Technically, “online gaming” [business] in Vietnam may cover: (i) “online game”, a game played over some form of computer network; or (ii) “online gambling”, a term for gambling using the Internet.
In the latter case, Vietnamese law does not treat online gambling as a full-fledged, independent and separate branch of gambling industry. Rather it deals with major branches of gambling activities which are (i) lottery; (ii) casino/prized electronic machines; (iii) horse and greyhound race and (iv) sports betting, etc. and sets forth specific conditions and restrictions on the same. Except for online lottery, other forms of gambling using Internet-based have been so far strictly prohibited or at least not officially permitted.
It also bears noting that market access to such gambling branches varies by investment forms, legal entity of the investors and capacity thereof, etc. For example, while lottery business is solely reserved for State owned enterprises, foreign investment in casinos is permissible. By the same token, depending on characteristics of specific gambling business, the scope of activities can be either limited to a specific approved location in a major city of Vietnam (e.g. – dog/greyhound race or traditional lottery) or nationwide (online lottery).
As gambling is a sensitive activity which requires a high level of surveillance, a gambling investor must essentially follow a general principle of “doing exactly what your license states”. To make it clearer, if an investor is permitted to open a casino at a specific resort only, it will not have the natural right to offer casino products through the Internet. Similarly, besides 63 State-owned lottery enterprises in each province, a lottery corporation was established in 2013 (i.e. – Vietlott) to offer online lottery lotto games, digits games and fast drawing games nationwide. However, it can be broadly argued, though not absolutely guaranteed, that if an investor is licensed to carry out a specific [and conventional] “gambling” activities, it may have a good position to apply for the same business but operated on an Internet-based platform.
Generally, an investment project in gambling must be first granted with an investment certificate issued by the people’s committee at provincial level. For such purposes, the investors must obtain in-principal of the Prime Minister on an ad-hoc basis. In fact, the Ministry of Finance (the “MOF”) is expected to play a crucial role in deciding whether a Project will be accepted. Subsequently, the project’s owner may have to obtain a special business license from the MOF upon its fulfilment of post-establishment conditions (i.e. – completion of construction works, installment of equipment and facilities, etc.).
In principle, gambling, other than lottery and betting at licensed sport center(s), is strictly prohibited in Vietnam and individuals involved in gambling activities may face criminal charge. Vietnamese law on gambling business is therefore still in its infantry stage though initial ideas date back to early 2000s. Gambling licenses have granted to selected investors mainly on a piloting scheme and with strict requirements (i.e. – not letting Vietnamese nationals in). Draft laws on sport betting, casinos, which serve as key guidance on gambling business, have been discussed from time to time but not yet been issued.
In late 2013, two major draft decrees on gambling activities (i.e. – betting and casinos), content of which is not made public, were submitted by the Ministry of Finance, as the draftsperson, to the National Assembly of Vietnam for the latter opinions. It appears however that little progress has been since made due to conflicting opinions among the Government and divisions belonging to the National Assembly on these sensitive issues.
To date, Vietnam has 01 national online lottery company (i.e. – Vietlott) and 63 [traditional] lottery companies operating at provincial level. 07 casino licenses have been granted to investors as a part of their resort complexes but only 6 of which have commenced their operations. A number of 5-star hotels in major cities of Vietnam are permitted to run prized electronic machines. The only house race ground which was open to public was closed in 2013. Another greyhound race ground is still active in Ba Ria – Vung Tau Province, Vietnam.
In light of the above, a foreign investor wishing to invest in this sector may consider different channels to access Vietnam online gaming market. For example, it may cooperate with licensed vendors in Vietnam as a supplier of equipment, machinery or materials or provider of technical assistance services relating to the same. Or else, it may actively approach the MOF to initiate a proposed plan.
Please do not hesitate to contact Oliver Massmann under email@example.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
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