5 minute read
VIETNAM
Slow but steady progress
Vietnam’s gambling industry stayed largely out of the headlines in 2019, though projects have been inching their way forward, with the country’s largest resort to date scheduled to open in the first half of this year.
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In 2017, the country published new legislation to regulate the industry, easing restrictions on the amount of invested capital required from $4 billion to $2 billion and lifting caps on table numbers. It also introduced a three-year pilot program at two integrated resorts -- one of which still has to be built -- that would allow locals to gamble for the first time, providing they meet certain requirements, such as minimum monthly income of VND10 million ($433).
The country, with its strong inbound tourism market and expanding economy, is viewed as a highly promising jurisdiction for international casino investors, though progress has been slow, with missteps along the way.
According to Ben Lee, managing partner at iGameX Management, which is involved in projects across Asia, in particular in Vietnam, work is expected to restart this year on the second resort that will permit locals.
The Van Don project in the far north of the country stalled after the government reneged on tax breaks initially granted to the developer, Sun Group. The two parties have now reached an accord and the resort is expected to be completed in 2022. The casino operations of the property will be managed by Macau’s Suncity Group.
Sun Group, one of Vietnam’s biggest developers, has invested heavily in infrastructure to improve access to the area. In late 2018, the Van Don International Airport was opened, the first in the country to be developed by a private corporation. The group also inaugurated the Halong International Cruise Port and the Halong Van Don Highway.
Meanwhile, the first resort in the locals pilot scheme is reportedly gaining traction after a slow start. Casino Corona, on Phu Quoc island in the far south of the country, opened its doors in January 2019 and reportedly turned a profit of $4.67 million in its first six months of operation.
“Phu Quoc is a very nice resort,” Lee said, who visited the property last year. “Inside the casino there was quite a bit of activity, with about 12 tables and 90 percent locals.”
“Phu Quoc may give (the government) confidence that allowing locals gaming is not going to open the gates to purgatory,” Lee said, adding however that he sees no chance of the experiment being extended to other resorts until the three-year pilot phase had run its course.
The big news out of Vietnam this year is likely to be the opening of the $4 billion Hoiana resort in the centre of the country sometime in the first half of this year, delayed from a scheduled debut in 2019.
The project, in which Suncity has a 34 percent equity stake, is being developed with Vinacapital and VMS (a subsidiary of Chow Tai Fook). iGameX carried out the feasibility study. The first phase of the three-phase resort will include three luxury hotels with more than 1000 hotel rooms, retail space, a golf course and food and beverage outlets.
It’s expected to debut with 140 tables and 300 electronic gaming machines.
The beachfront resort is based near the ancient town of Hoi An and is easily accessible from Danang Airport,which is the third busiest in Vietnam, with daily flights to destinations across the region, including Hong Kong, South Korea, Taiwan and Japan.
In terms of gaming in Vietnam, analysts are most optimistic about the prospects for the central Danang area, in part due to its connectivity and on the non-gaming side to its popularity as a holiday destination amongst Vietnamese.
Lee said that another large-scale project is under consideration in the central Vietnam area, that will be “slightly smaller” than Hoiana. The resort is currently in the concept stage, he said, giving no further details.
Meanwhile, the Grand Ho Tram Resort, which opened in 2013, is forging ahead under new ownership after global investment fund Warburg Pincus last year bought a majority stake in Asian Coast Development, which controls the developer Ho Tram Project Co.
The $4.2 billion project has struggled to gain traction, in part due to accessibility issues. The highway from the airport in Ho Chi Minh City has been improved, but it is still more than a two-hour drive.
“It was always a hard sell to get the Chinese to fly in only to sit in a car for another two to three hours,” Lee said of Ho Tram.
Police arrest 10 in multimillion gambling bust
Vietnamese authorities arrested 10 people in January in relation to an online, transnational gambling ring, according to local media reports.
The ring was busted on January 8, when police found 117 ATM cards, 55 personal IDs and other evidence related to gambling and organizing gambling online.
The actual gambling site was hosted outside Vietnam, police said.
The ring collaborated with accomplices in Vietnam to advertise the site and attract thousands of players to it, they added.
Transactions in Vietnam have amounted to at least VND1 trillion ($43 million), preliminary investigations have found.
Suncity lends $17m to Hoiana developer
Suncity Group has agreed to loan $17 million to the developer of the Hoiana Resort in central Vietnam to help finish the project.
The five-year loan has been granted to GYE, which is a 50/50 joint venture between Suncity unit Star Admiral and Alpha Era, which has also agreed to extend the same amount to GYE.
“Upon the successful implementation of the project in Vietnam, it is expected that there are business prospects and also room (for) business growth for GYE,” Suncity said in a Hong Kong Stock Exchange filing.
“In light of the increasing demand for tourism-related business in the South East Asia region, the board holds a positive outlook for the project in the future and it is expected that the group will benefit from the future success of GYE.”