VIETNAM

Luring in the locals

Vietnam’s steadily expanding gaming industry is seen as having among the best potential in Asia, with a pilot scheme allowing locals to gamble for the first time expected to further spur investor interest.

Towards the end of 2018, the government gave the final nod for a three-year experiment that will allow Vietnamese into a casino resort on Phu Quoc island in the far south of the country.

The casino will form part of a US$2.1 billion hotel and entertainment complex and opened its doors on January 19.

The main investor is Phu Quoc Tourism Investment and Development Jsc, a company in which Vingroup, the country’s largest conglomerate, holds a 50 percent stake. In May 2017, Netherlands-based Upffinity Gaming Management signed an exclusive agreement to manage the casino at the Corona Integrated Resort, which includes a Radisson Blue hotel, a Vin Oasis hotel, a Safari and Amusement park, convention center, theater and shopping experience.

The casino itself was designed by Steelman Partners and includes 18,800 square meters of gaming floor made up of 100 tables and 1000 electronic gaming machines, 3 restaurants, 2 specialty bars & lounges.

Vietnam officially lifted its long-standing ban on gambling in 2017, allowing Vietnamese locals to gamble at approved local casinos through a trial program lasting three years. A second project in the far north of the country is also expected to be given approval for local gambling.

The $2 billion integrated resort planned for Quang Ninh province on Vietnam’s northern coast is expected to begin its first phase of construction in the first quarter of 2019 and be fully completed by 2022, according to local news reports.

The Van Don project will cover 2,500 hectares and will have a 50-year license if it receives final approval, local media cited Nguyen Duc Long, chairman of the municipal People’s Committee in the province as saying.

According to Long, the project is under the Ministry of Planning and Investment (MPI)’s consideration and he said he hoped the process would be concluded soon.

Once completed, the entertainment complex is expected to contribute VND250 billion per year to the state budget.

However, to gamble, citizens must be over 21 years of age, and have a monthly income of at least VND10 million ($445).

Vietnam has overhauled its casino legislation in the past few years creating a stable framework for the industry. However, the lifting of the locals ban was the clause that attracted the most investor attention, providing access to Vietnam’s developing economy and population of more than 95 million.

At present the experiment is highly limited to two fairly remote resorts, however, industry experts expect the pilot scheme to be gradually rolled out to other projects in the country.

“Vietnam is the hottest land based gaming destination in Asia right now and it will remain so into 2019,” says Tim Shepherd, a director with Fortuna Investments. “On the demand side, a mixture of proximity to China, safe environment and a wonderful destination for tourists means plenty of guests. On the supply side strong (and stable) gaming regulation, a large slice of the population which can speak Mandarin, tied to an industrious “can – do” from architects and builders, mean fewer headaches, less capex and greater ROIC on a like for like basis with places like the Philippines.”

Vietnam welcomed 15.4 million tourists in 2018, a gain of more than 20 percent and sees growth of 16 percent this year. Mainland China was the biggest source market, though last year, South Korea was the fastest growing with visitor arrivals up 44 percent.

Other projects are also moving ahead. The first phase of a multi-billion US dollar casino resort on Vietnam’s central coast, backed by Macau junket Suncity Group, is expected to be completed by the end of this year.

Suncity has a 34 percent stake in the HOIANA IR development, which will include a casino with 140 tables and 1,000 slot machines, a golf course clubhouse, a mass market hotel with 313 hotel rooms, an all-suite hotel with 136 suites, a hotel villa resort with 70 units, as well as 30 villa units for sale and timeshare rental, and a condo-hotel with 236 rooms for sale and timeshare rental.

As part of the first phase of the Hoiana gaming resort, two towers will provide 270 units of condominium and hotel space.

However, it’s not all plain sailing. Australialisted Donaco said the performance of its Aristo International property, bordering Yunnan province, had been hit by a Chinese crime syndicate targeting VIP junkets and customers on the China side of the border.

“This had a serious impact on the Aristo in July and August 2018, but following management actions to address the situation, including working with law enforcement agencies on both sides of the border, the results improved in September and again in October,” the company said. Management noted that it’s confident authorities now have the situation under control and business at the resort would return to normal.

Chinese arrested in illegal gambling bust

More than 20 Chinese nationals were arrested in Vietnam’s southern coastal province of Ba Ria-Vung Tau in December for organizing illegal gambling, local media reports.

More than 100 police officers stormed three villas and a hotel in Vung Tau City, seizing 41 computers, 13 laptops, 300 mobile phones, one card reader machine, one machine for producing fake bank cards, 33 ATM cards issued by a Chinese bank and 200 card prototypes. The suspects, which include 20 males and two females, were detained for organizing gambling and producing fake bank cards.

Computers and laptops seized contained data showing they were logging into online gambling websites on behalf of Chinese citizens.

Tourism numbers seen up 16 percent in 2019

Vietnam estimates a 16 percent increase in international visitors to the country in 2019 after posting strong tourism growth last year.

The country expects to welcome about 18 million visitors and also forecasts 6 percent growth in domestic tourists to 85 million. Total international arrivals in 2018 reached 15,497,791, up almost 20 percent over the prior year.

China was the top source market with more than 4.9 million visitors, up almost 24 percent from 2017, though South Korea was by far the fastest growing market, with tourism numbers up 44 percent to more than 3.4 million, according to government figures.