Insight VIETNAM
requirement for the Grand Ho Tram in Ba Ria - Vung Tau, an integrated resort about 2 hours from Ho Chi Minh City. The Grand Ho Tram gaming license was issued in April 2013 and the casino was opened in July the same year after an initial investment of about $500 million. If they have to stick to the terms of the new 2014 decree, investors in new integrated resorts will surely consider the requirement an unfair practice.
There are also major question marks over taxes, which may be as high as 60 percent a rate which will kill all investors’ desire to come in. The current gaming and special consumption tax rates are around twenty five to thirty percent, in addition to corporate income taxes. The Prime Minister and his advisors will have to strike a balance between the need to maintain various taxes to help the state budget, investors’ interests and the need to control local admission and gambling addiction.
Some other restrictive terms in the draft decree involve the limited number of tables and gaming machines. For any investment of $20 million, the investors will be allowed to operate 1 gaming
Taxes may be as high as 60 per cent, a rate which will kill all investors’ desire to come in. The current gaming and special consumption tax rates are around 25-30 per cent, in addition to corporate income taxes. Some other restrictive terms in the draft decree involve the limited number of tables and gaming machines. For any investment of $20 million, the investors will be allowed to operate 1 gaming table and 10 electronic gaming machines. With a registered capital of US$4 billion, the operators will have a chance to operate 2000 machines and 200 gaming tables.
table and 10 electronic gaming machines. With a registered capital of US$4 billion, the operators will have a chance to operate 2000 machines and 200 gaming tables.
Marina Bay Sands in Singapore, for about the
same investment, features about 2,500 gaming machines and 600 tables.
The draft also has not touched on issues of gross gaming tax and the length, conditions and exclusivity of the gaming license. There is no discussion about the need to establish a national gaming control board or commission to help steer the government in the right direction and away from potential problems with investors.
However, I’m optimistic the government is committed to ensuring the gaming industry is on a solid footing and will work to implement positive changes before a final version is sealed.
This article was wrtten for Asian Gaming Brief by Prof. Augustine Ha Ton Vinh, President and CEO of Stellar Management Corporation, a Vietnamese management consulting and education company. Prof. Vinh has over 30 years of professional, technical, and management experience in the Asian Pacific, European, and West African regions with a concentration in economic development strategies; management, regulatory and institutional reforms.
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