Saturday, July 02, 2022

Long-delayed sports betting plan may miss goal


Vietnam, a country of keen gamblers and soccer fans with a population of about 90 million, may be on the verge of legalizing sports betting after two decades of procrastination. However, experts say a proposal put forward in August by the Ministry of Finance is unlikely to go far enough to open the market and stamp out rampant illegal gambling.

The MoF is seeking approval for legalized betting on soccer for over 18s. The betting would be limited to certain overseas matches approved by the Ministry of Culture, Sports and Tourism. Under the draft plan, people would be permitted to bet on markets like the scores and the number of red and yellow cards, though it is unclear if popular markets like Asian Handicaps, total goals and 1X2 (home, draw, away) would be included.

However, the draft also sets out a daily betting cap of VND1 million (around US$45), which was first mooted in a 2010 draft. The low limit has been roundly criticized, with high-rollers still likely to look for alternative routes to place their bets.  

Steve Karoul, president and CEO of casino consultancy Euro-Asia Consulting, has lived and worked throughout Asia, including as a retained consultant for Vietnam’s Ho Tram casino. He is one such critic of the limit. “The $45 per-day cap may be fine for the average labourer where the daily salaries are low, but for the businessman and the more aggressive sports bettors that figure will be ridiculously low and they will, therefore, continue to use illegal bookmakers or offshore facilities to handle their betting.” Also, it’s not hard imagine a sports bettor with deep pockets using a network of individuals to place a series of VND1 million bets on his behalf.

Black market proliferates

In the meantime, a steady stream of news reports reveal how Vietnamese authorities continue to break up illegal betting rings. According to Thanh Nien News, one ring busted in June in the north of the country was worth an estimated VND7.6 trillion ($340 million). Another illegal operation taken down shortly afterwards in Ho Chi Minh City was said to have handled bets worth VND450 billion ($20 million) via Philippines-licensed outfits like v9b.com (V9BET) and Bong88.com. Betting is increasingly being facilitated online with foreign sites hiring local bookies to acquire clients in Vietnam and collect payments. The problem for the government is that the situation is akin to whack-a-mole; smack one shadowy betting organization and another pops up.

For years now, sports betting has thrived surreptitiously in this communist country. Estimates suggest Vietnamese bettors staked $500 million on Euro 2016 matches alone.

“The Vietnamese government estimated that more than $1 billion was wagered on football in 2006,” says Lorien Pilling, director of Global Betting and Gaming Consultants, “and that figure could easily have trebled over the last decade, much of it being channelled to online sportsbooks licensed offshore.” He continues: “In any gambling market, to combat illegal gambling a government has to offer licensed gambling that offers the services and bets that gamblers want.” By that, Pilling is referring to types and frequency of bets, competitive odds, choice of markets, as well as both brick-and-mortar and online options. Choice, fair odds and a daily cap above VND1 million means bettors are less likely to go down the illegal route.

If this activity was finally legalised it would mean a significant boost to state coffers through taxation, not to mention the creation of jobs. As it stands, millions of dollars in potential tax revenue are being lost every year to illegal bookies and offshore sites. Karoul says: “Sports betting in Vietnam is huge and international soccer matches are of great interest, so if the Ministry of Finance is successful with legalising sports betting I think the government will be able to raise substantial new tax revenue.”

The amount of money slipping out of the country every year and gambled in foreign casinos is an on-going cause of concern for the government. Dr Le Dang Doanh, former director of Hanoi’s Institute for Economic Management, says Vietnamese gamblers spend $800 million a year in casinos abroad, primarily in Macau and Singapore. Of this, at least $250 million is gambled annually in establishments across the border in Cambodia, he says.

Open to abuse

But despite the potential windfall from sports-betting regulation, some fear the consequences of suddenly opening the floodgates on gambling in this soccer-crazed nation. The most obvious concern is that it would be a catalyst for a surge in problem gambling rates, as well as the knock-on effects. “There are two strongly opposing views among the public when it comes to the legalization of gambling,” Dr Doanh tells AGB. “The pro side argues that a huge amount of money is being spent abroad while the other side is very concerned about criminality, financial debts and dramatic, negative social impacts of gambling.”

However, there’s no denying that many Vietnamese have a seemingly insatiable appetite for gambling – they have been betting for centuries on everything from dice games to cock fighting.  

On top of this, Vietnam’s emerging economy has created plenty of wealthy individuals who see high-stakes gambling as a legitimate leisure activity. “While working in Singapore,” Karoul recalls, “I saw some very large players from Vietnam who were million dollar-plus players, but the interesting thing was that they were quite young. Vietnam has many new emerging businesses and, therefore, many younger and more aggressive businessmen are now afforded good opportunity to quickly become successful and earn small fortunes. These are the Vietnamese players of the future.”

For now the industry is still waiting to see whether the prohibition on sports betting will finally be lifted. Pilling, though, isn’t holding his breath on regulation following years of government inertia. “The Vietnamese government has been considering legalising sports or football betting for nearly two decades, so I will wait until the first bet is actually struck before I believe it is happening this time around.”

 

 

 

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