Tag Archives: betting

VIETNAM – NOW OPEN FOR BETTING BUSINESS – BREAKING NEWS – WHAT YOU MUST KNOW

 

On 24 January 2017, the Government issued Decree No. 06/2017/ND-CP, which for the first time legalizes international soccer betting in addition to horse racing betting and greyhound racing betting (Betting Decree).

Some key features:

  1. Betting business is treated as a conditional business sector the satisfaction of which is evidenced by a certificate of satisfaction of betting business conditions (Betting Business License).
  2. An entity can only do horse racing betting, greyhound racing betting once they have received an investment registration certificate (which, for a foreign invested company also serves as a certificate of incorporation) and a certificate for satisfaction of business conditions. The investment registration certificate will only be granted for horse racing betting projects with minimum investment capital of VND1,000 billion (~USD459 million). For greyhound betting projects, the minimum investment capital is VND300 billion (~USD137 million).
  3. Investment registration certificate will only be granted to 01 (one) international soccer betting pilot project with minimum investment capital of VND1,000 billion (~USD459 million). The international soccer betting pilot entity will operate within 5 years from the issuance of the Betting Business License.
  4. The Ministry of Finance will grant the Betting Business License to entities with adequate financial resources, business plans and an appropriate betting and racing bylaws.
  5. Enterprises doing horse racing and greyhound racing business must be in the form of a limited liability company or a joint stock company.
  6. A Betting Business License’s term is maximum 10 years for horse and greyhound racing betting business and 5 years for international soccer betting business from its issuance date but still within the lifespan of the Investment Registration Certificate.
  7. The maximum bet is VND1 million (~USD50) a day and the minimum bet is VND10,000 (~US 50 cents). These limits could be adjusted for each period.
  8. Players must be 21 years old and over and not being objected in writing by parents, spouses, biological children and/or themselves to bet.
  9. There should be no more than three horse/ greyhound races in a week at each location.
  10. The minimum rebate shall be 65% of the revenues from selling wagering tickets.
  11. Wagering tickets will be distributed via terminal equipment and telephone (fixed and mobile ones), excluding via Internet or internet-based applications on telephone. However, distribution of wagering tickets via telephone will only be implemented 01 (one) year after implementing the terminal equipment distribution method. In order to bet via telephone, players must have a registered account with the betting business entity. Payment of rebate must be via the players’ registered account and the bank account of the betting business entity opened at a lawful credit institution in Vietnam.
  12. The Betting Decree will take effect from 31st March 2017

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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

 

Horse Race Betting in Vietnam: Don’t Back the Wrong Horse

Investors wishing to invest in horse race betting projects in Vietnam may find themselves in dead end if they do not equip themselves with the appropriate tools to tackle legal challenges in this emerging market

Even though horse race betting was allowed in two pilot projects in Phu Tho (1998) and Vung Tau (2000), there has been no concrete legal framework in place to address the licensing and operation of the horse race betting projects.

In 2010, the Government of Vietnam decided to draft a decree, which is the most superior executive regulation, to formally legalize horse race betting in Vietnam and provide criteria for businesses to invest and operate in this field. This is an effort of the government to maintain the balance between the economic benefits of these hugely profitable businesses and the need to have sufficient governmental control to eliminate the “social evils” which may associate with these projects. The Standing Committee of the National Assembly, which is the legislative body of Vietnam, approved the general policy of this decree; however, the Standing Committee also asked for an empirical study on the pros and cons of horse race betting, together with other forms of betting such as soccer or greyhound race betting. In a recent regular session of the Government in 2015, the Prime Minister instructed the Ministry of Finance to continue working on the draft, based on recommendations from other branches and the National Assembly. There has been no time limit fixed for the issuance of this decree. One of the reasons why there has been significant delay was because of the ambitious target of this decree, which aims to govern not only horse race and greyhound race betting but also soccer betting. Soccer betting has been a sensitive topic in Vietnam and there is a wide prejudice that it associates with crimes, bankruptcy, sports cheats, and money laundering. To speed up the process, the government is considering separating soccer betting from this regulation and focusing on horse and greyhound race betting only.

Even though the latest draft of the decree is not final, investors can find some helpful guidelines for their future investments in horse race betting in Vietnam. In particular, the draft proposes that an entity can only do horse betting once they have received an investment certificate (which, for a foreign invested company also serves as a certificate of incorporation) and a certificate for satisfaction of business conditions. The Prime Minister will decide the issuance of the investment certificate and such certificate will only be granted for horse race betting projects with minimum investment capital of 1 thousand billion Vietnamese Dongs, or equivalent to 459 million United States Dollars. The project must be put into operation within four years from the date of issuance of the investment certificate. Meanwhile, the Ministry of Finance will grant the certificate for satisfaction of business conditions to entities with adequate financial resources, business plans and an appropriate betting and racing bylaws.

While the decree allows Vietnamese players to participate, it limits the maximum bet to one million VND (or less than fifty USD) a day and provides that the minimum bet is ten thousand VND (or less than fifty cents). There should be no more than three races in a week at each location. The minimum rebate shall be 65% of the revenues from selling wagering tickets. In terms of labor, the jockeys must be employees of the horse race operators.

While it remains unknown whether the decree on horse race betting will be issued, investors should not play the “wait and see” game. Instead, they should be proactive in approaching the government authorities for specific guidelines and having a thorough legal strategy to deal with the known and unknown regulatory obstacles. They may also consider setting up a small entity to carry out a pilot project, which is generally subject to lower regulatory thresholds than a regular project, to test the water and set up the basic infrastructure necessary for future investments. These plans cannot be successful if the investors do not have proper legal and financial advice.

The horse race betting market in Vietnam is a difficult race to thrive in and only the most well prepared investors can reap the huge rewards.

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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!