Casino Investment in Vietnam
Gambling in Vietnam is considered to have adverse impacts on social security, order, safety, and even social ethics. Consequently, gambling is restricted by law.
In 1992, the Vietnam Government granted permission, on a pilot basis, for businesses to engage in prize-winning games for foreigners only. Such games were permitted at prize-winning electronic game locations (i.e., locations with only gaming machines) and thereafter casinos (i.e., locations with both gaming machines and table games). Vietnamese people were not allowed to play at prize-winning gaming locations until the Pilot projects for Vietnamese gamblers in 2017. In that year, the Vietnam Government approved a three-year pilot program allowing Vietnamese people to play in casinos in Vietnam on strict conditions. The two casinos selected as pilot projects were Corona Phu Quoc Casino (Kien Giang) which is in operation and Van Don Casino (Quang Ninh) which is still under construction. The goal was to attract more tourists and investors, and to reduce foreign currency outflows from gamblers heading overseas and any loss of State budget revenues.
Existing casino projects
According to the Ministry of Finance, by the end of 2021, there were 63 prize-winning electronic game locations and nine casinos in operation. In addition, there are three casinos currently under construction.
1. Do Son Casino (Hai Phong) – Haiphong Joint Venture International Tourist Company Limited
2. Loi Lai Casino (Quang Ninh) – Hai Ninh Loi Lai Quang Ninh Joint Venture
3. Royal Casino Ha Long (Quang Ninh) – Royal International Joint Stock Corporation (RIC)
4. Hong Van Casino (Quang Ninh) – Hong Van Hotel Joint Stock Company
5. Aristo Casino (Lao Cai) – Lao Cai International Hotel Joint Venture
6. Silver Shores Casino (Da Nang) – SilverShores Investment and Development Limited Company
7. South Hoi An Casino (Quang Nam) – Nam Hoi An Development Co., Ltd
8. Ho Tram Casino (Ba Ria - Vung Tau) – Ho Tram Project Company Limited
9. Corona Phu Quoc Casino (Kien Giang)– Phu Quoc Tourism Development and Investment Joint Stock Company
1. Van Don Casino (Quang Ninh)– Van Don Sun Joint Stock Company
2. Paradise Cam Ranh Casino (Khanh Hoa) –KN Cam Ranh Company Limited
3. Laguna Lang Co Casino (Thua Thien - Hue) – Laguna (Vietnam) Co., Ltd.
New proposalsBased on public news, three provinces have applied for approval to construct new domestically owned casino projects: Khanh Hoa Province (in a tourism and entertainment complex on Hon Tre Island), Da Nang Province (with Ba Na Hill project) and Binh Thuan Province. Currently, only Khanh Hoa and Da Nang provinces are being considered for approval due to their rapid international tourism development and large investment capital. The total investment capitals in Da Nang and Khanh Hoa are VND16,000 billion (expected to increase) and over VND25,700 billion, respectively.
Recently, in their proposals on development of the night-time economy, the People’s Committee of Ho Chi Minh City discussed a pilot program allowing Vietnamese people over the age of 18 to play at casinos in five-star hotels and at major tourist attractions on strict conditions similar to those applicable to the existing pilot projects for Vietnamese gamblers. This new proposal is regarded as a preferential policy for tourism investment, especially for international and regional-scale entertainment areas. The proposals will apparently be submitted to the National Assembly for consideration.
Proposal to extend the pilot period
Of the two pilot projects, Corona Phu Quoc Casino came into operation in 2019 and has a pilot period of three years (until 2022). It is reported that, as of September 2021, this casino has attracted over 240,500 visitors, of which Vietnamese guests account for 65 per cent. The total amount of this casino's contribution to the State budget is over VND1,600 billion, of which the amount collected from tickets sold to Vietnamese people is VND130 billion.
As the COVID-19 pandemic has severely affected tourism and casino businesses, the Ministry of Finance has submitted to the Vietnam Government a proposal to extend the pilot period from three years to five years (until 2024) so that a more accurate and complete assessment by the Ministry can be ensured. To date, there has been no official approval of the extension of the pilot period.
Additionally, it has been reported that the Vietnam Government is not considering the pilot extension proposal for other casinos. However, given certain positive outcomes from the operation of the existing pilot project at Corona Phu Quoc Casino, this decision may be revisited.
Regulatory frameworks and new regulations
Prize-winning electronic game locations
1. Decree 121 issued by the Government on 27 December 2021 on business of prize-winning electronic games for foreigners, has been replaced by Decree 86 of the Government dated 12 February 2022.
