Introduction
Historically, the Vietnamese government has had an ambiguous and fluctuating stance towards the gambling and online gambling industries.
However, following the initiation of the canal cooperation project between China and Cambodia, it is likely that the Vietnamese authorities may change their attitude towards the gambling industry, possibly adopting a more tolerant approach.
What's going on?
About Online Gambling, Vietnam's Government Hesitates
First, let's understand the development of the online gambling industry in Vietnam and the authorities' attitude towards it.
The gambling industry in Vietnam, especially online gambling, has shown rapid development in recent years. Despite the Vietnamese government's strict restrictions on such activities, illegal online gambling platforms continue to proliferate, attracting significant domestic and foreign gambling funds. According to unofficial statistics, the annual transaction volume of Vietnam's online gambling market has reached billions of dollars, making it a significant grey area of the economy.
Specific Data
Market Size: It is currently impossible to calculate the size of Vietnam's online gambling market, but some data suggest that it might be much larger than imagined. In December 2021, the Ho Chi Minh City police cracked a case involving more than 87 trillion Vietnamese dong (about nearly $4 billion), indicating the considerable scale of online gambling activities in Vietnam.
User Numbers: There are millions of active online gambling users in Vietnam, including many young people and high-income groups.
Currently, operating gambling websites in Vietnam is illegal, forcing those seeking to bet on sports events or casino games to turn to underground channels. However, for Vietnamese citizens seeking a legal online betting experience, they can choose to join international gambling companies that have the necessary permissions and strict regulations from their home countries. These multinational platforms not only welcome Vietnamese players but also provide Vietnamese interfaces and support local currency transactions, greatly facilitating user operations and experiences.
It is worth noting that since these international gambling websites are legitimate, with complete operating qualifications and authorizations, the Vietnamese government's ability to directly intervene in their operations is limited. Under international legal frameworks, individual users typically do not bear legal responsibility when participating in such legal online betting activities. Despite this, the Vietnamese government still monitors some websites and takes necessary censorship or blocking measures to maintain its regulatory stance. In fact, the Vietnamese government has effectively blocked hundreds of illegal gambling websites.
However, this has not deterred the enthusiasm of the Vietnamese public for online gambling. In the local area, gambling entertainment such as Pai Gow, roulette, fish-shrimp-crab, shaking hoe, fighting fish, and color disc are highly sought after by players. Meanwhile, a batch of popular online gambling websites has emerged in Vietnam, including 1xBet, Fun88, BK8, Dafabet, M88, and others.
Since the online gambling market has already become significant, the Vietnamese government naturally cannot ignore it. In fact, more than ten years ago, the authorities began discussing the liberalization of the gambling industry. Whether to provide a relaxed policy environment for the gambling and online gambling industries or to fully open them up has been a headache for the Vietnamese government over the years.
The following are the adjustments and changes in Vietnam's gambling industry policies over the past decade:
Policy Adjustments
Pilots and Research:
In 2012, the then Director of the Vietnamese Government Office, Vu Duc Dam, stated at a regular press conference that the government was researching the legal mechanisms of the gambling industry and seeking opinions from relevant departments, showing the Vietnamese government's cautious attitude towards gambling policy. The Vietnamese government has conducted pilot projects in the gambling industry, such as small-scale trials on Phu Quoc Island. At the same time, the authorities also researched the legal mechanisms of the gambling industry and sought opinions from relevant departments.
Specific Approvals:
In 2017, the then Prime Minister of Vietnam, Nguyen Xuan Phuc, issued a decree approving the horse racing gambling industry, marking an important change in Vietnam's gambling policy. However, this did not mean that the gambling industry was fully liberalized in Vietnam; instead, horse racing gambling was specifically approved with a series of restrictive conditions.
Enhanced Regulation and Crackdown:
It is worth noting that while liberalizing the gambling industry, the Vietnamese government also strengthened its crackdown on illegal gambling and football betting activities. For example, in 2022, the Prime Minister of Vietnam, Pham Minh Chinh, instructed the Ministry of Public Security to crack down and destroy online and offline gambling groups and football betting activities.
The cautiousness in policy is also reflected in the statements of officials. Officials from the Vietnamese Ministry of Public Security, Ministry of Culture, Sports and Tourism, and other departments usually emphasize the harmfulness of illegal gambling in public occasions and call on the public to stay away from illegal gambling activities. These speeches reflect the Vietnamese government's zero-tolerance attitude towards illegal gambling activities and its determination to strictly regulate the gambling industry.
Do you see what's happening?
The Vietnamese government has not refused the gambling industry but prohibits illegal gambling and hopes that the industry can develop under strict monitoring!
Has the government cracked down on the online gambling industry? Yes!
Has it done so with full force? Obviously not!
The impression is that the legalization of the gambling and online gambling industries in Vietnam is just one step away!
