Playing chips on a blackjack table at an MGM Resorts International property in the US. A Las Vegas-style casino resort is expected to open in southern Vietnam next year. Photo: Bloomberg
The government has submitted a draft decree to the National Assembly Standing Committee that stipulates that casino licenses will only be issued to investors with a registered capital of at least US$4 billion and a minimum experience of 10 years in the business. The ban on gambling for locals remains.
These requirements are too strict and likely to keep out investors, Nguyen Mai, former vice chairman of the State Cooperation and Investment Committee, as the Ministry of Planning and Investment used to be known, told Vietweek in an exclusive interview.
Vietweek: What do you think about the proposed decree?
Nguyen Mai: I do not understand the objective of the Ministry of Finance in drafting the decree. If we want foreign businesses to invest in the field in Vietnam, we should know what requirements they will accept. After seeing the stringent requirements in the draft decree, Malaysia's Genting Group has announced its withdrawal from a US$4-billion integrated resort and casino project in Hoi An.
We should not issue the decree if we want to lure casino investors. I do not understand why we need investors to have a registered capital of at least $4 billion and minimum experience of 10 years. You see [Roman] Abramovich did not have football experience, but still could invest in [English Premier League football club] Chelsea since he hired coaches and managers. Since they have money, investors can hire the world's leading firms to manage their projects. Now investors of all five-star hotels in Vietnam hire managers. Thus the regulation about the experience is not in line with international practice.
Vietnam should consider all aspects before issuing a decree. If we want to build tourism complexes with casinos, we should consider who would accept the requirements and invest. I think the draft decree is not very likely to succeed because nobody would want to invest in the field if it is issued.
Our first casino in Hai Phong has not developed much after 20 years of operation because of our strict regulations. Especially after China prohibited its people from going to Vietnam to gamble (in 2005), casinos in Hai Phong and Quang Ninh Province have not developed.
Should we allow casinos to be built in thinly populated areas such as Phu Quoc Island and Van Don Island in Quang Ninh Province?
There are two different opinions - one is that we should allow only foreigners to gamble in casinos to develop tourism, and another is that we should allow both locals and foreigners to do it, since Vietnamese spend hundreds of millions of dollars every year betting in Cambodia and Singapore.
|Nguyen Mai, former vice chairman of the State Cooperation and Investment Committee
My opinion is that locals should not be allowed because we already have too many social issues that need to be tackled.
So I think we should not allow casinos in big cities like Hanoi and Ho Chi Minh City. We have banned locals from gambling in casinos, but there are a number of Vietnamese who surreptitiously go to the casino in Hai Phong's Do Son District. We cannot properly control casino customers even though there is only one road leading to it. If we allow casinos in Hanoi and HCMC, it will be even more difficult to control their customers.
So the best way is to allow casinos only on islands. To attract investors, we should have special regulations to enable them and their customers to travel and transfer money.
But we should not discuss casinos too much or consider them an area that should get investment priority in the current context. We should expect FDI only in the fields of high technology and modern services.
How could casinos in Vietnam compete with those in Malaysia or Macau, which are only two or three hours of flying time away from Vietnam?
Their competitiveness does not depend on Vietnam's management, but on investors. Like other projects, casinos can develop well if they have investors with good financial capacity. There is a reason that Las Vegas Sands considered investing in casinos in Vietnam only 25 years after the country's renovation. This means they have already carefully researched it, comparing Vietnam's conditions with those in other countries, so we don't have to worry about their business.
The competitiveness thus depends on how we help investors attract customers. In large projects, the government should discuss with investors to find suitable ways to help them compete.
To attract tourists, casinos should develop together with huge shopping centers and quality hotels. However, that has not yet been implemented in Vietnam. So can casinos in the country attract clientele?
With a registered capital of $4 billion, investors will build complexes with casinos, hotels, and shopping centers. Their customers will be affluent people with incomes in the millions of dollars, not normal tourists.
Foreign investors, when selecting their casino location, will have already researched about their customer sources and revenues. So we need not worry about them. If they want to attract customers, we should cooperate with them on the basis of respecting Vietnamese customs and legal regulations while also securing their benefit.
Casinos often contribute much to government revenues. Malaysia's Genting Group is an example. It opened its first casino 15 years ago, and contributed around $100 million annually to the Malaysian government in the early years. Now, the figure may be much higher.
With a registered capital of $4 billion, casinos could contribute hundreds of millions of dollars to Vietnam every year.
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