Vietnam should let licensed businesses operate its sports betting market in order to maximize tax revenues and other benefits for the State, both experts and entrepreneurs say.

The gaming industry, including sports betting and casinos, has seen tremendous growth in some countries, fulfilling the recreational demand and contributing significant sums to the state coffers.

In Vietnam, however, the industry’s growth has been scant. Not a single business has been licensed several years after the government’s Decree 06/2017 was issued on horse racing, greyhound racing and international football betting.

Ban does not mean non-existence

Jan Rehola, a member of the Expert Group for Online Gambling at the European Commission, said that in 2021, Sweden was the European country with the highest share (80%) of online gambling activity, followed by Latvia (75%), Lithuania (67%), Romania (65%) and the UK (65%).

Rehola, also former director of the Department of State Supervision of Betting Games and Lotteries under Czech’s Ministry of Finance, said that many countries that have much larger gambling markets by revenue, such as Spain, Italy, Germany and France, still had a relatively low online proportion in their respective gambling markets.

“It is currently virtually impossible for regulators to keep up with the technological developments and innovations that are penetrating the online gambling industry,” he said.

He cited as examples activities facilitated by new trends and technologies like blockchain, cryptocurrencies virtual reality (VR) and artificial intelligence (AI).

Regulatory models cannot always reflect technological developments of the gambling products that often remain out of the legal gambit, he stressed. Cultural, economic, historical, and social differences also make it difficult to fully adopt models from abroad, he added.

The key lesson from international experience is that if the regulations set unreasonable conditions, there would be an uncontrolled increase in illegal online gambling.

He highlighted issues related to permitted types of gambling possibilities of their legal promotion and advertising, bonus offers, player support program and high tax rate/turnover tax.

“Banning a particular type of game does not mean that it will cease to exist,” Rehola said, adding that authorities should set conditions for adequate promotion of legal online gambling that ensures sufficient visibility of legal products while not endangering at-risk populations (minors, socially vulnerable).

“Advertising is the last tool that makes a distinction between legal and illegal gambling,” he said, explaining that legal online gambling must be easily recognizable.

Authorities should strictly enforce the ban on advertising illegal gambling and blocking any form of advertising thereof. Advertising targeted at minors should also be banned.

Efficient protection

Penta Investment, a betting development partner of Fortuna, highlighted the trend of legal activities outweighing illegal ones.

Operating in regulated markets not only mitigates risk but also fosters trust and sustainability in the gambling industry, Penta said.

Legal compliance can help reduce the risk of legal penalties and shutdowns while ensuring fair play and transparency for customers by providing mechanisms for dispute resolution and protection of player rights.

It can also create a safer and more predictable business environment, minimizing the impact of illegal activities and fraud. Besides, it can build credibility with customers, investors and partners, enhancing brand reputation through responsible gaming practices.

Penta said optimal gambling taxation at a maximum of 25% of operators’ gross gaming revenue would ensure long-term sustainable market development.

A dominant share of over 80% of the market operated by licensed operators can help maximize tax collection (gaming/employment/corporate) and provide other benefits including employment opportunities and sponsorships.

It can also boost effective player protection through operators’ adherence to strict responsible gambling and digital protection measures, including deposit limits and age verification.

Another advantage would be successful prevention of money laundering and misuse of funds (such as social support) through strict KYC and AML procedures. An effective monitoring and enforcement system will ensure compliance with valid norms.

To facilitate this, operations predictability and risk assessment clarity are need for investors to ensure that their rights and assets are safeguarded, encouraging them to grow and offer fair mechanisms for conflict and dispute resolution.

The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) and The Investor will organize a workshop on possible amendments the government’s Decree 06 on horse racing, greyhound racing and international football betting services. The workshop aims to sped up development of legal policies on these services.

The workshop will take place from 1:30 p.m. to 5:30 p.m. on Thursday, November 28, 2024 at the Ministry of Planning and Investment building, 65 Van Mieu street, Dong Da district, Hanoi.

Attendees will include National Assembly deputies, representatives of ministries, experts and leaders of business associations as well as international and domestic businesses.