Inside Asian Gaming

inside asian gaming May 2014 34 family is backing it. The group has not said whether it will seek a gaming license. Then there is a Vietnamese company, this one right in Ho Tram’s neck of the woods, that is partnering with a Hong Kong-based contractor on three large-scale resorts— one of them an international eco-tourist destination planned for 1,500 hectares in the province of Ba Ria-Vung Tau, where The Grand is located. Ho Tram Tourism Company, as it’s called, is joining with Hong Kong’s Dragon Best International on the projects, which will be pursued as public-private partnerships. The others are a trade center with hotels, residences and a convention center in Ho Chi Minh and a mixed-use resort complex in an economic development zone known as Bo Y on the Vietnam-Lao-Cambodia border. The more pressing questions for The Grand are those awaiting the unfolding of the regulatory process. All eyes are fixed on it, The Grand’s especially, though not exclusively. Sheldon Adelson, for one, has spoken of Las Vegas Sands’ desire to develop something big either inHo Chi Minh or Hanoi if a domestic market were possible, and he visited the country as recently as November to assess the prospects. It’s not irrelevant to recall also that The Grand’s original operator was to have been MGM Resorts International, and a major investor is another well-known name in US regional casinos, Pinnacle Entertainment (NYSE: PNK), which bought in for more than $100 million. Pinnacle was supposed to operate a casino and hotel planned for the resort’s second phase. It’s not known where that stands, though, since Pinnacle has written off its entire stake as a loss. So something needs to break with the locals ban. Van Don is too far down the road for The Grand’s purposes, based on the scale of development they’re talking about there. As for The Grand recouping its investment in the existing market, that’s not an option either. At current performance levels it would take about 40 years. Common sense says relief will come long before that. Indeed, the understanding among some members of the National Assembly was that the draft regulations would recognize this, which they do not. Rather they affirm current policy restricting the market to foreigners and Vietnamese holding foreign passports. At an initial meeting of members of the Standing Committee of the National Assembly to whom the draft regulations were introduced, Nguyen Van Hien, chairman of the assembly’s Legal Committee, criticized the document for “delaying the issue”. Assembly Vice Chairman Uong Chu Luu said, “A lot of Vietnamese have traveled abroad to gamble. Why don’t we permit eligible Vietnamese to do that in the country?” A deputy speaker, Tong Thi Phong, seconded that, saying the draft should be amended and “criteria should be established” to allow for “effective management” of a domestic market. On the other side was Vice Speaker Huynh Ngoc Son, who spoke out against this and was cited in popular daily Thanh Nien News as saying it would pit the industry in opposition to “Vietnamese traditions and culture”. Which appears to be the prevailing view of the government, certainly of the Ministry of Finance, which authored the draft, and what this fairly lively discussion elicited from Nhan Dan, the official news organ of the Communist Party, were all of two stolid sentences: “Delegates agreed that developing the casino business in Vietnam has both positive and negative impacts on socio-economic development. The business is expected to attract more investors to Vietnam, though the sensitive sector also requires close management.” Da Nang has been good to its small casino at the Silver Shores International Resort. The city’s airport, the country’s third-largest, is only an hour and a half from southern China. The draft regulations prepared by the Ministry of Finance require developers to commit to no less than US$4 billion to be considered for a casino, $2 billion of it up front. That’s a lot of money given that the new rules contemplate no statutory limit on the number of licenses. In Focus