Over the last eight years, Stephen Alan Crystal – a former Las Vegas casino owner who sees tremendous opportunities for casino investment in Vietnam – has scoured the country in search of opportunities. He believes the timing is perfect, as Vietnam continues to bolster its regulatory casino framework and loosen rules that prohibit locals from gambling.
“I returned to Vietnam earlier this year and had high hopes for a casino development deal I signed on Phu Quoc Island. We are now approaching the Year of the Dog and I expect to return to Vietnam in January 2018 to finally get over the hump in moving forward with existing casinos in Danang and Ho Chi Minh City, a new casino development in Phu Quoc, as well as with sports betting and eSports,” Crystal told VIR.
Crystal is not the only one who sees potential in Vietnam’s casino sector. Many international casino operators have been eyeing the Vietnamese casino market, and are increasing their involvement through stake acquisitions, expansions, and greenfield investments.
Shifting the odds American real estate firm Jones Lang LaSalle (JLL) said in a recent report on the future of the Vietnamese gambling industry that major international casino operators have been eyeing the local market.
According to JLL, the recent lifting of a ban that prohibited locals from playing at casinos would have quite a favourable effect on the industry. It is believed that more international investors will be attracted to Vietnam and will invest in its casino and tourism industries.
Vietnam’s eagerly awaited trial period that allows locals to gamble in casinos will begin on December 1, following the Ministry of Finance’s recently issued Circular No. 102/2017/TT-BTC which provides additional details to Decree No. 03/2017/ND-CP – a decree on casinos that came into effect in mid-March. These new regulations complete the framework for casinos, and pave the way for investors to make their entrances.
Soon after the circular was released, a delegation of UK investors visited the central province of Quang Ngai to seek investment opportunities in high-end resorts, casinos, and other tourism services in the province.
The Australian gaming firm Donaco International Ltd. confirmed its long-term plan to pour $2 billion into its existing Lao Cai International Hotel. The move comes as the Vietnamese government prepares to launch a three-year trial period to allow local residents to gamble in casinos. But the government has insisted on a $2 billion minimum for investments in new casino projects.
Donaco CEO Joey Lim Keong Yew said in a report that his company hopes to expand its footholds in Cambodia and Vietnam into other Asia-Pacific markets.
In early November, Suncity Group Holdings filed papers with the Hong Kong Stock Exchange confirming its plans to invest in 34 per cent of a resort and casino project in Hoi An – a coastal city in the central province off Quang Nam. The filing notes that the resort’s first phase – of a planned seven – began construction in April 2016, and is expected to commence operations in the second quarter of 2019. The reason behind the location is Hoi An’s central location, which makes it more accessible than the competition.
Suncity is bullish on its project’s ability to compete with other integrated resorts, as well as two other major resorts currently in development, on Phu Quoc Island and in the northern province of Quang Ninh’s Van Don Economic Zone.
While The Grand Ho Tram Strip in the southern province of Ba Ria-Vung Tau is currently only allowed to serve foreign players, its operators hope it is included in the pilot project under which locals will be allowed to gamble in Vietnamese casinos.
The first phase of The Grand Ho Tram Strip features a 541-room hotel and was opened in July 2013. In October 2015, the resort debuted The Bluffs, an 18-hole golf course designed by golf legend Greg Norman.
Current construction includes a 559-room second tower for The Grand – dubbed The Beach Club – which the promoter says is designed to further expand the entertainment amenities at the resort and is likely to open in early 2018.
In addition, US-based casino operator and hospitality firm Hard Rock International Inc. is pursuing a licence to develop a casino at Laguna Lang Co Resort in the central province of Thua Thien-Hue. A senior executive told foreign media last month that the company is willing to begin construction as soon as the Vietnamese government gives them the go-ahead.
Other casino resorts are also under construction in Vietnam, such as the one in Van Don and on Phu Quoc Island.
The Van Don project is being developed by Vietnam’s Sun Group. It is located in a remote area around 160 kilometres east of Hanoi. The Phu Quoc casino is also being developed by a local firm, with Vingroup holding the reins.
Trinh Van Quyet, chairman of FLC Group, which is expanding casino business in Quang Ninh, said, “The expansion plan of FLC is rather ambitious because casinos are a relatively new field for Vietnamese enterprises, as they require large initial capital investment as well as experience in the field.”
From underdog to favourite JLL pointed out in its report that the southern part of the nation will benefit greatly from the lifted ban, as the second phase of The Grand Ho Tram Strip integrated resort project is currently under development.
Nguyen Hoang Hai, deputy chairman of the Vietnam Association of Financial Investors, said that allowing residents to gamble in local casinos has been seen as one of the most effective ways to stimulate consumer spending. Aside from adapting pro-gambling policies, Vietnam has ramped up its infrastructure spending to support the influx of foreign tourists to the country.
“There are a lot of projects such as the new international airport that are serving integrated resorts, and we’ll see a number of highways connecting the integrated resorts to the Chinese border and to the metropolitan area. In two years or less, you’ll see a lot of activity,” Hai said.
Although a few more pieces of the puzzle need to be aligned before the benefits of Decree 03 can be reaped, it certainly looks as though things are moving in the right direction.
Vietnam is following the lead of other Asian governments that have endorsed the legalisation of gambling and games of chance.
Former Las Vegas casino owner Stephen Alan Crystal remarked that casino operators’ financial success in the Asia-Pacific region is strongly dependent on “the right planning”. Thus, a good strategy could encourage investors to move forward with their plans and pursue new gambling-related opportunities.
He said the risks and challenges for any investor entering Vietnam are already well established, but the potential benefit of being the first mover in any new market is a great motivator.
Vietnam Investment Review