VietNamNet Bridge – The draft decree on casino business announced by the Ministry of Finance last year has encouraged many foreign investors in Vietnam.

In early April, the Management Board of Chu Lai Open Economic Zone in Quang Nam Province granted the adjusted investment licence for the project Nam Hoi An Resort, with the participation of the new names.

A giant in the field of jewelry in Hong Kong - Chow Tai Fook and Sun City (Macao, China) will be the partners of Vinacapital to continue the project.

Previously, the project was licenced to VinaGenting joint venture between Genting Berhad of Malyaisa and Vinacapital to construct a resort with casino at the cost of $4 billion. However, the Malaysian partner finally left the game.

With the new license, the project is adjusted, with the building area down from 1,538 hectares to 1,000 hectares and the scale of phase 1 of the project increasing with up to 500 hotel rooms and 90 game tables, 20 tables more than the initial plan. The casino is expected to go into operation later this year.

Simultaneously with the move in the central recent, the southern province of Kien Giang was allowed to change the site of the casino in Phu Quoc Island from Da Chong village in Bai Thom commune to a location adjacent to the Phu Quoc Vinpearl Resort and Giang Dien ecotourism zone.

The 37ha land is located in the northwest of the island, which is assessed to be "more appropriate and more convenient to call for investment", because it is near new luxury resorts.

Last September, the Asian Coast Development Ltd. (ACDL), the investor of The Grand Ho Tram Strip resort and casino in the southern province of Ba Ria - Vung Tau, said Harbinger Capital investment fund, the  major shareholder of ACDL had committed to pouring an additional of $50 million in this project. At that time, President of Harbinger Capital Philip Falcone said the increase of capital was urged by Vietnam’s new move in building the legal framework for casino operations.

Specifically, the Ministry of Finance’s latest draft decree on casino business proposed that Vietnamese from 21 years of age can be allowed to enter casinos. This is what most foreign investors desire when they plan to invest in casinos in Vietnam.

The draft decree also requires investors to commit $4 billion and show they have the financial capacity to invest according to their commitment as well as have at least five years of experience in casino business (10 years in the previous draft decree).

The investors will only receive a license for casino development after they disburse 50 percent of the committed investment capital, or at least $2 billion.

The draft decree also says that investors can have one game table and 10 game machines for every $20 million worth of committed investment capital.

ACDL also appointed Mr. Stephen Shoemaker to the position of President cum Chief Executive Officer of the project in Vietnam. This Shoemaker was formerly served as Chairman and Chief Financial Officer at ACDL since 2008, and has over 30 years experience in operating restaurants, hotels and telecommunications. The project has so far disbursed more than $600 million, out of the $4.2 billion of committed capital.

According to data from the Ministry of Finance, seven businesses have been licensed to do casino business. However, besides Ho Tram Strip (become operational in July 2013) and Nam Hoi An (not yet implemented) with committed capital from $4 billion or more, the rest have under $50 million capital.

In this context, the above draft decree is considered a great encouragement to investors. However, since it was published eight months ago, this document has been still in the process of consultation.

Dr. Tran Kim Chung - Deputy Director of the Central Institute for Economic Management – said that the opening of casinos for local people is a trend in the region.

"In the context of integration with the regional and international economy, it is consistent with the general trend as Vietnam allows people to participate in gambling games at casinos," Chung said. However, like many other experts, he said Vietnam needs to have strict rules to limit the consequences of gambling for the economy and society.

Meanwhile, ACDL’s new CEO - Steve Shoemaker – said that there should be close coordination between the legislature, local governments and casino operators to limit the negative impacts on local people.

"In addition to these measures defined in legal documents, casinos should be equipped with advanced security devices of international standards to be able to track players and join the local governments in educating the community."

He also suggested a training program for staff at casinos in identifying and warning those who have symptoms of gambling addiction.

Vietnam currently has two casino projects with investment capital from $4 billion – Nam Hoi An and Ho Tram Strip. According to the most recent adjustments, the investor of Nam Hoi An - Vinacapital - proposed to reduce construction area from 1,538 hectares to 1,000 hectares and increase the size of the first phase of the project up to 500 hotel rooms and 90 table games from 70 tables in the initial licence. The project is scheduled to become operational later this year.

Meanwhile, Ho Tram Strip is a complex of 5 resorts with a total area of over 164 hectares, located along the beach of Ba Ria - Vung Tau. The project has a total registered capital of more than $4.2 billion, to be disbursed in over 10 years. Phase one of the project finished and the resort opened in 2013, including 541 five star rooms, international-standard restaurants, convention centers, a casino area, a golf course...

From now to 2020, after completion, the entire project will have 9,000 5 star rooms, 180 dealer tables, 2,000 game machines, golf courses, and amusement parks ...

VNE