Casinos report losses while waiting to be opened to Vietnamese
Most casinos have reported losses, caused mainly by the fall in the number of travelers from China and Taiwan.
Running the only casino opened to foreigners in Ha Long City, Hoang Gia International JSC has reported unsatisfactory business results. Though revenue in 2016 increased by 15 percent compared with the year before, its profit was minus VND18 billion.
The casino brought VND88 billion in revenue to Hoang Gia International, the second largest revenue after hotels. Thevcompany took a loss of VND36 billion because of the high capital cost of VND123 billion.
Casinos’ continued losses or modest profit is not a surprise. A report of the Hai Phong City Party Committee showed that by the end of 2012, Do Son Casino, one of the first casinos in Vietnam, reported accumulative loss of VND169 billion.
Meanwhile, the 2016 annual report of Donaco International, an Australian group that runs Aristo International in Lao Cai province, showed that casinos still bring profit, but the profit in Vietnam is just 1/10 of that in Cambodia.
Vietnam now has seven licensed casinos open only to foreigners, and most of them report unsatisfactory business results, mostly due to the ban on Vietnamese to enter casinos.
Since Vietnamese are now allowed to gamble, casinos’ operation depends on travelers, mostly from China, South Korea and Japan.
Hoang Gia International has been taking losses since 2013, though Do Son is the only casino for foreigners in Ha Long City, a well known tourist city. The biggest post-tax loss, VND153 billion, came in 2014.
In 2015, the company reported a loss of VND56.5 billion because of high capital costs, while revenue was modest, at VND33 billion.
The company’s board of management explained that the number of travelers from China and Taiwan has decreased sharply. Therefore, it was seeking to sign contracts with tourism agents to attract more Chinese travelers, and also trying to attract more travelers with high income from South Korea and Japan.
The changes in the policies applied to Chinese travelers and the competition with other casinos have had a big impact on Do Son Casino.
As for Aristo International, in 2016, its casino attracted 148,000 players, but the revenue from the business was $23 million only, or 1/6 of the revenue it gained in Cambodia, while the pretax profit was $4 million, equal to 6 percent of the $62 million profit in Cambodia.
Analysts have warned that casinos would see their business facing more challenges as there are seven casinos, while more casinos would be set up in the future. Quang Ninh, Hai Phong, Da Nang and Kien Giang, the key tourist provinces and cities, already have, or will have, casinos.
Thanh Lich, VNN