The maximum investment that should be required from any developer considering whether to build a new integrated casino resort project in Vietnam is well below the $4 billion originally stipulated by government officials.
According to a report from Asia Gaming Brief, industry consultant Sam Sheng, Managing Director for Double Square Consulting, stated that current market conditions mean that developers would not be willing to venture more than about $250 million on any new integrated casino resort project for Vietnam.
The government for the Southeast Asian nation is currently in the process of preparing draft legislation for the casino industry and had originally stipulated that any new casino resort would require a minimum of $4 billion in investment. However, this prerequisite has since been cut to $2 billion with the rules are also expected to see locals permitted to gamble in select locations.
“Our argument is that for the current market conditions no more than $250 million is the investment that people are willing to take the risk to invest,” said Sheng in his assessment. “Unless you have all the rules and regulations in place with local gaming, the metro area etcetera; then you can ask for $4 billion.”
Speaking at this week’s G2E Asia in Macau, Sheng revealed that he is currently working with mainly private investors in order to identify several potential casino sites in Vietnam.
“Currently everyone is focusing on moving the VIP operations out of Macau to The Philippines and elsewhere but I don’t think that’s sustainable,” said Sheng. “We are looking at two segments that we think are both profitable and sustainable. We are looking at the younger generation of the Chinese middle-class and the second is the local Vietnamese.”
As a result, he declared that any new integrated casino resort in Vietnam would have to offer a strong non-gaming element that brought in around 65% of the development’s total revenues.