The global leading wealth-generating platform PASA (www.pasa365.com) believes that the Vietnamese authorities' hesitation mainly stems from the following factors:
Economic considerations: The gambling industry is a highly profitable industry in many countries and regions, capable of generating substantial tax revenue for the government. The Vietnamese government may hope to promote economic growth and increase fiscal revenue by legalizing the gambling industry to some extent. However, this also requires weighing the social problems and moral risks that the gambling industry may bring.
Social opinion and moral concepts: The gambling industry is controversial in many societies because it is closely linked to gambling, dependency, and crime. The Vietnamese government needs to consider public opinion and moral concepts regarding the legalization of the gambling industry to avoid causing social dissatisfaction and instability.
Regulatory capacity and enforcement intensity: Legalizing the gambling industry requires the government to have strong regulatory capacity and enforcement intensity to ensure the legal operation of the gambling industry and prevent the breeding of illegal gambling activities. However, insufficient regulatory and enforcement capabilities may lead to chaos and loss of control in the gambling industry, bringing negative impacts to society.
Political factors: Political factors may also influence the Vietnamese authorities' attitude towards the gambling industry. Internal conflicts of interest within the government, coordination difficulties between different departments, and interference from external forces may complicate the formulation and implementation of gambling industry policies.
But what if the pressure of economic slowdown intensifies?
Vietnam's Economy Faces Severe Challenges
In recent years, Vietnam's economy has experienced significant growth, especially in 2022, when its Gross Domestic Product (GDP) reached a peak, growing by 8.02% year-on-year, the largest increase since 1997. However, in 2023, Vietnam's economy began to show signs of slowing down.
Here are some key data points:
2022: Vietnam's GDP growth rate reached 8.02%, and its Gross Domestic Product surpassed $400 billion for the first time.
Q1 2023: Vietnam's GDP grew by 3.32% year-on-year, a new low since 2021, significantly slower compared to the growth rate in 2022.
Full year 2023: Vietnam's GDP growth rate was 5.05%, still positive but unable to meet the government's target of 6.5%, and lower than the performance in 2022.
2024: There is no complete annual data yet, but as of July 29, 2024, the data released shows that the GDP for 2023 was $4297.17 billion, slightly higher than $4103.24 billion in 2022, but the growth rate was only 0.4076%. This figure appears to be more like the nominal GDP growth rate rather than the actual GDP growth rate, as the actual growth rate usually excludes inflation factors.
The slowdown in Vietnam's economy is due to factors such as weak global demand, intensified anti-corruption efforts, and declines in smartphone and electronics exports. These factors collectively lead to a slowdown in industrial production and export growth.
The situation is developing in an unfavorable direction, but when it rains, it pours, and Vietnam's economy faces another major negative factor.
On August 5, 2024, the Techo Santepheap Canal project, a cooperation between China and Cambodia, officially commenced in Cambodia. This milestone project not only marks a new chapter in Cambodia's national development but may also have profound effects on neighboring countries, especially Vietnam's economy. This article will delve into the impact of the canal project on Vietnam's economy, particularly its potential transformation of Vietnam's online gambling industry, and analyze it in conjunction with the economic strategies of Latin American countries.
The Techo Santepheap Canal project has started, and Vietnam may not be happy about it. Why is that?
Let's take a look at the map!
The Techo Santepheap Canal, as Cambodia's largest infrastructure project to date, spans 180 kilometers and is expected to be completed by 2028. The canal will directly connect Phnom Penh to the ocean, freeing Cambodia from its reliance on Vietnamese ports and enhancing its strategic autonomy and trade transportation capabilities. It is predicted that the canal will save Cambodia a significant amount of shipping costs annually, significantly boosting its global trade competitiveness and bringing substantial economic benefits.
However, Vietnam's economy may suffer to some extent due to the existence of this canal, for three reasons:
Reduced shipping volume: Once the canal is completed, Cambodia's trade transportation will no longer rely entirely on Vietnamese ports. It is expected that the canal will significantly reduce the volume of Cambodian shipments via Vietnam, which will have a significant impact on Vietnam's shipping industry, thereby affecting its related income.
Reduced economic dependency on Cambodia: Currently, about 33% of Cambodia's cargo throughput needs to pass through Vietnamese ports. However, with the completion of the canal, Cambodia will be able to navigate freely on its own inland waterways, reducing its economic dependency on Vietnam. This will weaken Vietnam's position and influence in the regional economy.
Changed investment environment: The implementation of the canal project may attract more international investment and project cooperation, thereby changing the regional investment environment. This may have a certain impact on Vietnam's investment attractiveness, especially in areas such as infrastructure construction, trade, and logistics.
Although the canal project is still years away from completion, its impact is currently difficult to predict, but the Vietnamese authorities must prepare in advance. Involving national-level economic plans or deployments, it is quite normal for the time cycle to span several years or even decades.
