Vietnam’s potential as a regional hub for VIP casino gambling has been highlighted by several industry experts. Despite Macau, the Asia-Pacific region’s previous high-roller hotspot, remaining in a state of transition following recent regulatory changes, Vietnam’s low operating costs and other favourable conditions are being seen as key to its future success in the industry. While Macau’s traditional facilitators of VIP play, junkets, are facing increased compliance hurdles and scrutiny, Vietnam has no specific licensing regime for operators of gambling-related tours.
Instead, Vietnam’s facilitators of high-value overseas gaming patrons, known locally as “international tour operators” (ITOs), have adapted Macau’s “fixed room model” that used to be common amongst that city’s junket operators. They are a hybridised combination of Southeast Asian casual model and the Macau fixed room, according to industry consultant Ben Lee, managing partner of IGamiX Management & Consulting Ltd. Southeast Asian junkets typically transfer money through money changers in their home country and settle only when their players return home.
Mr Lee further explained the traits of a Southeast Asian junket: “They travel all around Asia, moving from casino to casino as their players demand. The junkets do not have any fixed employees stationed in the VIP rooms or casinos… and rarely have their own transportation, relying primarily on the casino for all the basic support functions, although they may sometimes station managers in-country if their [business] volume justifies it.”
Vietnam’s “low operating costs, ready acceptance of foreign workers and management, and their low effective tax rate all make it an attractive destination,” said Mr Lee. He added that the effective tax rate in Vietnam on VIP gambling relative to every US$100 of gross gaming revenue (GGR) was circa 15 percent, compared to 40 percent in Macau.
Vietnam’s potential advantages in appealing to regional VIP play are numerous, but its “bureaucracy in relation to approvals, certifications and forex [foreign exchange] controls can be quite problematic,” according to IGamiX’s Mr Lee. Despite this, with Macau’s junket business effectively castrated, it’s understandable that the agents would all look elsewhere, and Vietnam, with its rise of integrated resorts, could very well capitalise on that, he added.
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