If you ask the experts, the answer is a resounding "˜no'
An ethnic woman and her son on Dong Van Plateau in the northern mountainous province of Ha Giang. Experts say the idea of building a casino on the plateau is emblematic of how over-simplistically local Vietnamese leaders think about licensing a casino in the name of development. Photo by Luu Quang Pho
Unlike Singapore, Vietnam does not have what it takes to become a major gambling destination, experts say.
The five-star casino-resort The Grand - Ho Tram Strip, which opened on July 26 in Vung Tau as part of a US$4.2-billion tourist development aimed at attracting foreign visitors, has become the sixth casino in Vietnam. A casino-building spree seems looming across the country, where entry barriers for foreign investors are much higher than in neighboring countries, as the government looks to significantly boost tourism and tax revenues amid the economic crisis.
Vietnam has been on the interest radar of international casino developers who consider Asia an emerging gaming engine as the gambling markets in the US have stagnated. But experts say Vietnam's current policies do not bode well for its casino industry.
"There is not much thought put in the casino model as with Singapore's models," Amruta Karambelkar, a Vietnam expert based in India, told Vietweek.
Vietnam bars its own citizens from entering casinos and the investment threshold in the country is $4 billion, higher than in neighboring countries.
Singapore has no such minimum and neither does Macau, the world's biggest casino market. In the Philippines, Manila's threshold is $1 billion and the market there is 80 percent domestic. There are no minimum investment levels for outside of Manila.
"On top of the lack of a critical mass market, Vietnam does not have a proper gaming regulatory environment yet nor a liberal financial regime which are both fundamental requirements," said Ben Lee, managing partner of IGamiX Management & Consulting Ltd in Singapore.
"Why would banks lend to massive projects when the developers can't even show the right documentation in terms of licenses [or] ability to transfer funds?" he said.
Of six casinos in Vietnam, four are located in the north, including two in Lao Cai and Quang Ninh provinces bordering China, enabling Vietnam to pull in increasingly affluent Chinese gamblers, experts say.
While experts acknowledged that Vietnam's proximity to China does play a crucial role in drawing casino companies, they also say that any gaming projects in Vietnam will be aimed squarely at VIPs/high rollers from overseas. They say this business model is extremely risky, as not only is the business itself subject to extreme volatility due to seasonality and air access factors, but without the local mass to give the casinos that busy feel, the foreign VIPs may not return after their first visit.
With a population of 90 million and an entrenched gambling culture, a rising number of foreign businesses have pushed for major legal change that would allow Vietnamese citizens to enter casinos. But the Vietnamese government has made it crystal clear that this issue would not be up for discussion, enacting a law to take effect in October that will subject casinos to fines of up to VND200 million ($9,500) if they let locals in.
By licensing the gambling houses, the government seems convinced that casinos would help boost tourism. But experts do not buy into this.
"One needs to see whether existing casinos have been successful in attracting tourists as expected," Karambelkar said.
"The existing casinos have not helped tourism," she said, referring to the five casinos licensed before Ho Tram. "As a matter of fact, none of these casinos has expanded in the last eighteen years."
Vietnam is facing a tall order if it wants to rub shoulders with Singapore's casino industry, experts say.
"The bidding process, or licensing in Singapore is given after thoroughly examining the suitability of the investor and if such investor can definitely be advantageous to the tourism and economy. In Vietnam the trend has been to give permissions without much thought," Karambelkar said.
"˜Without careful consideration'
Vietnamese provincial governments seem to believe that casinos are silver bullets that develop hitherto isolated areas. They see benefits for locals as the creation of jobs and increased tourism dollars.
A vivid example of such philosophy is perhaps the idea of building a casino on Dong Van Plateau in the northern mountainous province of Ha Giang. It was first mooted last April with some authorities saying interested investors could bid for it.
But it did not win much support from related ministries and drew flak from conservationists who said if built, the casino would destroy the plateau, named a "global geological park" in 2010 as a hub of ethnic culture and a place where the geological history of the formation and development of the Earth can be easily retraced.
The province was silent about it before raising the issue again at a meeting of local and central agencies in June. Local authorities sought to assuage fears of environmental damage, and touted it as a silver bullet that could lift locals out of utter poverty.
But in the most recent and perhaps most bizarre move, the top leader of Ha Giang has said there was no sign that the casino would be built anytime soon.
"So far we've had no information about it," Trieu Tai Vinh, the province's Party chief, told Vietweek.
Asked why his subordinates have started to promote the casino project if there is indeed no plan to go ahead with it, Vinh said: "That's just their personal ideas and I myself wasn't even aware of it."
It is not clear how a casino would benefit the needy, and it turns out that Caritas Switzerland, an anti-poverty group that has been working in Quan Ba District (one of the four districts in Dong Van Plateau), said it had not been consulted by the Ha Giang government on any plan for the Dong Van Geopark that included a casino.
Experts say the Ha Giang casino plan is emblematic of how over-simplistically local Vietnamese leaders think about licensing a casino in the name of development.
"In the race for attracting investment for local economic growth, many mountainous provinces like Ha Giang do not have favorable conditions like their peers in the lowland. They do not have many choices to take," said Trinh Le Nguyen, executive director of People and Nature Reconciliation, one of Vietnam's few locally based conservation groups.
"Therefore, sometimes local authorities take any project proposal without careful consideration of its sustainability. Not only environmentally but also economically and socially."
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