Vietnam Opts To Uphold Casino Ban On Locals

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Wednesday, September 28th, 2016 | Written by Adam Brown

Like a number of other Asian countries with legalized casino industries, Vietnam only allows foreign tourists, and not local residents, to enter and gamble at their establishments. For a brief period of time, it seemed that would all change allowing Vietnam to set up a well-regulated casino industry open to the general public similar to the one in Singapore; but those hopes have now been completely dashed by the Ministry of Finance.

Industry Background

With casino gaming booming in Asia, developers from around the world have long been interested in breaking into the Vietnamese market. In 2013, the ruling body of the Vietnamese Communist Party, the Politburo, subsequently entered into an agreement with a large international company allowing it to build a large casino in the Van Don Economic Zone, which is situated near the border shared with China in the Quang Ninh Province.

At the time, the Politburo said that certain locals would be permitted to play at the casino along with foreign tourists. This would have ended a long-standing standing ban in Vietnam for at least some portion of the population; however, in early September, the Vietnamese Ministry of Finance issued a statement saying that there are no longer plans to lift the ban for anyone.

Critics of the Ministry

As soon as the news broke that the Finance Ministry had quashed hopes of the ban being lifted for local casino goers, critics began slamming the announcement. Many people say that not allowing Vietnamese people to gamble close to home does little to stop locals from gambling. They argue that all that this type of ban does is drive those who want to gamble to places like Macau, Cambodia and Hong Kong. The Chairwoman of Vietnam’s legislature has long argued that the casino ban just causes an outflow of currency and allows neighboring governments to benefit from Vietnamese gamblers.

Another criticism of the ban is that it is undermining Vietnam’s efforts to develop a casino industry that would strengthen its economy; while casino developers from abroad are interested in Vietnam, the amount of interest that can be generated from a casino catering to just tourist is nothing compared to the potential of a casino that opens its doors to all Vietnamese residents.

Arguments for the Ban

The Ministry of Finance has the final say on the ban, and so far, it does not seem willing to budge on its position. However, one representative did say that there are studies underway to examine what kind of impact lifting the ban would have on the country, with concern already having been expressed that allowing Vietnamese to gamble will lead to rampant gambling addiction and open up money laundering opportunities for criminal enterprises. Representatives also point to nearby Cambodia where organized crime has overtaken much of the country’s casino industry, and commenting on the issue, Zach Abuza, an expert on Southeast Asian politics, said:

“I cannot point to any casino in Southeast Asia that has reinvested its revenue in non-gambling ventures or made investments in their host communities. What often goes unreported is the link between casinos and organized crime. Look no further than the casino in Cambodia: this place has been laundering Southeast Asian drug money for nearly two decades.”

Asian Gambling Tourism Booming

Each year, Vietnam is estimated to lose around $800 million worth of tax revenues from gamblers who cross over the border to Cambodia. The pattern is repeated in other Asian countries whose casinos’ ban locals from gambling, but in the meantime countries with more liberal approaches have been reaping the benefits.

Since China launched its anti-corruption and money laundering campaign, for instance, Australia has reported a significant rise in the number of Chinese tourists visiting its casinos. In fact, their numbers doubled between 2015 and 2016, whilst also accounting for 95% of Australia’s VIP segment. As a result, Australian casinos are currently looking into new ways in which to attract even more Chinese and Asian tourists, such as offering more Asian themed attractions. Las Vegas is already ahead of Australia in that regard, and at the end of this year is expected to open its Lucky Dragon Hotel & Casino, with CEO David Jacoby commenting:

“We are filling a niche in Las Vegas and we’re thrilled to bring such a carefully curated array of Asian-focused gaming options, restaurants and amenities to Las Vegas.”