Firms bet on law change
Firms bet on law change
Foreign investors remain eager to develop horse racing projects, as they await the Vietnamese government’s final decision on its legal status.
In the latest development for the betting sector, president of South Korea’s Horse Race Group, Choi Hank Soo, expressed ambitions of setting up a $500 million horse racing track and 27-hole golf course complex in the northern province of Bac Ninh – around 30 kilometres from Hanoi’s downtown. The South Korean group is not the only investor interested in tapping into the betting sector in Vietnam.
Other projects include the $1.5 billion GOMax proposal to develop a horse racing course in Vinh Phuc province, about 50 kilometres northwest of Hanoi and a $100 million Australian Golden Turf Club Limited Company’s racecourse in the south-central province of Phu Yen. Meanwhile, Hanoi Tourism Corporation and Korea’s Global Consultant Network have submitted a proposal to build a complex with a hotel, commercial and recreational facilities, a golf course, and horse racing track in Soc Son, on the outskirts of Hanoi.
After 20 years of discussions on whether or not to legalise horse racing in Vietnam, a decision on the decree submitted to the government in June 2016, regarding betting services for specific sports games, is hotly anticipated.
“It is noted that, while it remains unknown whether the decree on horse race betting will be issued, investors should not play the ‘wait and see’ game,” lawyers at Duane Morris in Vietnam recommended.
Stephen J. Karoul, a US-based international casino marketing consultant, who has advisory contracts in casino industry in Vietnam, said the underground sports betting industry here is likely to be worth “in the hundreds of millions” of dollars.
He added that Vietnamese citizens travel to neighbouring Cambodia to gamble in casinos. But compared with the casino industry, he said, sports betting has “a much larger client base”.
Nguyen Dinh Chuc, deputy director of the Institute of Regional Sustainable Development, reported at a recent tourism forum that Vietnam spent $500 million on bets for Euro 2016.
Karoul said that formalising sports betting here could hold big economic potential, as “it would be very successful because of the enjoyment that the local Vietnamese get from betting on sports teams.”
However, along with massive investment in recently proposed horse racing projects – numerous existing projects have yet to reach the construction phase – some are facing the risk of being revoked due to long-delays in construction.
Last week, the southern province of Binh Phuoc issued a decision to revoke the investment certificate for a $100 million horse racing course and recreational complex due to long-delays in construction.
In Vietnam so far, horse and dog race betting services have been allowed in two pilot projects, in Phu Tho and Vung Tau, but the horse tracks were closed in 2011 after seven years of operation. Those courses were invested by Thien Ma Company and Sport Entertainment Services Company.
While sports betting is legal in other countries, the sector has faced some losses. In the US, horse racing proved to be unprofitable for the operator of New York’s thoroughbred tracks. A recent audit revealed that the New York Racing Association lost more than $109 million on its traditional racing operations between 2010 and 2014. Macau Horse Racing Company has also found horse racing unprofitable, announcing that its losses in 2015 increased 72.7 per cent compared to 2014.
