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New hope for Vietnamese casinos after heavy pandemic losses

New hope for Vietnamese casinos after heavy pandemic losses

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The casino industry is comparatively young and comparatively small in the country of Vietnam, understandably so for a country that remains a Socialist Republic. The Covid-19 pandemic hit this growing industry hard, but maybe brighter and more positive times are on the horizon…

Despite being the 15th most populous country in the world, with a population of more than 96 million occupying just over 300,000 square kilometres, Vietnam has just nine licensed casinos and only 56 businesses licensed to provide prize games in hotels. As a result, gaming revenues in Vietnam were always modest, but the Covid-19 pandemic has decimated even these small numbers.

In January 2019, the Vietnamese Politburo introduced a pilot scheme, allowing Vietnamese nationals to enter just two casinos, one on the island of Phu Quoc, in Kien Giang province, and the other in the economic development district of Van Don, in the province of Quang Ninh. Both are exciting and dynamic parts of the country, with Phu Quoc boasting the world’s longest cable car journey!

Prior to this pilot scheme, other casinos such as the Ho Tram Casino in Vung Tau province were only open to non-nationals and always incurred heavy losses, presumably due to nothing more complicated than a lack of adequate tourist traffic.

By the end of 2019, the Phu Quoc Casino had built an audience of more than 105,000 players, of which over 45% (47,000+) were Vietnamese nationals. Total earnings, across both hospitality and gaming, had reached 1,433bn Vietnamese Dong (VND), equivalent to around $6.3m (USD). This total included VND1,381bn ($6m) in taxable gaming revenue.

However, when the pandemic struck, tourism dried up and resort facilities ground to a halt. 58 of the 63 casino and prize game businesses based in the big cities and provinces of Hanoi, Ho Chi Minh, Da Nang, Can Tho, Kien Giang and others, had to close. National revenues from casino services and prize-winning games and casino services dropped by more than 60% year-on-year from 2019 to 2020. It is true that 2021 saw some recovery, perhaps as much as 50%, but when total national revenue stands at a less than $14m, with tax just over $5m, the future may not look especially bright.

So why do both domestic and overseas investors see potential and are looking to invest billions into the casino and prize-winning game sectors in Vietnam? It has been said that the January 2019 policy of allowing Vietnamese nationals to enter the pilot casinos brought a new look to these local facilities.

As an area of economic development, Van Don is an exciting project, and many believe that its casino could be a standard bearer for the industry in Vietnam. So much so that in order to encourage casino investment in Van Don, the Ministry of Finance has proposed amending and supplementing the Government’s existing Decree on Casino Businesses, and loosening regulations. Furthermore, several private investors have asked the Vietnamese Government to direct Ministries, Agencies and Provincial authorities to consider licensing casinos at tourist attractions such as Quang Nam and Ba Ria – Vung Tau to serve Vietnamese players, as allowing Vietnamese people to enter local casinos is said to be a prerequisite for success.

With far more liberal jurisdictions such as Singapore so easily and inexpensively accessible, it remains to be seen whether brighter days are ahead for the sector in this nation where spectacular economic growth over the next decade has been widely predicted.