Grand Ho Tram gains massive boost from locals gaming permission, bringing the party from Saigon

01-10-2020 |  

Vietnam has radically reshaped its casino gaming landscape, offering a huge opportunity to The Grand Ho Tram by allowing local gaming. While the decision was not entirely unexpected, according to an expert, the repercussions will be profound, and usher in a new wave of play to the geographically significant region.

The Grand Ho Tram has seen multiple phases of development, but its current status – bolstered by the controlling interest of Warburg Pincus and under the leadership of CEO Walt Power – has led the property to new heights.

And nothing could cement that status more than the granting (on Wednesday) of the right to allow locals to gamble at the property.

Ben Lee

Gaming expert Ben Lee, Managing Partner of IGamiX Management and Consulting, notes that industry chatter early this year already indicated that Ho Tram would get a license, alongside Van Don (when a property eventually opens), and accompanying the now-permanent extension of the Corona Resort & Casino’s pilot local’s trial.

Previously, only Corona and Van Don had been greenlighted to allow locals to gamble. This new revelation for Ho Tram – which even CEO Walter Power told AGB he was circumspect about at the ASEAN Gaming Summit in March – is a massive boost for the property, given its close proximity to Ho Chi Minh, which houses a significant number of punters that had previously been restricted to foreigner-only slot parlors.

Expectations started to build after the first quarter of this year, with indications that the Politburo – the ultimate decider on the topic – could allow for the lapsed pilot program to continue in Phu Quoc (at Corona), but could also let worthy participants get a piece of the pie.

Ben Lee points out that, while the Grand Ho Tram had initially only fulfilled part of its expected build-out in order to get its table and machine game allocation – 90 tables and 400 machines (with a cap at 1,000), under the ownership of Warburg Pincus it has propped up its status by propelling its development and signaling its willingness to continue investing and developing the region.

Bring the party from Saigon

Lee points out that there’s a massive crowd in Ho Chi Minh that is ready and willing to place their bets. Whether it’s at the local slot parlors, which total about a dozen in the city itself and around 30 nation-wide, or – for the foreigners residing there (particularly Korean and Chinese) – venturing into the nearby casino.

This captive audience is unlikely to change, but the introduction of local gambling to Ho Tram should cause a massive shift across the whole property, with changes to the casino floor, an increased emphasis on entertainment, more comping and a push to maintain the VIP players that would previously take a jaunt to Singapore or Australia.

And Ho Tram could be the perfect place.

Lee notes that “Corona had very little GGR from the locals. Because of their remoteness and because of the constraints. So, the local market is an untested one”.

The expert highlights that previously a “handful of super VIPs” had frequented other jurisdictions – with players with up to $30 million hitting up Australia and those less flush heading to the Merlion city (Singapore).

Lee notes that pre-Covid estimates before this new revelation had the Ho Chi Minh gaming market at around $30-$50 million in GGR per month – just based upon the figures from the slot parlors. The potential upside for an IR located just a few hours away is phenomenal.

What’s next for Ho Tram?

Currently for locals to gamble at local casinos there is an entry levy of VND1 million ($38), with the possibility for a monthly rate of VND25 ($948) and a required proof of income of at least VND10 million ($380).

And The Grand Ho Tram’s total buildout cost was initially tallied at around $4.2 billion. Current expenditure is estimated around $1.5 billion, according to reports.

The smartest move, notes Ben Lee, is to inject the solid gains that can be expected from the opening up to locals into redevelopment, cementing the goodwill (given that it’s only a five-year permission) and building the IR into not only a gaming hub but an international destination.

“One of the key advantages is (the IR’s) proximity to the most prosperous region, with the largest population center in Vietnam: Ho Chi Minh…Ho Chi Minh has always been the prize. (Sheldon) Adelson, when he went to Vietnam, he said “Give me Ho Chi Minh, and maybe Hanoi. The government offered Van Don, and he said, “No, thank you”.”

And Ho Tram’s expansion also brings with it massive advantages.

Currently, the property operates around 90 tables and 400 gaming machines (with a cap at 1,000). According to previously disclosed information, if a third hotel tower opens – with another 1,200 rooms, casino table and machine capacity could literally double.

With the stage now set for its success, it remains to be seen how The Grand Ho Tram can capitalize off this massive opportunity, and what it will mean for Vietnam’s gaming industry as a whole.

AGB requested comments from Walt Power but he indicated that he would prefer to comment at a later date.

Source: AGBrief