Finding new economic growth points for the future has become an important task for the Vietnamese government, which may be an opportunity that forces the authorities to consider relaxing gambling policies.
Opening up the Gambling Industry for Economic Reasons? This is not new!
Examples of opening up the gambling industry to promote economic growth are not uncommon in the Latin American region. Cases from relevant countries provide valuable references for Vietnam.
Brazil: In recent years, Brazil's economic growth has slowed, and fiscal pressure has increased. To seek new economic growth points, the Brazilian government has begun to consider relaxing restrictions on the online gambling industry. By introducing a regulatory framework, Brazil has not only successfully attracted a large amount of investment from international gambling companies but also created numerous job opportunities and tax revenue. This process has effectively alleviated Brazil's fiscal difficulties and injected new vitality into economic growth.
Colombia: Colombia, also facing economic challenges, has adopted a more open attitude towards the online gambling industry. The government has clarified the legal status of online gambling through legislation and established a strict regulatory mechanism. This move not only combats illegal gambling activities but also promotes the healthy development of legitimate gambling businesses. Colombia's online gambling industry has rapidly risen in a short period of time, becoming an important pillar of the country's economy.
Peru: As an important country in the Latin American region, Peru has already opened up the online gambling industry to cope with economic pressure. In July 2022, the then President of Peru, Pedro Castillo, signed a new gambling law, officially legalizing sports betting and online gambling, and published it in the official Peruvian newspaper El Peruano. This move aims to guide the gambling industry towards healthy development through legalization and standardized management, increasing tax revenue and job opportunities.
It can be said that due to economic pressure, Vietnam is not alone in considering opening up the gambling and online gambling industries. It is not the first, and certainly not the last. With more and more cases before us, it is believed that the pressure on the Vietnamese authorities at the public opinion level will not be too great.
So, once the policy is relaxed, can Vietnam's online gambling market develop rapidly?
This should not be too suspenseful. Factors such as population, technology, and globalization are expected to drive rapid growth in Vietnam's online gambling industry.
Population Structure
Vietnam has a large population base, with a relatively young age structure. According to the General Statistics Office of Vietnam (GSO) and other related reports, Vietnam's young population (especially those under 35) accounts for a high proportion; data shows that the proportion of the population under 35 in Vietnam ranges from 52% to 56%.
Young people tend to be more receptive to new things and are more likely to become the main consumer group of the online gambling industry. Additionally, as Vietnam's middle class continues to expand, high-income groups also have higher spending power, providing a potential high-value user base for the online gambling industry. Therefore, from a population structure perspective, Vietnam's online gambling industry has broad market potential.
Technology-Driven
With the continuous development of technology, especially breakthroughs in fields such as artificial intelligence, big data, and blockchain, unprecedented development opportunities have been brought to the online gambling industry. These technologies can be applied to improve game fairness, optimize user experience, and enhance risk control, thereby enhancing the industry's competitiveness and attractiveness. If Vietnam opens up the online gambling industry, it should fully utilize technological advantages to promote industry innovation and development.
Global Perspective
In the context of globalization, economic ties between countries are increasingly close. If Vietnam opens up the online gambling industry, it can not only attract domestic consumers but also expand the international market and attract foreign gamblers. By cooperating with internationally renowned gambling companies, introducing advanced management concepts and technical methods, and enhancing the industry's international level. At the same time, actively participating in international competition, learning from the successful experiences of other countries, and promoting Vietnam's online gambling industry to the global stage.
In addition, Vietnam can take its neighboring country, the Philippines, as a reference, as the Philippines' online gambling industry has already formed a relatively mature industry chain and market size.
The Philippine government adopts a relatively open attitude towards the online gambling industry, attracting a large number of international gambling companies to settle in, not only driving local economic development but also creating numerous job opportunities.
Economically, Vietnam has always been following China's lead. In the gambling industry, Vietnam can completely follow the Philippines' lead. They are neighboring countries, and copying homework is very convenient.
Therefore, if Vietnam opens up the online gambling industry, it can learn from the successful experience of the Philippines, quickly enhance the industry level by introducing foreign capital and technology, and narrow the gap with developed countries.
Conclusion:
Facing the pressure of economic slowdown and the potential impact of the Techo Santepheap Canal project, the Vietnamese government may reconsider its gambling industry policy. It can be said that challenges and opportunities coexist.
With the inspiration of successful experiences in Latin American countries and the Philippines, the Vietnamese government may weigh the pros and cons, gradually relax restrictions on the online gambling industry or even legalize it, while strengthening regulatory and tax management and introducing internationally renowned gambling companies. This not only helps alleviate economic pressure. Through these measures, Vietnam can maintain social stability while using the gambling and online gambling industries to inject new momentum into economic growth.
In the future, we should closely monitor the adjustments and implementation of the Vietnamese government's policies on the online gambling industry, as well as the actual development of the industry. If there is a loosening of official rhetoric, the
