Casino town’s luck could run out
Casino town’s luck could run out
A final draft of a casino law has been submitted to the Vietnamese government which, if approved, could lift the ban on Vietnamese nationals gambling on their home turf – a move that some casino operators in the Cambodian border town of Bavet say could be a knockout blow to their struggling operations.
While the legislation’s details have not been publicly released, Lim Kim Seng, chairman of Lucky89 Group, which operates two casinos along the Vietnamese border, said its passage would deeply undermine Bavet’s allure to Vietnamese gamblers.
“We have been worried about this law for a long time and we hope that the Vietnam government won’t let its [citizens gamble on home soil], as this would dramatically affect our business,” he said.
He claimed the border town has already seen slower growth as the number of Vietnamese cross-border excursions has declined in recent years.
“The vast majority of our players and revenue come from Vietnam, and if they continue to stop coming to Bavet the sector will face a lot of challenges to remain profitable,” he said. “It’s already not easy for Cambodian casinos here.”
According to Kim Seng, the Lucky89 casino currently operates less than 20 tables and relies primarily on revenue garnered through slot machines and interactive gambling products, some of which are offered online.
While Bavet is home to nearly a dozen brick-and-mortar casinos, Ros Phirun, deputy director of the financial industry department of the Ministry of Economy and Finance, said that any change in Vietnam’s laws would have little effect on the Kingdom’s burgeoning gaming industry.
“Yes, the law would likely make it difficult for Cambodian border casinos,” he said. “But as a whole it wouldn’t change the sector because gambling is a worldwide industry.”
He added that the casinos in Bavet are generally small operations that only attract a limited clientele. “Bavet does not cater to the VIP market and mostly attracts Vietnamese that come to play with maybe 10,000 Dong [$0.45],” he said.
While the final draft of the casino law has been submitted to Vietnam’s government and the Ministry of Justice, it remains unclear as to how much flexibility the legislation will give Vietnamese players.
Oliver Massmann, general director of law firm Duane Morris Vietnam Llc, said Vietnam’s Finance Ministry has kept the text of the draft law under a tight wrap.
“Whether Vietnamese residents are permitted to enter casinos in Vietnam is a big question that may wait for a decision of the highest level of Vietnam’s political system,” he said.
Massmann said that while there was a concerted push to reform Vietnam’s gaming laws to be inclusive, the country’s Ministry of Public Security recently proposed a decree that lists casinos as a “conditional business”, which only prohibits Vietnamese from playing on gaming machines.
“This may give a hint that Vietnamese may enter casinos if they are ‘permitted’,” he said. “So, though not 100 per cent sure, [it is] likely that Vietnamese may enter casinos, but with specific conditions.”
Nevertheless, the casino decree could be issued as early as July 1. Vietnamese local media has reported that casino reform could bring in $800 million in state revenue annually.
Cambodia, on the other hand, collected $34.7 million in taxes from the Kingdom’s 63 licensed casinos last year.
While casino operators in Bavet are apprehensive about any slowdown in cross-border traffic, Jonny Ferrari, who runs the firm Global Gaming Network and helped implement Lucky89’s Start Live project, which built Cambodia’s first online gaming software, believes that the town can remain profitable.
“We can expect Vietnamese will play in Vietnam casinos once permitted. Still I project that Bavet will sustain [its online operations],” he said, adding that many casinos have been expanding marketing operations in anticipation of the Vietnamese law’s passage.
“The online operations in Bavet are really geared toward Chinese and Vietnamese players,” he said. “If more casinos can adopt credible online platforms, Vietnamese players will choose Bavet because the casinos there provide reward cards where some winnings are provided as accommodation.”
He noted that while every Cambodian land-based casino has the right to operate a gaming website, Bavet casinos have yet to invest in the full market potential.
“The problem is that casinos either don’t know or are too lazy about online gaming,” he said. “They are taking it for granted by running sites that only cater to the Chinese underground, when they could be installing software that is easily marketable and can build regional brand awareness.”
