Not worth the gamble

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Negative impacts of casinos far outweigh any economic benefit, critics argue

Playing cards and chips are displayed on a blackjack table at the MGM Resorts International casino in Las Vegas, US. The company is developing a Vegas-style casino resort in southern Vietnam.

Foreign investors are demonstrating interest in opening casinos in Vietnam, anticipating huge profits from a market with a 90 million population and increasing tourist arrivals, but critics say legalizing gambling will open a Pandora's box of social evils that the country can ill afford.

Malaysia's Genting Group, which operates the Resorts World Sentosa casino in Singapore, has proposed to build a US$4-billion integrated resort with a casino in the northern province of Quang Ninh.

Las Vegas Sands, the operator of Singapore's other casino, has also said it is interested in exploring opportunities in this country. But Chairman Sheldon Adelson has said he will only build a casino in Vietnam if the country allows local people to gamble.

Now, only foreigners are allowed to gamble at casinos in Vietnam.

According to experts, international tourists are not the only ones the casinos could target. Investors anticipate a legal change that may allow locals to gamble in casinos.

The casino industry and gambling had been frowned upon for a long time and the first "breakthrough" came when government approved a Vegas-style casino resort in 2008. The $4.2 billion Ho Tram Strip, around 80 miles southeast of Ho Chi Minh City, with two casinos and five hotels, is being built by American casino groups MGM Resorts International and Pinnacle Entertainment. The first phase of the project is slated for opening in 2013 and construction is reported to be well under way.

The country now has four casinos, all in the northern region, but they are of a small scale. The Do Son Casino in Hai Phong in particular targets Chinese players, and experts say it has not contributed much to the city's tourism industry.

PM's greenlight

Prime Minister Nguyen Tan Dung has approved the overall plan on the development of Quang Ninh's Van Don economic zone, which includes the $4-billion integrated resort with a casino. Site clearance for the 2,000-hectare resort is expected to cost $585 million.

Nguyen Van Thanh, vice chairman of the provincial People's Committee, said the resort complex will help transform the district into an international tourism destination. Six million foreign and local visitors come to Quang Ninh's Ha Long Bay each year, but their stay is not long due to a shortage of entertainment centers in the province.


Investors sought for new casino, airport in northern Vietnam

While Vietnam has only a handful of casinos, which only foreign-passport holders can enter, many Vietnamese regularly cross the border to gamble in Cambodian casinos. Some economists say if the government bans local residents from playing in domestic casinos, the state will miss out on collecting taxes.

Vu Duc Dam, chairman of the government office, said that the government was considering proposals to legalize casinos and sports betting.

"The government is studying the experience of other countries to ensure that we are able to develop the economy under the market mechanism, but not negatively affect the society, the habits and customs of local people," he said.

Minister of Finance Vuong Dinh Hue visited Singapore early this month to study how sports betting is organized there.

Phan Huu Thang, head of the Foreign Investment Research Center of the Hanoi National University, said the casino business is legal in many Southeast Asian countries, including Malaysia, the Philippines and Cambodia, and it has helped them lure international visitors, increase foreign investment and raise state budget revenues.

Vietnam should not ban casinos, but have strict requirements of foreign investors who want to do business in the field, he said. For example, only resorts and hotel projects with an investment capital of $2 billion upwards should be allowed to open casinos, Thang said, adding investors should also be asked to meet other infrastructure and security criteria.

Local authorities should revoke business licenses of existing casinos that are operating ineffectively or fail to meet set criteria, he said.

Several cities and provinces including Ba Ria-Vung Tau, Da Nang, Lang Son and Phu Yen have licensed their own entertainment complexes with casinos. However, the projects have not yet been implemented, pending direction from the central government. The Vietnamese government, in principal, has only approved one new casino project in the resort town of Phu Quoc.

Some experts say casinos will have more positive than negative impacts on the society if they are well managed. Vietnam's tourism could benefit most from the casino projects, as casino tourists are generally wealthier than others, which means the country can also attract higher revenues, they add.

They also say Vietnam can follow Singapore by requiring locals to pay a fee before allowing them to play at a casino. This can help prevent a large amount of money being taken out of the country by locals for gambling.

In addition, casino resorts can become magnets for other projects, creating more jobs for locals, they argue.

But another expert said it would be difficult for Vietnam to lure foreign customers to casinos due to its poor tourist system. He felt Vietnam has not yet had any advantages in competing with other Southeast Asian countries in the development of casino industry.

Vietnam welcomed over six million foreign visitors in 2011, up 19.1 percent over the previous year, according to the Vietnam National Administration of Tourism. However, the agency said many foreign tourists do not want to return to the country because of poor service and lack of attractions.

Social evils

Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, said some Vietnamese people cross the border to play in Cambodian ones, many of them even sell their assets and houses to gamble, he said. "If we open more casinos, and allow local people to play there, more social evils would happen, as Vietnamese people are keen on gambling."

He said the government should carefully consider licensing projects with casinos, even if they are only open to foreigners.

"Where do investors of multi-billion dollar projects expect profits to come from, as the government is yet to allow citizens to gamble in those casinos?" he asked.

While acknowledging the economic benefits brought by casinos in many other countries, economist Bui Kien Thanh said Vietnam should not develop the casino industry, as it is not suitable to Vietnamese people's culture.

"The impact of opening casinos en masse will be very big, as it runs counter to the culture of most local people," he said.

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