Vietnam _New Guidance on Electronic Gaming for Foreign Gamers

1. New guidance on electronic gaming for foreign gamers - Vietnamese
gamers to be addressed in new rules within this year!
By Oliver Massmann (omassmann@duanemorris.com)
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Following the issue of Decree 86/2013/ND-CP on electronic gaming for foreigners (Decree
86), the Ministry of Finance recently issued Circular 11 to provide guidance on the operation
of electronic gaming businesses. Circular 11 took effect on 15 March 2014.
Number and type of gaming machines
As noted in our August 2013 issue, an enterprise which conducts the business of electronic
gaming must obtain a ‘certificate of satisfaction of conditions for a gaming business’ (in
addition to an investment certificate) (SC Certificate). The SC Certificate will reflect the type
and number of gaming machines that an enterprise is permitted to have. Circular 11 lists the
following seven types of gaming machines which an enterprise is permitted to operate:
1. coin slot machines;
2. roulette;
3. automatic baccarat;
4. electronic blackjack;
5. sic bo or tai xiu machines;
6. horse racing and mahjong; and
7. poker machines.
Items 2-7 above are expressed to be permitted only if they are completely automated and do
not require participation by members of staff.
The total number of gaming machines of the enterprise must not exceed the permitted number
stipulated in the SC Certificate. In addition, the number of gaming machines belonging to
each of categories 2-7 above must not exceed 15% of the total number of gaming machines
operated by the enterprise. No maximum percentage is applied to coin slot machines.
Circular 11 also requires the enterprise to lodge a report to the Ministry of Finance, local
Department of Finance, local Department of Culture, Sport and Tourism and local
Department of Taxation, describing the total number and type of gaming machines, including
the ratio of each type, within 5 business days from the date of commencement of operation.
Any variation in the number and type of each machine must also be reported to each of these
Departments and Ministries.
Origin and verification of gaming machines
Circular 11 introduces new and stricter requirements on the origin and verification of gaming
machines. These new measures require machines to be supplied by a license
producer/supplier of gaming machines, and independently verified by an independent
verification organization. Each producer/supplier and independent verification organization
must be licensed to operate in Macau, as announced by Macau’s Gaming Inspection and
Coordination Bureau on its website from time to time. The Vietnamese enterprise engaged in
electronic gaming must keep all relevant documents of the producer/supplier and the

2. independent verification organization verifying these requirements, and must provide these
for inspection by local authorities from time to time.
Back-up equipment for gaming machines
Enterprises licensed with an SC Certificate are permitted to purchase back-up equipment for
gaming machines. The following items are permitted to be purchased for replacement where
necessary:
• Screens;
• Cash and token receipt systems;
• Prize payment systems;
• Archiving systems; and
• Circuit boards.
All back-up equipment must be 100% new and cannot exceed 10% of the number of gaming
machines operated by the enterprise for which that item of back-up equipment would be used.
Where back-up equipment is used by an enterprise to replace items in gaming machines, that
enterprise must keep detailed records specifying the type of gaming machine, the type of
equipment and the reason for replacement.
Procedures to obtain an SC Certificate.
Circular 11 sets out detailed procedures on how to obtain a new SC Certificate, and how to
amend, re-issue or extend an SC Certificate.
Accounting system and reporting
Each enterprise operating electronic gaming equipment must conduct separate cost
accounting for revenue, expenses and profit of its gaming business, and must separately
monitor items related to the gaming business in its system of accounting books and financial
statements.
Circular 11 also requires an enterprise to submit to local bodies the following reports (in
addition to its financial statements) on a quarterly and annual basis:
i. Report on the number and type of gaming machines;
ii. Report on the purchase, use, re-export or destruction of equipment of gaming machines;
and
iii. Report on the status of operation of the gaming business of the enterprise.
Despite the lack of official recognition of casino businesses in Vietnam, at least in respect of
Vietnamese customers, Circular 11 indicates a potential increase in the Vietnamese
government’s support of certain types of electronic gaming. However, these regulations
continue to apply only in respect of foreign players. We will report soon on new legal
developments to allows Vietnamese nationals to gamble in Vietnam
Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com in
case you have questions on the anbove.