The Vietnamese government’s intention to continue banning non-foreign passport holders from entering casinos may be detrimental to foreign investment in the sector, CNBC quoted analysts as saying.
Earlier this year, a request was submitted to revise the rule, sparking hopes that the newly formed government would loosen the strict regulations. However, in its latest draft, the Ministry of Finance maintained the stance that only foreigners and Vietnamese with foreign passports can access casinos.
Local newspapers said the ruling was based on social concerns regarding gambling addictions, money laundering and other illicit activities.
“We were thinking the government would allow locals to play low-stakes games at least; this announcement is tighter than expectations,” said Michael Kokalari, head of Vietnam research at CIMB.
“On the surface, this is clearly bad news for international integrated resort (IR) developers who viewed Vietnam as one of the prized global greenfield opportunities,” said Grant Govertsen, founding partner of Macau-based research firm Union Gaming Group, in a note.
“It kills any interest for large gaming companies to invest in IR projects,” echoed Shaun McCamley, head of Asian operations at management consulting firm Global Market Advisors.
A motorbike taxi driver waiting for clients in front of the Crown Casino run by Silver Shores International Resort in the Vietnamese central coastal city of Danang. Photo: Hoang Dinh Nam/AFP
“Vietnam was viewed as a potential great investment opportunity should the government allow locals. Las Vegas Sands has been the most visible and vocal major gaming developer who has an interest in Vietnam,” pointed out Govertsen.
Las Vegas Sands Corp along with other foreign casino investors have all expressed interest in Vietnam’s casino industry but have not taken it further mainly because of the ban on locals and an over dependency on foreign tourists, according to worldcasinodirectory.com.
McCamley meanwhile noted that the government's new draft decree was not final. “I was told by my Vietnam connections, that the law has not yet been changed, the draft denying locals access was submitted to the PM Office but no decision has yet been made.”
Union Gaming Securities Asia Ltd, a brokerage firm, believes that if the Vietnam government continues to maintain its gambling ban on locals, it will hurt the country’s chances of attracting foreign investment from integrated casino operators who were looking to develop new casinos in Vietnam.
There are currently around seven licensed casinos in the country, all of whom bet on foreigners alone for growth.
In April 2016, VinaCapital
Group, Macau’s Suncity Group, and Hong Kong’s Chow Tai Fook Enterprises Ltd kicked off the construction of a new casino in the central province of Quang Nam
The Grand Ho Tram casino resort located in the Ba Ria-Vung Tau province, adjacent to Ho Chi Minh City, also wants the ban on locals to be lifted.