Revenue rises trillions, casinos amid sensitive line

01-10-2020 |  

Casino is still considered a "sensitive" business in Vietnam. Therefore, the regulations for this activity, although more "relaxed" than decades ago, are still very strict.

Revenue rises sharply, casino still loses

The Ministry of Finance has just reported on the amendments and a number of articles of the Government's Decree No. 03/2017/ND-CP on casino business. Before Decree 03 2019, there were 8 licensed casinos in which 7 projects were operating. After Decree 03, there have been 3 general tourism and entertainment service area projects with casinos decided by the Prime Minister and granted investment certificates by the Provincial People's Committee (Laguna Lăng Cô – Thua Thien Hue casino, Phu Quoc casino and Cam Ranh casino).

The Ministry of Finance report shows that revenue and contributions to the budget from the casino business increased sharply.

In 2017, revenue from casino business activities of 8 enterprises reached more than VND 1,190 billion, paying a budget of VND 645 billion. In 2018, revenue from casinos reached VND 1,560 billion, up 31% over the previous year; state budget payment reached nearly VND 900 billion, an increase of 39% over the previous year. In 2019, revenue from casinos reached VND 2,500 billion, up 60% over the previous year; state budget payment reached VND 1,340 billion, an increase of 49% over the previous year.

Regulations related to casino business, although more "relaxed", are still very "strict".

Although revenue and budget payment have increased sharply in the last few years, many casino service providers still lose heavily. The 2019 integrated financial statements of Royal International Joint Stock Company, which operates The Royal Casino Ha Long (Royal Casino), recorded losses of over VND 72 billion. This company achieved total revenue of more than VND 235 billion, down 18.2% compared to 2018. Particularly, revenue from casino business only reached VND 97 billion, a sharp decrease. Regulations related to casino business, although more "relaxed", are still very "strict".

Ho Tram Casino (Ba Ria – Vung Tau) despite being located in Ho Tram resort and entertainment complex with an investment of more than 4 billion USD, opened in mid-2013, with 90 tables but has not reached break-even point since its opening. Audit report for 2 years 2016-2017, Ho Tram accumulated losses over 300 million USD.

Even casinos that are piloting Vietnamese players can not avoid losses. Business results by the end of 2019 showed that Phu Quoc casino has a total number of visitors of more than 105 thousand, of which Vietnamese people are more than 47.4 thousand, accounting for 45%. The rest are foreigners.

The total accumulated revenue of Phu Quoc casino reached VND 1,433 billion. In which, revenue from casino business with tax reached VND 1,381 billion, the rest from other revenue sources. The cost of paying bonuses in 2019 is VND 324 billion. The tax paid in 2019 is VND 521 billion.

Casino business results in 2019 reached more than VND 284 billion. However, according to the audited financial report in 2019 of Phu Quoc Tourism Investment and Development Joint Stock Company, the business result lost VND 2,529 billion, including casino business and other business activities.

Attracting visitors and paying taxes: Don't ban grim

Share with PV, TS economist. Can Van Luc said that: Prized entertainment activities in Vietnam as well as internationally must be associated with tourism. Therefore, it is necessary to have a policy mechanism to develop rewarding recreation associated with tourism and the night economy. Vietnam can research and develop strategies and policies to develop rewarded play associated with tourism and night economy in a methodic and professional way associated with strict management on the basis of international experience such as China Singapore, Malaysia. Due to the fact that Vietnam's tourism industry still does not have diversified products, services, tourism and entertainment.

Referring to the casino story in Vietnam, Dr. Can Van Luc noted whether encouraging this service should not be considered between benefits and harm. 'We don't encourage it too much but we shouldn't be banned too harshly because there's obviously a need. In terms of market economic principles, there is supply and demand", Mr. Force shared.

Regarding the loss of casino projects, Mr. Can Van Luc assessed that it is possible that business conditions in this field are not completely suitable or the investor is poor. The player himself is hesitant, while the investor does not dare to do it strongly because the regulations are unclear.

In order for this service to grow healthy and collect taxes, very specific business conditions are required. In the context of the Industrial Revolution 4.0, casino activities also took place across borders. Therefore, the approach and management methods of the authorities must also be different from the previous one.

At a seminar in June 2020 on prize-winning fun activities, Dr. Nguyen Anh Tuan, Director of the Institute for Tourism Development Research, said: "Casino issues have been "discouraged" in Vietnam until recent years. There are still some limitations and common problems, including planning problems. Therefore, it is necessary to have proper evaluation, appropriate awareness of casinos in particular, rewarded entertainment activities in general.

At the end of May, in addition to recommending solutions to revive the economy in general, the Association of Foreign Investment Enterprises (VAFIE) also proposed solutions to develop casino services to quickly recover and develop tourism in the country.

VAFIE said: Since 1995, the Government has piloted casino operations with the licensing of Do Son casino in the form of a joint venture, which has since attracted dozens more projects. However, the socio-economic efficiency of the prize-winning field is not commensurate with its advantages and potential. The main reason, according to VAFIE, there is no agreement on views and perceptions among ministries, branches and local governments, so there are still difficulties in forming institutions, mechanisms and organizations.

Mr. Nguyen Ngoc My, Vice Chairman of the Association of Foreign Investment Enterprises, commented: This is the smoke-free industry of the world, of the 21st century. Why didn't we? If we consider it a sensitive field, we just need to make regulations thicker than those of countries.

"In the old days, it was forbidden to go abroad to play those services. But now, Vietnamese people travel to Thailand, Singapore … visa-free. They can completely fly there to play, instead of in Vietnam, they have to even indent. The more prohibited it is, the higher the expected revenue from tax contributions,"" said Mr. Nguyen Ngoc My.

According to VietNamNet