Who is allowed to operate a gambling business?

According to the draft Decree on the business of electronic games with prizes for foreigners, developed by the Ministry of Finance, Vietnamese citizens will not be allowed to participate.MaleIt includes gambling and does not encompass casino business activities. So, who will be allowed to operate this type of service? Will this regulation address the existing shortcomings?

Not a lot, but… it's all insignificant.

According to information from the Ministry of Finance, since 1992 when the Government piloted the business of gambling games for foreigners in Hai Phong, there are now 50 licensed establishments nationwide, divided into three groups. Group 1 consists of businesses operating electronic gambling games on machines, including 43 establishments located in 3-star hotels and above, and some tourist destinations, mainly concentrated in Hanoi and Ho Chi Minh City.

Group 2 consists of businesses operating gambling games, including 6 businesses operating slot machines and a limited number of gaming tables. These include Ho Tram Project Co., Ltd. (Ba Ria – Vung Tau) with 180 tables and 2,000 machines (not yet operational), Genting VinaCapital Joint Venture Company in Nam Hoi An with 180 tables and 2,000 machines (not yet operational), Silver Shores Hoang Dat International Tourism and Entertainment Joint Venture Company in Da Nang with 8 tables and 100 machines, Hai Ninh Loi Lai Joint Venture Company in Quang Ninh with 20 tables and 100 machines; Lao Cai International Hotel Joint Venture Company with 8 tables and 300 machines…

Group 3, which includes casino businesses, has only one company: Hai Phong International Tourism Joint Venture Company. Essentially, this is a business operating games of chance, as the company currently has 24 tables and 50 machines.

All business establishments offer games such as Baccarat, Blackjack, Roulette, PaiGow, Sic Bo, and slot machines. The only difference between businesses in group 1 and groups 2 and 3 is that these games are electronic, but the rules are completely the same. According to international classification, these are games found in electronic casinos.

The Ministry of Finance noted that the organization of this service business lacked a comprehensive plan, with a large number of licenses issued but small and scattered investments, leading to low business efficiency and failure to promote tourism development. The licensing conditions were not strict enough, resulting in some licensed businesses being located in areas with few foreign tourists, thus attracting Vietnamese customers.MaleEntering the premises for entertainment. Six businesses have been prosecuted for this violation.

What conditions must be met?

According to the draft decree, the business of electronic games with prizes is a conditional business sector. This is consistent with international practice and current Vietnamese law.MaleAccording to the draft decree, one of the most important conditions for obtaining a license is that the business must have a tourist accommodation facility that has been rated 5 stars or higher and that regularly accommodates a large number of foreign guests. The business must also meet other requirements regarding the business location, management personnel, security and order conditions, business plan, financial capacity, and procedures for applying for a business license.

Commenting on this condition, Mr. Nguyen Quang Vinh – an independent economic expert – said that these conditions are not difficult to meet. Thus, this regulation seems quite "open," as almost all 5-star hotels in Vietnam, if they wish, have the opportunity to open gambling facilities for foreigners. The conditions in this draft differ from the current regulations in Decision No. 32/2003/QD-TTg of the Prime Minister only in that the accommodation facility must be rated 5 stars, while the old regulation stipulated 4 stars for Hanoi and Ho Chi Minh City and 3 stars for localities with many tourists.

According to the draft Decree, each tourist accommodation establishment will only be considered for and granted one business registration certificate, and this certificate will only be issued to the enterprise that owns the establishment. This business registration certificate will be valid for a maximum of 10 years, and if renewed, it will also not exceed 10 years. The Ministry of Finance will be the agency responsible for issuing the business registration certificate.

The draft Decree only stipulates generally that businesses must have "sufficient financial capacity," without providing a specific figure. Currently, Government Office Notice No. 96/TB-VPCP dated May 4, 2007, on the Plan for Orienting the Development and Business of Casinos in Vietnam, only investment projects of USD 4 billion or more, with integrated construction and forming a complex with tourism and entertainment facilities, will be considered for permission to build casinos within the project framework.

Explaining the consideration of allowing certain groups of Vietnamese citizens with sufficient income to participate in gambling games to curb foreign currency outflow and the negative consequences of illegal gambling, the Ministry of Finance stated that thorough research and evaluation are needed, along with measures to manage players. Therefore, this draft decree still only includes players with foreign passports.

According to Phapluat-M