Vietnam unwavering on casino ban for locals

By VnExpress   September 5, 2016 | 04:11 pm GMT+7
Vietnam unwavering on casino ban for locals
Motorists ride past a sign of Do Son casino, made of images of playing cards, in Vietnam's northern Hai Phong port city February 10, 2014. Photo by Reuters/Kham

The Ministry of Finance holds the cards when it comes to this call.

In a surprise twist, the Ministry of Finance has said that locals should not be allowed to enter Vietnam’s casinos, even though the country’s top leadership gave the green light to lift the ban several years ago.

In 2013, the Communist Party's decision-making Politburo gave permission for Vietnamese people who meet certain criteria to gamble in a casino to be built in the Van Don Economic Zone in Quang Ninh Province on the border with China.

International casino developers, for whom Asia has become a global gaming engine following the stagnation in the U.S., have been circling Vietnam for some time now. With a population of 90 million, analysts say that by lifting the ban on locals gambling, Vietnam could reignite interest in investors who had previously pulled out of casino projects due to tough entry barriers.

But in its latest draft decree submitted last month to the government for approval, the Ministry of Finance insisted that only foreigners and Vietnamese with foreign passports should be allowed to gamble in casinos in Vietnam.

“We are continuing to study and gauge the social impacts of letting Vietnamese punters into casinos,” a senior official at the Finance Ministry was quoted by Thanh Nien newspaper as saying on Monday. “We want to report to the higher-ups about the ramifications this could have such as organized crime, gambling addictions, money laundering and other illicit activities.”

Opponents of the casino ban say it only sends droves of Vietnamese across the border into Cambodia, Macau or Hong Kong to gamble, given the entrenched gambling culture in Vietnam. Many cases of people selling off their property or even being kidnapped for ransom have been reported due to debt accrued in foreign casinos.

Given that, locals should be allowed to gamble in casinos in Vietnam to "prevent the outflow of foreign currency", and there is a pressing need to regulate that, Nguyen Thi Kim Ngan, chairwoman of the National Assembly (Vietnam’s legislature), said in 2013 when she was the deputy house speaker.

According to a study by Augustine Ha Ton Vinh, an academic who has researched Vietnam's gaming industry extensively, the country is hemorrhaging as much as $800 million a year in tax revenue from Vietnamese punters who cross the border to Cambodia. Vietnamese authorities have endorsed this study.

According to Forbes magazine, the country’s eight licensed casinos, mostly small and established under earlier rules, and around 20 slot clubs generate an estimated US$300 million in annual gaming revenue. The magazine said in a recent report that last May, a group of investors led by local property developer Imex Pan Pacific Group announced plans for a $4 billion project in Ho Chi Minh City.

Foreign investors seeking to operate a casino in Vietnam have to build large-scale integrated resorts with malls, restaurants, entertainment facilities and luxury hotels. They also need to invest at least $4 billion and have 10 years of experience in the casino business.

Singapore has no such minimum and neither does Macau, the world's biggest casino market. The Philippines has an investment threshold of $1 billion, but only for Manila, and the market there is 80 percent domestic.

But skeptics say without the rule of law and oversight of a country like Singapore, considered a success model for the gaming industry in the region, casinos could be a disaster for Vietnam.

“I cannot point to any casino in Southeast Asia that has reinvested its revenue in non-gambling ventures or made investments in their host communities,” Zach Abuza, a Washington-based Southeast Asia expert, said.

Anti-gambling activists also point out that grand casinos never employ as many people as investors claim they will, and for the most part they are low-paying jobs at the bottom end of the service sector. A large casino will suck away much-needed investments in infrastructure such as roads, electricity, water and sewerage from other sectors that will provide more sustainable growth in the long term, they say.

The social costs of gambling are enormous and include addiction, debt, prostitution and crime, analysts say.

"What often goes unreported is the link between casinos and organized crime," Abuza said. "Look no further than the casino in Cambodia: this place has been laundering Southeast Asian drug money for nearly two decades.” 

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