1. Decree 03 issued by the Government on 16 January 2017 on casino businesses (effective as of 15 March 2017);
2. Circular 10 issued by the State Bank of Vietnam on 30 August 2017 on foreign exchange management for casino businesses;
3. Circular 102 issued by the Ministry of Finance on 5 October 2017 guiding Decree 03; and
4. Circular 146 issued by the Ministry of Finance on 29 December 2017 on management and supervision of casino tax collection.
Before 15 March 2017, a casino was generally covered under the definition of prize-winning electronic game locations and accordingly governed by Decree 86 on business of prize-winning electronic gaming for foreigners (Decree 86). However, in 2017, the Government issued Decree 03 specifically regulating the investment and operation of casino businesses (Decree 03).
A prize-winning game business and a casino can be distinguished from each other by their scope of gaming activities, investment objectives and capital. To put it simply, a prize-winning game business (without table games) can be part of a five-star hotel with a legal capital of up to VND500 billion (previously VND200 billion) whereas a casino requires the establishment of a tourism and entertainment complex that would normally include businesses such as hotels, service areas, tourism, commerce, entertainment and meeting centers and have an investment capital of US$2 billion.
On 12 February 2022, Decree 121 (Decree 121) took effect replacing Decree 86. Decree 121 introduces a number of new regulations relating to prize-winning game businesses, which broadly align with the current regulations on casino businesses under Decree 03.
The key points in Decree 121 include:
1. Increase of minimum legal capital for conducting the prize-winning game business
The prize-winning game business is a conditional business activity. An investor must have a minimum legal capital of VND500 billion (previously VND200 billion under Decree 86) and prove that it has been profitable in the fiscal year immediately preceding the year of submission of the application.
2. Longer duration for the archives of all footage and monitoring book
At a prize-winning game location (Gaming Location), there must be electronic equipment and a camera system which regularly monitor and supervise all activities within the Gaming Location (24/7). Under Decree 121, all footage must be fully archived for a minimum of 180 days (similar to the six months applicable to casinos) from the date of recording. Companies hosting a prize-winning game business must upgrade their camera system within 180 days after 12 February 2022.
A monitoring book, in the form of paper or electronic information, must record all entries and exits to and from the Gaming Location, and be kept for at least three years for the management, supervision, and inspection by competent State authorities. For casino businesses, the archive period of the monitoring book is two years, except for pilot projects which have Vietnamese people playing, where it is extended to five years.
3. Management and storage of gaming equipment, facilities, and tokens
Like gaming machines in casinos, the minimum fixed prize payment ratio for slot machines is 90 per cent (including cumulative prizes) and must be installed in the machine beforehand. Prize payment ratios must be specified in the game rules. If there is a change in the prize payment ratio, the enterprise must engage an independent valuation organisation in accordance with the law to re-evaluate the machine before putting it into use.
Any technical documents, which are provided by manufacturers, suppliers, or independent valuations organisations evidencing the satisfaction of conditions of those electronic gaming machines as required by law, and maintenance and repair contracts in respect of electronic gaming machines, must be archived for purposes of management, monitoring, and inspection by competent State authorities.
With respect to storage, (i) electronic gaming machines, gaming equipment, and tokens that have yet to be put into operation or are temporarily not used and (ii) those that are in the process of being reexported, or destroyed, must be stored in a separate room in the Gaming Location. This regulation is also proposed by the Ministry of Finance for casino businesses.
4. Detailed regulations on the role of the Manager of a Gaming Location
A managing and operating person (Manager) of a Gaming Location is newly defined as a person who is assigned to manage, operate and supervise all activities of the prize-winning game business at the Gaming Location. Although the requirements and qualifications applicable to the Manager of a Gaming Location are not new (i.e., must have (i) a university degree or higher and (ii) at least three years’ of experience in managing and operating a prize-winning game business), under Decree 121, the Manager of the Gaming Location must work full time at the Gaming Location and regularly manage, operate and supervise the prize-winning game business in order to ensure compliance with the regulations.
If the Manager does not satisfy applicable requirements, another eligible Manager must be appointed within 60 days from the date of notice from the Ministry of Finance. Otherwise, the enterprise may be suspended until a new eligible Manager is appointed.
5. Foreign currency and other foreign exchange activities; administrative penalties
Before Decree 121, the regulations on receipts and payment of foreign currency and other foreign exchange activities were provided separately by the State Bank of Vietnam (previously under Circular 15). Decree 121 includes such regulations and the application for obtaining the license as well. Nevertheless, no major amendments have been introduced.
Administrative penalties relating to the prize-winning game business are not contained in Decree 121 but are now prescribed separately under Decree 137 of the Government which took effect on 1 January 2022.