Lao Government seeks sports betting revenue with new lottery offering

The Lao Government is seeking a slice of the country’s sports betting pie, setting up a new online football lottery ahead of the upcoming FIFA World Cup in Brazil, though industry sources question how successful it may be amid the country’s other gambling options.

The new lottery, to start this month, will allow punters the option of placing bets on the outcome of a single match along with parlay wagers.

"It's only to be in Vientiane, so it's not in the other cities," Tim Shepherd, chief operating officer of casino operations company, Silver Heritage Ltd told AGBrief, adding that the March launch is likely to be fairly small.

Shepherd said online football wagering is an extension of the existing state lottery services.

Local lottery agents - mostly Lao women - sell paper lotteries on the street. There is also an online digital lottery under the Insee Trading Company, established in July 2003. The company comes under the State Enterprise Company of Lao Lottery. This offers punters the chance to bet based on two, three and five-digit lotteries.

The football "lottery" is in fact online sports betting. It is referred to as a "lottery" to meet existing legal requirements.        

Gaining a sense of the potential revenue is difficult. Laos, unlike some of its neighbours, doesn’t publish lottery sales figures.

The English language Vientiane Times, said punters' winnings would be paid into online accounts, while losing wagers will be deducted until the balance is exhausted and requires topping up at the local branch office.

However, sources said the new lottery will be competing with other options for sports betting that have been running for several years. There have been illegal bookmaking operations in Laos operating out of Vientiane for many years and it is these revenues that the government is trying to formalize.

"The government is looking to take some of that illegal money into the formal sector and I see no harm with that whatsoever; a good move by the government," an industry source said who is familiar with the gaming industry in Laos.

Shaun McCamley, an executive consultant and chief operating officer of EPA Management, told AGBrief that the football lottery was "low in profile" when set against the existing casino and gambling industry.

"Certainly anything to do with gambling here in Laos they keep a pretty low profile and of course it really depends who is involved in the organization of it and who is going to benefit from it apart from the punters themselves," McCamley told AGBrief.

Lao-based sources told AGBrief that the new lottery appears to be under the control of senior members of the Communist Party.

The new state football lottery is being launched against a backdrop of a relatively healthy gambling industry in the country. Casinos are legal and punters from neighbouring countries where gambling is banned are helping to drive revenues.

Laos has three main casinos located in border areas which draw tourism traffic from neighbouring countries. Last year 3,779,490 million tourists went to Laos, according to the Vientiane Times. About 1.9 million visitors came from Thailand, representing the largest group. This year, the country expects 3.9 million visitors.

McCamley said the industry is generally in "good shape", especially the electronic gaming parlour near the Lao-Thai Friendship Bridge between Vientiane province and Nong Khai province, which has been a major draw for Thai punters. The parlour, called St Club, "has no table games, it's purely electronic gaming machines, slot machines and that's a significant business," he said.

The casino there is noted for its 700 slot machines. "It does extremely well - and that's a phenomenal money-making machine," says Silver Heritage's Shepherd.     

The Dansavanh casino, which caters only to foreign players, is "continuing to work as normal. There's no government issues there with them and the business is continuing to tick along - and they have table games," he said.

The Savan Vegas Casino in Savannakhet in the province bordering the Thai province of Mukdahen to the south, is also an attraction for foreign tourists. "That's a standard casino again with table games," McCamley said.

The casino has been caught up in a dispute with the government over unpaid taxes but is still operating as management works through the issues. Senior management at the casino told McCamley they remained confident over resolving their problems.

Lao casinos are largely controlled by Chinese-backed companies, such as the one located in the tax-free special economic zones in Boten to the far north, has since closed amid allegations of criminal activity, including links with money laundering, murder, fraud, kidnapping, drugs, human trafficking and the sex trade.

A Lao Deputy Minister, Somsavat Lengsavad, in September last year was reported saying the country would no longer issue casino concessions in special economic zones. In particular he criticized Boten casino’s "contribution" amid reports of the issues of criminal gangs operating there.

However, just this week it was announced that Solar Entertainment Corporation announced has signed a memorandum of understanding for a new casino resort with Lao authorities. The agreement covers development projects worth $50 million in the country’s Champassak province. They include the Khonphapheng Resort, a golf club and casino project in Khong district and a survey for a four-star hotel at the Vangtao border checkpoint.

Who knows what other opportunities the government might consider given the right project offering?