Vietnam’s Integrated Resort Ambitions Face Significant Hurdles

Vietnam’s ambitious plans to develop a thriving integrated resort (IR) sector have hit several obstacles, with the Phu Quoc pilot project and the Van Don plans encountering notable challenges. Currently, only two casino establishments in Vietnam are permitted to admit local players. Amid the country's anti-corruption movement and the impact of various factors, including the pandemic, the realization of their potential remains uncertain.

The Phu Quoc pilot project, which includes the Corona Casino, was promoted as a flagship endeavor for Vietnam’s IR industry. However, the project’s progress has been less than stellar. According to a Vietnamese casino investor who preferred to remain anonymous, “The primary issue with the Phu Quoc project lies in the island’s underdeveloped transportation infrastructure.” He further explained, “The project is designed for high-end tourism but struggles to attract a larger, mass-market audience.”

A Vietnamese gaming expert highlighted that the entry requirements for local Vietnamese at the Corona Casino are a significant barrier. Locals are required to present a range of documents, including proof of monthly income of at least VND10 million ($394), property rental contracts, savings account statements, and personal income tax declarations. “The rigorous documentation process is deterring many potential local visitors. It’s creating an obstacle for locals who want to participate,” the expert explained.

According to a report from March this year, the Vietnamese Ministry of Finance revealed that the Phu Quoc pilot casino has accumulated over VND6.4 trillion ($259.1 million) in losses. Initially, a trial period allowing Vietnamese citizens to gamble in certain casinos on Phu Quoc Island and in Van Don District was permitted by the Politburo in 2016, spanning three years. However, only the casino project on Phu Quoc Island has been operational since January 2019. Despite ongoing trials and active collaboration among ministries and sectors, the report indicates that losses continue to accumulate for the project.

The Van Don project, which includes high-profile investments from companies like FLC and Sun Group, has encountered significant delays, likely more complicated than those faced by Phu Quoc. Permitted by the country’s Politburo to be implemented since 2013, the project still cannot be realized even 10 years later. A report by the People’s Committee of Quang Ninh province highlights that the project’s implementation has been hindered by multiple planning adjustments and the project’s key location with complex terrain.

The Ministry of Finance’s assessment indicates that the Van Don casino’s investment area faces challenging socio-economic conditions and lacks complete and synchronized technical infrastructure. Therefore, careful consideration is needed when attracting and securing investors to ensure the project’s successful implementation. A Vietnamese gaming expert attributes these setbacks to various factors, including complications with land use rights. “The Van Don Casino project is facing issues related to land use rights and land clearance,” the expert noted. “The project does not meet the conditions for auctioning land use rights according to the Land Law.”

The expert further explained that delays are worsened by the underwhelming performance of the Corona Casino among locals and the ongoing impact of the COVID-19 pandemic. “The difficulties faced by the Corona Casino and the overall effects of the pandemic are contributing to Sun Group’s hesitation to advance with the Van Don Casino project,” he added.

Previous reports reveal that Sun Group holds the license to operate casinos in Van Don. In 2020, the group had already invested VND7.5 trillion ($322 million) in Van Don International Airport, which opened in December 2018, and VND12 trillion into the 60km Ha Long-Van Don Expressway. Van Don International Airport, a crucial component of the project, has struggled to attract significant traffic. The Vietnamese gaming expert commented, “The airport is not performing as expected. It’s been quite quiet, which reflects broader issues with the region’s development.”

Furthermore, the situation has been complicated by a high-profile corruption case involving Trinh Van Quyet, a prominent Vietnamese property and aviation tycoon. In 2017, Quyet publicly showcased his interest in building resorts featuring casinos in Van Don. Now, he has been charged with fraud and stock market manipulation. Quyet’s FLC empire, which includes luxury resorts, golf courses, and the budget airline Bamboo Airways, had been a significant force in Vietnam’s real estate and aviation sectors.

Despite these setbacks, there remains some positive outlook. Another Vietnamese gaming expert, who also preferred to remain anonymous, shared a more optimistic perspective on the Phu Quoc and Van Don projects, emphasizing that the future of these projects is not entirely negative. The expert pointed out that the region’s tourism industry is recovering and expanding post-COVID. This growth could benefit the integrated resort sector in the long run, providing a more favorable environment for future success.

He also highlighted Vietnam’s economic resilience, noting that the country is an economic powerhouse that does not enter into projects with the intention of failure. He cited examples of Vietnam’s robust economic growth and strategic investments as indicators of potential success. For instance, Vietnam surpassed its 2023 tourist arrival target. Initially aiming for 8 million international visitors, the goal was revised upward to 12.5–13 million in October. By the end of the year, Vietnam exceeded this revised target, welcoming over 12.59 million foreign tourists. This strong performance continued into 2024, with Vietnam welcoming 8.832 million foreign tourists in the first six months, marking a 58.4 percent increase year-on-year.

Furthermore, the expert observed that regional casino revenues are on the rise. He specifically referenced the strength of the Philippines’ casino industry as an example of how growth can be achieved despite current challenges.

By fLEXI tEAM