While Europe and America have been fretting about link m88 casino banking, Southeast Asia appears to be banking on casinos.
Genting (GENTING:KLS), the Malaysian gaming group that built the other casino in Singapore, Resorts World Sentosa, is planning to build a casino resort in central Quang Nam province in a joint venture with VinaCapital, one of the longest-running foreign investment firms in Vietnam.
With Vietnam battling inflation and low confidence in its banking system, the government may be increasingly tempted to gamble on allowing more casinos.
While these markets will likely remain smaller than Singapore and even Malaysia, we sense they could provide better growth prospects over time, albeit with added country risk/limited liquidity.
One will be managed by NYSE-listed MGM Resorts International (MGM:NYQ), which owns some of Las Vegas’ most well-known casinos, while the other will be run by Pinnacle Entertainment (PNK:NYQ), another NYSE-listed group with casinos in Nevada, Louisiana, Indiana and Missouri. But the casino market is set to be transformed by Asian Coast Development, a Canadian developer backed by Harbinger Capital, a US hedge fund, which is building two large casino resorts on the beachfront Ho Tram strip, 80 miles southeast of Ho Chi Minh City.
But regional governments long resisted calls from US and other casino companies to allow them to open up, arguing that legalising gambling would cause social problems.
From Singaporeans playing illegal football pools through a telephone broker in Malaysia to Vietnamese gambling over cards at a pool hall, there is clearly strong demand for gambling in much of Southeast Asia.
Foreign money transforms Vietnam resort city, FT
Genting Singapore beats estimates, FT
Long odds for Macao plan to diversify, FT. Last month, Pinnacle agreed to buy a 26 percent stake in Asian Coast Development for $95m.
In a recent note to clients, analysts at Citi argued that with Asia so under-served, proposed new casino resorts in Cambodia, the Philippines and Vietnam will “generate renewed interest in the space.”
The Vietnamese government, which frequently campaigns against “social evils” such as illegal gambling, prostitution and alcoholism, remains nervous about opening the field for more casinos.
But foreign investors sense the winds may be changing. Earlier this year, Michael Leven, chief operating officer of Las Vegas Sands, which built the large Marina Bay Sands casino in Singapore, came to Vietnam to talk to the government about opportunities here.
There are currently only 199 licensed gambling venues serving the four billion people who inhabit South and Central Asia, compared to around 1,600 casinos in North American and 1,200 in Europe, according to Asian Coast Development, which is building Vietnam’s first large-scale casino resorts.
It will dwarf existing outfits such as the Silver Shores International Resort in Danang, which euphemistically calls its small gambling centre an “adult entertainment centre with financial rewards” rather than a casino, much in the same way that Singapore prefers to call its casinos “integrated resorts”.
Following the highly profitable legalisation of casinos in Singapore, which will see the city-state rival Las Vegas as the world’s second biggest gambling market after Macao next year, other Southeast Asian nations are moving down a similar path.
The MGM Grand casino, which will is scheduled to start a phased opening from 2013, will eventually have 90 gambling tables and 1,000 slot machines.
Vietnam has allowed a number of small casinos to operate in recent years, so long as they serve only foreigners and keep a relatively low profile
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