Backers of a destination-scale resort casino near Vietnam’s coastal city of Da Nang say they’re making progress in securing funding for the project.
VinaCapital, a Vietnam-facing fund manager and property developer, said it is partnering with Los Angeles-based financiers Peninsula Pacific on the 500-room luxury hotel with gaming planned for 1,000 hectares of a government-sponsored economic development zone in the central province of Quang Nam.
Peninsula’s Chairman M. Brent Stevens is the founder of Peninsula Gaming, a US operator that owned casinos in the states of Louisiana, Iowa and Kansas before it was sold to Las Vegas-based Boyd Gaming in 2012 for $200 million in cash and $1.2 billion in debt.
South Hoi An, as the Quang Nam venture is known, was initially planned by VinaCapital in partnership with Malaysia-based resort conglomerate Genting that envisioned a massive mixed-use leisure and residential complex to be developed in phases and totaling US$4 billion at full build-out. Genting withdrew in 2012, however, and the project has languished. Vina has since downsized it to make it more attractive to investors. The land allocation has been reduced by one-third, and the firm has asked for local permission to increase the size of the casino from 20 table games to 90 in the first phase and for an extension of the investment certificate to 50 years.
No details about a time line or Peninsula Pacific’s investment were immediately available, according to news reports. But an official with the economic zone said a newcomer could acquire up to an 80% stake in the project, with VinaCapital retaining the rest.
Foreign investment figures prominently in Vietnam’s desire to leverage tourism to help boost the economy, and some 10 provinces have applied for permission to host casinos in their jurisdictions. In line with this, the Communist Party’s Politburo, the final authority on government policy, has voiced its tentative support for rescinding a longstanding ban on casino gambling by the country’s citizens—albeit with conditions and on a trial basis with a view to supporting a proposed investment in an integrated resort with gaming in a special economic zone in the province of Quang Hinh, which is close to China and the popular tourist destination of Halong Bay.
Farther south, the government also has a vested interest in the success of The Grand – Ho Tram, which opened last summer on the South China Sea coast about 70 miles from Ho Chi Minh City at a cost of US$500 million. Developed with US and Canadian capital, it is the largest investment in resort development in Vietnam’s history, and it’s reported to be struggling in the absence of domestic play.
In the meantime, millions of Vietnamese evade the casino ban every year by crossing the border to gamble in Cambodia, resulting in a massive exodus of currency and tax revenues the government is anxious to recover.
The National Assembly, where 90% of lawmakers are Communist Party members, is reported to be gearing up for a vote on loosening the ban as part of a comprehensive framework for regulating the industry.
