Since the decree was issued in 2017 providing a legal framework for its operations, Vietnam's casino industry has been steadily growing. However, despite the significant contributions to the national economy, experts believe that loopholes in the legal framework could hinder long-term growth and effective management.
The findings were published in a study by Nguyen Thanh Minh Chanh and Vuong Thi Thu Thuy from the Law School of Ho Chi Minh City University of Industry.
Issues such as unclear investment registration requirements, ambiguous conditions for obtaining casino licenses, and inconsistent regulations related to casino operations complicate both commercial investment and regulatory management.
To address these challenges, comprehensive legislation for casino activities is needed, including clear development strategies, planning, and solutions for legal document conflicts. These measures should be implemented coherently to ensure that the casino industry effectively supports the country's economic growth.
According to the study sent to AGB, since the implementation of the decree, Vietnam's casino industry has seen an increase in revenue and job opportunities.
From 2017 to 2023, the Ministry of Finance reported that the industry contributed nearly 9 trillion Vietnamese dong (approximately 370 million USD) to the national budget and employed over 10,000 people. Notably, the Phu Quoc Island casino alone generated 2.18 trillion Vietnamese dong (about 88.20 million USD) in revenue in 2023, contributing 1.23 trillion Vietnamese dong (about 49.70 million USD) to the national budget.
In Vietnam, organizing, operating, assisting, or participating in organized gambling or casino games remains illegal, with very special exceptions, namely the licensed casinos and electronic gaming clubs legally operating nationwide.
Vietnam lacks specific casino or gambling laws; instead, its casino operations are governed by a complex legal and administrative decree framework. The main regulation is Government Decree 03/2017/ND-CP, which took effect on March 15, 2017, outlining various related laws, decrees, notices, and guidelines that casino gambling must comply with.
Additionally, key regulations involve foreign investment in the industry, casino operations, taxation, administrative penalties, and foreign exchange management.
The authors of the study warn that regulatory challenges remain, as the requirement for Vietnamese citizens to prove a monthly income of 10 million Vietnamese dong (400 USD) to enter casinos is criticized for its complexity and lack of feasibility.
On average, Vietnamese people take about 800 million Vietnamese dong (approximately 31,511 USD) annually to gamble at casinos abroad, which is not a small amount, not to mention the money spent gambling in Vietnamese casinos.
So far, only the Van Don and Corona Casino projects have been approved for local entertainment. The Van Don casino is still under construction, while the Corona Casino on Phu Quoc Island is open to Vietnamese citizens who are willing to pay an entry fee and meet specific entry requirements, including providing proof of identity and income.
During the COVID-19 pandemic, the Corona Casino on Phu Quoc Island relaxed these regulations as part of a three-year pilot project, allowing local residents to gamble at the venue. This pilot period has been extended until December 31, 2024.
Meanwhile, electronic gaming clubs (offering electronic games only to foreign passport holders) are permitted to operate in four-star and five-star hotels primarily located in tourist destinations.
For the authors, the 10 million Vietnamese dong (400 USD) requirement poses challenges, as verifying entry income is impractical and could lead to fraudulent practices.
"Observers note that a simpler system, such as an identity card issued by authorities, could streamline the process while maintaining oversight. The study points out that many Vietnamese travelers seeking leisure do not intend to participate in gambling, making the income verification process cumbersome."
"In contrast, neighboring regions like Cambodia and Singapore have more relaxed regulations, prompting many to go abroad in search of simpler gambling options. Despite the substantial revenue generated by the Phu Quoc Island casino and attracting over 240,000 visitors, the post-pandemic recovery of the tourism industry remains challenging. To promote industry growth, it is suggested to relax regulations."
Legal and Regulatory Gaps
The study also highlights inconsistencies in investment regulations, particularly for casino projects in underdeveloped areas.
Current laws require a minimum investment of 2 billion USD, with 50% paid before operations begin. The authors believe this requirement does not consider the infrastructure development costs in remote areas, potentially hindering investors.
The study notes, "Many large foreign investors indeed want to come to Vietnam to build tourist resort shopping casino complexes. However, legal and institutional issues remain a significant barrier that makes investors hesitate."
"Therefore, it is very necessary to perfect the legal regulations governing casino operations to adapt to reality and vigorously develop casino operations in Vietnam for some time to come."
The study believes that when businesses want to engage in casino operations in economically difficult, infrastructure-poor, or lacking infrastructure areas, funds for improving connecting infrastructure can be included in the total investment amount of the casino project, but the cap should not exceed 25% of the total investment amount."
Additionally, casino owners are allowed to transfer their capital contributions within the casino building for at least five years from the date the casino operating license is issued."
Moreover, due to concerns about money laundering, Vietnam's casinos face stricter scrutiny."
While the 2022 Anti-Money Laundering Law strengthened oversight, experts recommend providing more detailed guidance, robust enforcement, and international cooperation to combat complex money laundering schemes."
The Financial Action Task Force (FATF) affiliate Asia/Pacific Group on Money Laundering (APG) released its latest assessment of Vietnam in 2022, concluding that Vietnam's anti-money laundering/counter-terrorism financing supervision is very limited and not risk-based."
Casinos are also under strict scrutiny for their social impacts, including gambling addiction and illegal activities. Researchers recommend strengthening measures to prevent gambling-related social issues, such as empowering local authorities, community organizations, and law enforcement agencies to conduct effective monitoring and intervention."
"Promoting the positive development of Vietnam's economy. However, Vietnam's integration into the international community requires specific amendments to the law to promote the development of this 'smoke-free' industry. It is necessary to improve the legal regulations governing casino operations to adapt to reality and promote this economic activity to make significant progress in the future," the study authors suggest."
The report emphasizes the need to develop a cohesive national strategy for casino development, coordinate legal documents to minimize contradictions, and ensure that the industry makes a positive contribution to Vietnam's socio-economic development."
In conclusion, Vietnam's cautious approach to casino legalization has produced mixed results. While the industry has boosted economic growth, especially in tourism, the regulatory framework requires significant improvements."
Experts believe that by addressing these gaps, Vietnam can fully leverage its casino industry's potential and position it as a driver of economic and social progress in the region."
