Computerized lottery is a state activity.

(Baonghean) - The Ministry of Finance has sent Official Dispatch No. 16868/BTC-TCNH to the Central Propaganda Department and the Ministry of Information and Communications on the issue of coordinating propaganda on computerized lottery business activities.

Live lottery results on the Internet. Photo: Tran Chau

To effectively implement computerized lottery business activities in accordance with the Government's orientation, the Ministry of Finance requests the Central Propaganda Department and the Ministry of Information and Communications to coordinate in directing the dissemination of a number of contents related to computerized lottery business activities.

Firstly, regarding the policy of establishing the Vietnam Computerized Lottery Company, the Ministry of Finance said that, implementing the policy of modernizing the lottery industry approved by the Prime Minister in Decision No. 1109/QD-TTg dated July 11, 2011, the Ministry of Finance issued Decision No. 2933/QD-BTC dated December 5, 2011 on the establishment of the Vietnam Computerized Lottery Company Limited (Vietlott) with the function of organizing computerized lottery business nationwide.

Along with the goal of modernization, the computerized lottery business creates a new business method, supplementing the traditional lottery business to meet the increasing entertainment needs of a segment of people with legitimate income; create more jobs for workers, increase state budget revenue to invest in social security, health, education. Enhance the transparency and effectiveness of state management, contributing to the health of current entertainment and prize-winning games, reducing illegal lottery and gambling activities.

After a period of careful preparation, from selecting partners, negotiating contracts, installing and testing the system, building an agent system, on July 18, 2016, Vietlott officially launched the first computerized lottery product in Ho Chi Minh City, then 8 other provinces and cities. After nearly 5 months of operation, initial results have been achieved, attracting the attention of the people and most importantly, the system has been operated stably, safely, without any problems.

The introduction of the computerized lottery business system into operation marks an important step in the gradual modernization of the lottery business sector, in line with the policies of the Party, State and Government.

According to the provisions of the State Budget Law, the revenue from lottery business activities is balanced into the budget and 100% is left for localities to invest in the fields of education, training, vocational training, health care, and new rural construction. Vietlott's computerized lottery business is also a type of lottery business, so the revenue from computerized lottery business activities is also implemented according to the above mechanism. That is, the entire state budget revenue from Vietlott's business activities is allocated to the budgets of provinces and centrally-run cities according to the actual revenue generated in the area.

Regarding the selection of foreign partners to implement computerized lottery business activities, the Ministry of Finance said that according to the provisions of Decree No. 30/2007/ND-CP and Decree No. 78/2012/ND-CP of the Government on lottery business, lottery business activities are under the business rights of the State, lottery businesses are 100% State-owned LLCs, only businesses that are granted a certificate of eligibility for lottery business by a competent state agency are allowed to organize lottery business activities.

Computerized lottery business is a new type. Vietnam does not have enough necessary factors for implementation such as technology (including hardware and software), management experience. Therefore, it is necessary to cooperate with foreign partners to take advantage of technology, management experience, business organization, investment capital and risk sharing. In Decision No. 1109/QD-TTg dated July 11, 2011, the Prime Minister allowed Vietlott to choose business cooperation partners in the form of business cooperation contracts to organize business effectively.

Pursuant to the Prime Minister's decision, the Ministry of Finance has coordinated with the Ministry of Justice, the Ministry of Planning and Investment and relevant ministries and branches to develop a plan to select cooperation partners to implement the computerized lottery business project in Vietnam (the project) and submit it to the Prime Minister for approval.

Based on the approved criteria for selecting partners and the participation records of potential partners, the Ministry of Finance has established two working groups with the participation of the Ministry of Finance, the Ministry of Justice, the Ministry of Planning and Investment and Vietlott, including: a team to evaluate the partner's records; a team to evaluate the results of evaluating the partner's records. Based on the results of evaluating and selecting partners and the results of evaluating and selecting partners, the Ministry of Finance has reported to the Central Internal Affairs Committee and the Prime Minister to approve the results of selecting partners.

After the implementation process, the selected partner was Berjaya Group of Malaysia (Berjaya), the partner with the highest score was assessed as having sufficient financial capacity, experience in lottery business and computerized lottery technology. On January 20, 2016, based on the appraisal opinions of relevant ministries and branches, the Hanoi Department of Planning and Investment issued an investment registration certificate for the "Investment project for procurement and operation of technical systems, equipment, technology, software and computerized lottery business in Vietnam" between Vietlott and Berjaya.

The cooperation between Vietlott and Berjaya is carried out under the Business Cooperation Contract (BCC) model of the Investment Law, without changing the ownership form of Vietlott (the State owns 100% of the capital).

After more than 400 days of negotiation, the Business Cooperation Contract (BCC) between Vietlott and partner Berjaya was signed. According to the provisions of the Business Cooperation Contract, Berjaya is responsible for investing in the entire technology system, technical equipment and software for computerized lottery business. The partner will receive a certain fee rate on revenue, ensuring enough to cover the investment costs, and at the same time receive a profit rate according to regulations.

The profit level payable to the partner is also calculated based on the interest rate of Government bonds with equivalent terms plus some business risk factors and macroeconomic fluctuations. The partner is obliged to transfer technology and assets to the Vietnamese side after the end of the BCC contract. Vietlott's responsibility is to cooperate with the partner; supervise the business process and the implementation of the BCC contract, ensure compliance with legal regulations; require the partner to transfer technology according to the roadmap, ensure that when the BCC contract ends, it can own and operate the system.

Regarding the accounting of Vietlott's revenue, expenses and income, it is implemented in accordance with the provisions of the law on enterprises, taxes and provisions of business cooperation contracts. Accordingly, in addition to using 55% of revenue to pay bonuses as prescribed, the company must pay value added tax at a rate of 10%, special consumption tax at a rate of 15%; after deducting business operating expenses (including expenses paid to partners), the company pays corporate income tax (20%), sets up funds according to the provisions of the Law on Enterprises, and the remaining profit continues to be paid to the local budget as prescribed.

Red River