Inside Asian Gaming

INSIDE ASIAN GAMING | June 2011 36 laid off, casinos having to reduce other costs and customers taking their business out of state. It can happen anywhere but thankfully there are jurisdictions—Nevada and Singapore among them—that understand the wider economic benefits and investment that come from low, stable and predictable tax rates. As I said, the Government of Vietnam understands the issues and has shown consistent thinking. “I’ve not seen the government falter on one promise they’ve made to MGM and/or ACDL.” – Lloyd Nathan I have had the privilege of speaking to governments all over the world. I gave evidence before the UK parliament on gaming; I’ve also given evidence to the Japanese diet. And I can say that the Vietnamese government is very, very well versed in the intricacies of gaming. They have gone out of their way to visit several gaming destinations around the world. They’ve met with the Nevada Gaming Commission and other regulators several times. And their approach to date has shown a desire absolutely to create a properly regulated environment; one with the right fiscal structure and which at the same time enables commercial enterprises to thrive. Does that clarity also apply to corporate tax rates? LN : Under our investment certificate—which is the governing document of businesses in Vietnam—we have certain tax breaks codified there. So we know up front what breaks we have and are appropriately entitled to. I’ve been involved in this project for four years—three years wearing an MGM hat and one year as the CEO of the company. I’ve not seen the government falter on one representation they’ve made to MGM and/or ACDL. Has the Vietnamese government confirmed that Ho Tram is part one of a three-part plan for gaming resorts in the country—the other two being at Da Nang on the central coast, and Halong Bay in the north? LN : I cannot presume to speak on behalf of the Vietnamese government. They will do as they see fit. I will stress again how well versed they are in gaming and how well versed they are in the competitive dynamics around Asia when it comes to fiscal [tax] rates and within their own country. It has been suggested that they are looking to create those three licences. We haven’t seen anything to contradict that. Da Nang has 750,000 people and very poor ‘airlift’ [flight connections]. Competitively I’m not concerned. And if they do come in, I would suggest it would give extra weight to the push for an appropriate regulatory environment and everything that comes with it. The project in the north I don’t have a comment on because my understanding is that’s not out of the gate. We are 120 kilometres fromametropolis of over 10million people [Ho Chi Minh City] and we have significant airlift with a new airport coming online. If sports betting is legalised for Vietnamese citizens as proposed, would you be able to offer it on site to your local guests? LN : The current sports betting decree that is going through a highest level of service that’s offered in Vietnam and in this particular part of the world. Steelman’s done a fantastic job designing a beautiful product and we intend to bring the level of service to it that people expect from MGM Grand and MGM Hospitality. We’ll have a lot to offer not only to the gaming customers who come from all over the world, but also the local people here in Vietnam. We’ll offer them a level of entertainment and a quality of service that they haven’t previously experienced here in Vietnam. Where do you expect your gaming customers to come from given that Vietnamese won’t be allowed to gamble unless they have access to a foreign passport? JS : I think they’ll come from mainland China, I think they’ll come from Thailand. I think we’ll see that many customers that today are going to Macau will come here for a change. I think you’ll see customers that go to Singapore [casino resorts] come here for a change. I think a lot of people are going to want to come and check it out and find out what MGM Grand Ho Tram is all about. Will you be able to market to VIP players who are already customers of MGM Macau? JS : We expect to work closely with MGM Resorts International on how we bring customers here to Ho Tram. Has ACDL had any assurances from the Vietnamese government on the tax rates for gaming? LN : The Government of Vietnam is in the process of drafting a Gaming Decree that among other matters will bring clarity to its existing gaming structure, including fiscal. They are a government well versed in the intricacies of gaming, as well as the competitive dynamics in the Asian region, and based on what has happened to date, we are confident there will be an appropriate regulatory and fiscal structure. One industry practitioner with experience of Vietnam expressed concerns to IAG that gaming tax rates in Vietnam can change without notice. LN : In 2003, the then Governor of Illinois decided to double the top gaming tax in his State to 70%, the second hike in two years. It was a bolt out of the blue for many and resulted in people being MGM Grand Ho Tram Game on—an artist’s impression of the gaming floor during phase one