Casino rivalry set to heat up

The relocation of the project is included in the revised zoning development plan for the Phu Quoc island in the southern province of Kien Giang which has received prime ministerial approval. The new location is expected to make it easier to attract investors, as it is adjacent to the Vinpearl Phu Quoc, a 5-star-resort complex on the island invested in by Vietnam’s leading property developer Vingroup.

Although the project investment plan was approved by the Poliburo some years ago, its details and the specific investors were not ratified by the prime minister until January 2015. It is said that the investor of the Phu Quoc casino-integrated recreational complex is a leading property developer in Vietnam.

If it is so, the potential investor is most likely a rival of Sun Group, which is pursuing its plan to become an investor in the van Don casino-integrated recreational complex in the northern province of Quang Ninh. Sun Group is also making moves on the Van Don international airport project.

Even though the Phu Quoc and Van Don projects have only been approved in principle, they are being hailed as the beginning of a new wave of casino investment in Vietnam.

In a similar development, the Thua Thien-Hue Provincial People’s Committee has proposed that the prime minister add a casino project to the Chan May-Lang Co Economic Zone (EZ), as part of the national development plan. The people’s committee expected that this would tap into a future increase in the number of international tourists, which is forecast to reach five million in 2014.

The local authorities said that foreign investors, including many from Hong Kong and Singapore, had shown an interest in building a tourism complex with a casino, in the EZ thanks to its favourable geographical conditions and infrastructures.

Thua Thien-Hue has been the second locality this year that has sought permission from the government to develop a casino project. Over one month ago, the central province of Khanh Hoa also submitted the same proposal on building a casino-integrated recreational complex in the northern Cam Ranh peninsula. However, the Khanh Hoa proposal was turned down.

Previously, Vietnam licensed a number of tourism complexes with casinos targeting foreign visitors. They include the Ho Tran Strip project worth US$4.2 billion in the southern province of Ba Ria-Vung Tau, as well as others in Haiphong, Lao Cai, and Danang.

Meanwhile, the Nam Hoi An xomplex, worth US$4 billion in the central province Quang Nam, has shown no signs of progress, despite the complex’s existing investor, Vina Capital, naming Hong Kong’s Chow Tai Fook and Macau’s SunCity as the new investors to replace Malaysia’s Genting, which announced its with drawal from the project late in 2012.

Industry insiders blamed the delay of the Nam Hoi An project and other for the government’s yet-to-be-issued regulation on casino business, with the central issues a legal framework on this matter, opening a casino business will still remain a contentious issue in the country.

Despite being a sensitive business, casinos remain an attractive option for investors and localities, especially as the market has been valued ar US$3 billion.

Vietnam is facing fierce competition in this market from other casinos already operational throughout Asia. In addition, the sharp fall in the number of tourists from China has eaten away at the main source of visitors targeted by Vietnamese casinos.

These existing problems are being compounded  by the Republic of Korea, Singapore, Malaysia, and Cambodia licensing new casino projects. Furthermore, Chow Tai Fook has opened a casino in Macau, while Caesars Entertainment Corp, one of the leading casino business in the US, is planning to build a US$1 billion casino project in the Philippines.