic gambling ban is now being questioned in the National Assembly, the interesting part being that it’s the government fomenting the discussion around a plan to include something Ho Tram-like with a casino at a sprawling special economic zone called Van Don near Halong Bay about 160 kilometers east of Hanoi. Halong Bay, which is almost within shouting distance of China, is one of the country’s most popular tourist spots and home to a couple of very nice hotels that provide gambling for their international clientele. Van Don, which consists mostly of coastal lands, was set up as a showcase of the government’s ability to foster growth and has attracted some $464 million in domestic investment and $120 million in foreign direct investment since its establishment six years ago. The casino plan actually is the brainchild of one Dao Hong Tuyen, a businessman who rose to prominence as a developer at Van Don. He’s talking about US$4 billion in integrated resort development, which has observers skeptical since they say he has nowhere near that kind of money. But this in itself is not all that unusual. Vietnam’s resort landscape is littered with grand schemes that have come to nothing, although they did wise the government up to the need to impose some stringent capital requirements, as Ho Tram’s backers, Asian Coast Development (Canada), learned the hard way when it ran into 11th hour financing snags and the authorities held back final approval. But it gets more interesting. The Ministry of Finance is reported to have informed lawmakers that Mr Tuyen’s project has the endorsement of the Politburo, the Communist Party’s all-powerful decision-making body. This suggests that either they believe Mr Tuyen can get his hands on really big money or they like the project enough to see if it might interest someone who can—like ACDL maybe—or maybe someone in Macau or Malaysia or Melbourne. The backdrop here is the fact that tourism is playing an ever more important role in the economic life of Vietnam— good for an estimated 4.5% of GDP last year on a 14% surge in international visitor arrivals, more than 4 million of them leisure travelers—and with developments like Ho Tram an increasingly important source of foreign direct investment, which looms large these days with the central government beset as it is with a banking sector that reports say is seriously undercapitalized and ailing. But what the tourists are bringing in the Vietnamese are carrying back out to places like NagaWorld, and lawmakers have begun to wonder aloud if something shouldn’t be done about this. Which is where it gets really interesting because the Van Don proposal has fallen smack into the middle of this discussion. The assembly has been working for months on a definitive regulatory framework for promoting investment in a resort-scale casino industry, and a number of legislative leaders, Deputy Assembly Speaker Nguyen Thi Kim Ngan among them, believe a reconsideration of the domestic gambling ban ought to be part of it. The assembly’s Committee on Finance and Budget has issued a report advocating allowing locals at Van Don on a trial basis. The Politburo is believed to have taken a favorable view of this. Of course, Van Don might not happen, and if it does it’s three or four years away at the soonest at the level of development they’re talking about. Or they can move the trial to Ho Tram and implement it today. If the support for it is as strong as it’s reported to be, this is not out of the realm of possibility.