Officials to gamble on ban decision

Over the past decade, there has been considerable debate over whether local Vietnamese should be allowed entry into domestic casinos. With Vietnamese increasingly spending significant amounts of money gaming overseas, relevant authorities are assessing the advantages of local gaming as well as how to go about developing a comprehensive legal framework that will properly govern the casino industry in Vietnam.

The "smokeless industry" and its practical benefits

In many countries throughout Asia and Southeast Asia, local citizens are legally allowed to participate in prize-winning games, including gaming at casinos. In neighbouring countries such as China, Singapore, Malaysia, South Korea, and the Philippines, casino revenues are in the billions of dollars annually. In 2005, Prime Minister of Singapore Lee Hsien Loong marked an important milestone for the country’s gaming industry and economy by removing a four-decade ban on casinos that had been in place since the country’s inception in 1965. Prime Minister Lee’s decision helped accelerate Singapore’s move towards greater international integration and development in the gaming industry. In just the first year of opening Singapore’s two integrated resorts and casinos, the Marina Bay Sands and Sentosa, these facilities contributed $880 million in taxes to the Singaporean government in 2011. In total, these two projects have also created 30,000 jobs for local workers.

In Cambodia, although statistics have not yet been released, the annual revenue from casinos has been estimated at $250 million, to which Vietnamese gamers make a significant contribution. According to statistics from the Vietnamese police forces, an estimated 3,000 Vietnamese traveled from Vietnam to Cambodia every week in 2011 to participate in casino gaming. This number increased by approximately 700 - 900 during weekends.

Local gaming - selective integration

According to Associate Professor Tran Kim Chung, deputy director of the Central Institute for Economic Management, local gaming is a growing trend in the casino industry throughout the region. In the context of regional and international integration, Vietnam’s decision to open casinos for local gamers would be consistent with the regional trend.

However, according to the Ministry of Finance (MoF), which acts as the drafting authority for the Decree on Casinos, casinos are a special and conditional business, which needs to be managed properly and strictly in order to prevent and mitigate any potential negative impacts.

Experience from a number of developed countries in the region such as Singapore, South Korea and Malaysia indicate that casinos best suited to welcome local gamers are usually located in integrated resorts with other tourist and entertainment services, as these are usually uniquely equipped with advanced internal security systems, which can help identify and control problem gambling.

According to a MoF report, there are currently seven enterprises licensed to operate casinos in Vietnam. Of these, five are considered small-scale, with the investment capital below $50 million. Only two are considered large-scale integrated resorts with an investment capital upwards of $4 billion, the Ho Tram Strip in the southern province of Ba Ria-Vung Tau, which began operating in July 2013, and the Nam Hoi An resort in the central province of Quang Nam, which is still under development.

Although the size of the resort and its scope of professional facilities is a factor in the quality of the local gaming experience – and as such will help authorities manage any downsides – there are other practical measures Vietnam could take to mitigate problem gaming. In Singapore, for instance, an entrance fee of $80 is imposed on local gamers at the Marina Bay Sands as a barrier to entry for gamers without financial capacity.

In South Korea, in addition to an entrance fee of about $7, local gamers whose families file a complaint or request will be restricted from gaming at domestic casinos. Distance from city centres also serves as an effective impediment to problem gaming, as demonstrated by Malaysia, which has allowed only one casino, accessible to both foreign and local gamers, in the Genting Highlands resort, about 35 kilometres from Kuala Lumpur. It is believed that the resort’s distance from downtown Kuala Lumpur has been a crucial factor in preventing problem gaming from becoming a major social ill.

According to Steve Shoemaker, CEO of Asian Coast Development Limited, the Canadian investor in the Ho Tram Strip, co-ordination between regulators, local authorities, and casino operators is crucial for successfully managing potential social impacts. In addition to regulated restrictions, the casinos should be equipped with international standard security systems and operators should participate with local authorities in educating the local community about the potential hazards of gambling. Also, casino staff should be trained to identify addicted gamers.

Sturdy management

Vietnam would do well to review international best practices to understand how well-managed, professional casinos can help spur investment, bring about benefits for the economy, and address social concerns. Examples abound, proving that casinos, if well-managed, can garner significant tax revenues, provide a steady tourist attraction, increase the volume of trade and related services, promote job creation, and can be cooperative partners in helping the state, families, and individuals manage any negative impacts.