Casino and bet management: Permit with a strict control

Management agencies will face many challenges. Photo: Internet

This is an optimistic sign to facilitate a promising business model in Vietnam, but also a big challenge for managers.

Limit the illegal activities

In the first month of 2017, the Government issued Decree No. 03/2017/ND-CP on casino businesses and Decree No. 06/2017/ND-CP on the business of betting on horse racing and greyhound racing, and international soccer. These are two sensitive fields which were considered and learned from international experience by Vietnam for building legal corridors to manage theses activities more than 10 years ago, but now are eligible for issuance.

Representative of the drafting agency - Mr. Nguyen Hoang Duong, Deputy Director of the Department of Banking and Financial Institutions, Ministry of Finance said: Among the above business models, in the previous time, betting business activities have been implemented under a pilot. Some projects of horse racing, greyhound racing, and international soccer have been licensed under the Investment Law.

However, in fact there are many illegal betting activities which have been stealthily organized in different manners and more sophisticated through online betting and illegal betting with overseas bankers who provide illegal services. This situation has caused difficulties for the State management agencies in management and control and negative impacts for social order and safety, and to not control the situation of illegal transfer of foreign currencies to abroad.

From this fact, in order to strengthen the efficiency of State management, the Ministry of Finance proposed the Government to issue Decree No. 06 on the business of betting on horse racing, greyhound racing and international soccer to manage and supervise and handle violations in the betting business. Concurrently, specifically stipulating the responsibilities of the relevant ministries, sectors and localities and the State management agencies in management and supervision of the betting business.

The Decree also meets the relaxed demands of a number of people who have legal income, and attract investors in tourism through the development of the projects of building the racetrack for horse racing and greyhound racing, and contributes to the fight against illegal betting activities, negatively affecting social order and safety and the illegal transfer of foreign currencies to abroad to participate in illegal betting activities.

Similarly, in order to enhance the effectiveness and efficiency of the State management for the casino business, the Ministry of Finance also proposed the Government to promulgate Decree No. 03 to manage, supervise and handle violations in the casino business, concurrently, regulating the responsibilities of the relevant ministries, sectors and localities and the State management agencies in management and supervision of the casino business.

The Decree on the casino business was issued to attract investors in tourism development through investment in complex resorts which have casino businesses, and create favorable conditions for businesses to organize their business activities in accordance with the law and have sanctions to ensure the rights of players.

However, due to the fact that these business activities are considered not to be encouraged for development, the Government provided close requirements for investors and the players, such as: to be permitted to grant a certificate of the casino business, an enterprise must invest and build the projects of the service and tourism and entertainment complex with the invested capital of at least $US 2 billion.

The duration of the pilot shall be 3 years from the day on which the pilot permission for Vietnamese citizens to play in a casino is first applied. Vietnamese citizens are allowed to play in a casino if he/she is at least 21 years old and is fully capable of civil acts and financially capable, and must buy a casino entrance ticket and is not a person whose parents, adoptive parents, spouse, or natural child requests the casino-operating enterprise to prevent him/her from playing games at the casino.

For the betting of greyhound racing and horse racing, an enterprise must have invested capital of at least 1,000 billion vnd for horse racing and 300 billion vnd for greyhound racing to build the race track with technology equipment and systems and the business software which meet regulated standards. Particularly for international soccer betting, there is only one enterprise selected for the pilot business, through bidding under the Bidding Law. The pilot enterprise must also have the charter capital of at least 1,000 billion vnd and invest in technology equipment and systems and the business software for betting, which must also meet the regulated standards.

Control from passion to fraud

According to Mr. Nguyen Hoang Duong, there are specific criteria stipulated by the Government in the Decree, which were carefully calculated by the drafting agency before being promulgated. For example, the regulation on the conditions for betting enterprises, with the minimum capital is required to ensure that enterprises are eligible to invest for their betting business activities such as building the race track, and buying race horses, greyhounds, and investment in the technology equipment and systems and the business software, and financial capability to ensure award payment for the players at least 65% of the ticket revenues.

For the limit of bets, the Ministry of Finance carefully researched countries’ experiences. The representative of the drafting agency said: Many countries regulated the limit of the minimum and maximum bet level to restrict the low-income players to bet and control the excessive passion level of players, and prevent illegal organization outside.

In England, the Ladbrokes Company regulates the minimum bet level is £1 and the maximum bet level is £25 per bet but does not regulate the betting times. William Hill stipulates the minimum bet level is £1 and the maximum bet level does not exceed more than £2 million per day. With Bwin the minimum bet level is £0.5 and the maximum bet level is £10,000 per bet.

In Korea, the minimum bet level is 100 won per bet. Hence, in Vietnam, the minimum bet level is 10,000 vnd and the maximum bet level is 1 million vnd per bet, which are in line with the practical situation of the current bet level of the pilot betting enterprises on horse racing, greyhound racing, and the current value of lottery tickets and computerized lottery. The maximum bet level aims to control the excessive passion level of players.

Pilot permission for Vietnamese citizens to play casino in the country VCN- Vietnamese citizens are allowed to play in a casino within 3 years term to meet the ...

Another challenge from the management aspect is also a "barrier" with negative problems which can happen. "We clearly defined the enterprises to take responsibility to build and issue internal regulations on prevention and combat of money laundering, and also specifically stipulate violations on prevention and combat of money laundering, and penalties corresponding with each act of violation under the provisions of the Law on Handling of administrative violations and the Law on the Prevention and combat of money laundering” Mr. Duong said.

In addition, in the Decree, the Government also clearly stipulated the responsibilities and powers of the State management agencies from the central to local levels in performing the State management for the business activities on betting as well as the inspection and audit of the Law violations, and specific penalty level and competence to penalty administrative violations in the casino business, as well as betting.