Currently, Vietnam has seven licensed casinos for foreigners and three major casinos under construction, including Van Don (Quang Ninh), Phu Quoc and Nam Hoi An. Apart from the ten mentioned projects, various cities and provinces still propose to build more large-scale casinos, holding high expectations for this fruitful business.
However, exchanging with TheLEADER, many experts said that despite various prospects, casino business in Vietnam still faces enormous challenges regarding relatively strict policies for players, international management skills and strategic investors.
Difficult to compete without international management skills
According to Pham Phu Truong, GIBC's general director, casino projects that have been implemented in Vietnam recently lack prestigious casino managers. Only Nam Hoi An Casino, invested by Vinacapital, used to cooperate with Genting Group (Malaysia), a leading casino business company in the world.
According to Truong, it is very challenging to compete without international management skills. Not only in the domestic market but investors also have to compete with new markets like Japan (which has licensed casinos in Osaka) or even adjacent markets which have operated casinos for a long time like Singapore.
Recently, the draft law for Special Administrative-Economic Zones (referred to as special economic zones) for Van Don, Bac Van Phong and Phu Quoc has introduced the special consumption tax incentive of 10% instead of the current 35%. This "incentive", to his view, aims at reducing the risks for investors in new and less developed markets.
"Investing US$2 billion on casinos in an environment lacking amenity infrastructure as Vietnam would be risky," said Truong.
For example, world-leading casino investors and managers, such as Las Vegas, want an environment rather than Van Don and Phu Quoc to establish the casino-resort complex, focusing on the MICE (meetings, incentives, conferences and events) market. A big city like Ho Chi Minh City with established infrastructure is an option. Las Vegas has considered investing in Ho Chi Minh City in the long term.
According to McKinsey Consulting Group's 2017 report, about 17% of visitors come to Ho Chi Minh City to work, higher than the regional average by 14-15%.
"If we follow the MICE model, we should focus on conference travellers. The guests are usually investors and business people, who often spend more money and also in better control than other kinds of guests, according to the statistics, "said Truong.
"Besides, the social responsibility of global casino management companies is often higher. Las Vegas casinos have a responsible gaming system. They consider gambling as entertainment but not a means of livelihood. They behave differently as the way they look is different," Truong added.
However, according to Pham Phu Truong, although the new draft of the Ministry of Finance has not been specified, the two important factors of regulating investment capital and the probability to allow the Vietnamese to play has somehow solved the problem for foreign investors.
Investor selection: The key to success
Also talking about investor choice, Dr Phan Huu Thang, former Director of the Foreign Investment Agency (under the Ministry of Planning and Investment), said that it is the most important factor that determines the success of using casinos for socio-economic development in special economic zones.
According to him, when selecting the investors, we should first follow the regulations on strategic investors in the draft law for special economic zones.
Second, we should consider their experiences.
Third, we should pay attention to the commitments they made and ensure that there is a punitive mechanism if those commitments are not taken.
Thang said that we should have different attitudes for different partners. Those having bad investment experiences in Vietnam should be closely watched if chosen.
"Before selecting the investors, casino investment projects should have a clear plan and orientation, [...]Foreign investors should be distributed to every special economic zone, no one should hold the whole market in an area," Thang said. It is also an issue that needs further consideration to ensure the efficient and sustainable development of special economic zones and economies.