VIETNAM - Gaming and casino laws – Where does Vietnam stand now?

1. VIETNAM - Gaming and casino laws – Where does Vietnam stand now?
By Dr. Oliver Massmann
On 20 January 2017, the Government issued a long-awaiting casino business Decree No.
03/2017/ND-CP. This Casino Decree for the first time allows local Vietnamese to gamble at
specific casinos approved by competent authority on a 3-year trial basis. According to public
media, only 02 casinos are open to Vietnamese individuals on a 3-year pilot scheme, which are
located within complex resorts in Phu Quoc District, Kien Giang Province (South Vietnam)
and Van Don District, Quang Ninh Province (North Vietnam). A small likelihood that Ho Tram
Resort would join the list.
Four days later, the Government issued Decree No. 06/2017/ND-CP, which also for the first
time legalizesinternational soccer betting in addition to horse racing betting and greyhound
racing betting. This Betting Decree together with the Casino Decree have fully opened the door
for gaming business in Vietnam.
The issuance of these Decrees is the Government’s attempt to retain tax revenue resulting from
casino activities and limit foreign currency loss to other neighboring countries. According to a
survey, Vietnam loses about USD800 million in tax revenue annually from gamblers who cross
the border to Cambodia. The loss may continue rising if the restrictions applied to local
Vietnamese are not fully lifted in the future, as Vietnam’s ultra-rich population has been
growing faster than any economy in the world (320% from 2006 -2016. The highest growth is
expected to continue during 2016- 2026 (about 170%).
These Decrees take effect in the midst of rising tourists, especially mid- and high- income ones
to Vietnam. In July 2017, the United Nations World Tourism Organization ranks Vietnam as
the 7th
country with highest tourism development speed, only after Nepal and Korea in the
region. The General Statistics of Vietnam also announced that in the first six months of 2017,
international tourists to Vietnam increase by 30.2% compared with the same period last year.
Tourists from Asia mainly account for those visiting Vietnam, followed by European visitors.
We expect an increasing number of gamblers from Macau, Hong Kong and China will visit
Phu Quoc this year.
Almost right after the issuance of the Casino Decree, many foreign investors have looked at
Vietnam’s casino market such as Las Vegas Sands, Banyan Tree, Crown, Chow Tai Fook and
Sun City. Although the Casino Decree sets out a 3-year trial period, investors should not wait
until such period lapses. The casino Decree is the best opportunity ever for them until now and
they have been waiting for this for too long already (about 8 years). It could be risky to invest
as no one knows what might happen after these three years. However, as said, the opportunity
is out there and investors should rush to meet the 3-year deadline. The Casino Decree sets out
very strict conditions for foreign investors to be qualified for the Certificate of registration of
investment in casino-included entertainment complex, including the requirement that the
project contain at least hotels, service, tourism, commercial and entertaining areas and
conference centers. The minimum investment capital must be USD2 billion. Thus, for new
investors, it will take them around two years to apply for the license and build the complex.
For existing investors in Vietnam, they will need at least one year to expand the project to meet
requirements in the Casino Decree.
History shows that casino establishments are often located in difficult economic-socio areas or
areas where national security must be balanced. Thus, investors should consider these factors
in addition to the investment project’s level of contribution to local tourism development and

2. budget. Currently, there are seven licensed casinos in Lao Cai, Mong Cai, Do Son, Bac Ninh,
Ha Long and Da Nang. Four complex resorts are now at the development stage, namely Van
Don (Quang Ninh), Nam Hoi An (Quang Nam), Phu Quoc (Kien Giang) and Ho Tram (Vung
Tau).
Casino business, as defined by the Casino Decree, means prize winning games on (i) electronic
gaming machine with prizes (i.e. - men vs. machine) and (ii) gaming table with prizes (i.e. –
men vs. men).
There are 2 types of gaming machines:
1. Gaming machines used for prize-winning business for foreigners. These are defined
as gaming machines with prizing programs and special equipment for casino games.
Prize-winning electronic gaming machine means a specialized electronic device to play
prize-winning games installed therein. The playing process between players and
machines is entirely automatic.
Prize-winning electronic games are lottery games played on prize-winning electronic
game machines by players who pay money and may win money.
2. Gaming machines which the players receive prize not to be converted into cash or
kind any form, or to be converted in small things such as toys, candies, etc. and not
being gaming machines for prize-winning business for foreigners.
If an investor wants to do business in gaming machines Type 1 (import, distribute or do prize-
winning business), they must have a Certificate of satisfaction of conditions for business issued
by the Ministry of Finance. One of the conditions to get such certificate is they must have a
“tourism residential establishment which has been classified as five star or higher by the
competent authority”. An investor then needs to cooperate with such hotels in Vietnam on a
BCC contract basis.
If an investor wants to do business in gaming machines Type 2, there is no restriction on foreign
ownership. However, the machines must satisfy certain technical requirements and if they
intend to open a gaming shop, such shop must also comply with conditions in law.
Meanwhile, casino business is also treated as a conditional business sector the satisfaction of
which is evidenced by a certificate of satisfaction of casino business conditions (“Casino
Business License”). A casino must be located inside a larger resort complex or the like. Local
Vietnamese will be permitted to gamble at specific casinos approved by competent authority
on a 3-year trial basis (i.e. – calculating from the first day opening of the authorized integrated
resorts) if they are 21 year-old or above and has monthly salary of VND10 million (about
US$440) or more, just to name a few conditions. Number of gaming tables and gaming
machines depends on investment size. That is, for each US$10 million lot that the investor
actually releases, a package of one gaming table and ten gaming machines are permitted.
Growing mid to high income people will have more demand for high class integrated resorts.
If the Vietnamese are allowed to gamble, development in integrated resorts with casino is a
smart decision to make profit in Vietnam. In addition, the government will benefit from tax
payments from these resorts and casino businesses.
***
If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann
underomassmann@duanemorris.com. Dr. Oliver Massmann is General Director of Duane
Morris Vietnam LLC.

3. Thank you very much!