Inside Asian Gaming

INSIDE ASIAN GAMING | September 2008 18 In Focus Consultant. He says the decision to join the Ho Tram project was a no-brainer, as “it will be one of the most exciting gaming developments after Macau and Singapore.” Mr Lee believes Vietnam is “a much easier- to-sell destination than Cambodia,” adding that unlike Macau, Vietnam will have a well diversified target market. He also points out that the recent tightening of visa restrictions on Mainland Chinese seeking to travel to Macau “will in the long run greatly benefit alternative gaming destinations, with the Ho Tram strip project likely to be one of the likely major winners.” Competition could also emerge within Vietnam. To date, ACDL is the only major casino resort operator to be licensed by the government, but US-based investment company Oaktree Capital Management has announced plans to develop a US$5 billion luxury seaside resort in Da Nang. Notably, although the media reported extensively on the initial announcement in April, there have been no subsequent reports on the project’s progress. Furthermore, Mr Aymong believes the Ho Tam project enjoys an unrivalled location in the country. “We’re ideally situated. We’re an hour and a half drive from Ho Chi Minh. We’re 45 minutes by ferry. We’re 15-20 minutes by helicopter. Our climate is very tempered. It’s about 26-28 degrees [Celsius] all year. It’s the best location in Vietnam. But we welcome competition as well. The more resorts, the more exciting Vietnam becomes as a destination.” Showpiece Ho Tram will be ACDL’s flagship project, and one which could serve as a “showpiece” of “what is possible to do in an integrated resort, in a more friendly Asian type of way, where we work together with the government to implement strategies and policies,” says Mr Subotic. This could hold the company in good stead if it were to bid for licenses to develop casino resorts in other regional jurisdictions as they open up or expand their casino industries. Mr Subotic points out:“Japan’s still a while away [from legalising casinos]. Taiwan looks like it’s a while away. By the time we’re up and running, we’ll be the only integrated resort in all of Southeast Asia in a beachfront that falls into the vision and ideas of most governments.” Although ACDL expects the Ho Tram Strip will draw an international crowd, Mr Subotic is clear that “our number one clientele will be the Mainland Chinese. Their impact on the region is gigantic. You have a middle class population that’s going to be reaching about 300-400 million people within the next ten years. Those are staggering numbers. “As the Chinesemiddlemarket expands rapidly, as people get more disposable income, as people want to travel more, they want to show different places to their family; it’s a natural evolution towards resorts like ours.” ACDL also expects large numbers of visitors to come from Korea, Japan and Taiwan, with “a little bit of Australia and Russia too,” says Mr Subotic. “People are starting to get exposure to Vietnam. It’s just booming.” Local lift? Mr Aymong stresses that the business plan for the Ho Tram project assumes that Vietnamese nationals will not be allowed to gamble at the resort—the government prohibits locals from gambling at any of the country’s casinos. However, there is speculation that in the coming years the government may consider overturning this restriction. This would considerably boost Ho Tram’s prospects, given the considerable pent-up demand for casino gaming among locals. Vietnam’s population tops 86 million, and the soaring economy means locals are rapidly becoming more prosperous. Vietnamese enjoy gambling as much as other newly wealthy Asians, as evidenced by the thriving gaming industry in Bavet, a gaming town in Cambodia just across the border from Vietnam, intended primarily to cater to Vietnamese players. Considering that “a lot of their gaming revenue goes into the borders, the government is definitely looking into it [lifting the ban on locals gambling in the country’s casinos],” says Mr Subotic. “We have a great relationship with the government,” claims Mr Aymong. “The government’s very wise, and has been very thoughtful on the process. They want to do what’s best for the Vietnamese people, and if they believe that allowing them to gamble is the next step, we think that’s what they’ll do. It’s something that we hope for, and something we think will happen.” So although ACDL plans the Ho Tram project to be a hit even without a potential boost from the lifting of the ban on locals gambling, Mr Aymong predicts the ban could be lifted in as little as three years’ time. “It would be hard not to examine it if you’re a government.It’s a natural evolution.It’s just how do you do it?”’ Furthermore, the rise of upscale integrated resorts—replacing the hitherto no-frills,hardcore gambling halls—is helping to dispel “all the negative implications and stereotypes associated with gaming,” points out Mr Aymong. “And that’s very positive for us. There’s an extremely large demand for integrated resorts. Somewhere to go, something to do. And gaming is just one component.”