This spring was supposed to bring a watershed event to Vietnam’s tourism industry and its global economic aspirations: Vietnam’s first Las Vegas style casino. Instead, Las Vegas corporate pillar MGM is abandoning its contract to manage the Grand Ho Tram resort for Canadian investor Asian Coast Development.
The $4 billion beachfront resort East of Saigon on the South China Sea had experienced a series of delays, cost overruns, and regulatory concerns. But the heart of the issue may be a simple reality: Vietnam isn’t ready for Las Vegas and the elements of western culture it represents.
Luck plays a significant role in Vietnamese culture. Some people visit fortune-tellers before making decisions. Children get “lucky money” in celebration of the new year. Informal (illegal) lotteries and gambling parlors flourish in villages countrywide. The government sponsors a lottery and permits small casinos in high end hotels.
But casino gambling on a grand scale is another matter; the Vietnamese government was so anxious about the Ho Tram casino that Vietnam had planned to allow gambling there only by foreigners, not Vietnamese citizens.
Apparently, Vietnam’s discomfort translated into reluctance that discouraged MGM from participating in a losing business proposition. Ho Tram partners faced a range of roadblocks that may have included off-the-books expenses that could have interested US regulators.
So last month MGM filed notice with the US Securities and Exchange Commission that it was exercising its right to cancel its contract. Thus, MGM joined Malaysian casino operator Genting and Las Vegas Sands in getting cold feet dealing with Vietnam’s ambivalent bureaucracy.
Asian Coast Development says it will open the resort when it finds a replacement for MGM to manage 2,000 hospitality professionals and the gaming facilities, two 5-star hotels with 541 rooms, a golf course, nine restaurants and luxury retail outlets that comprise the $500 million first phase of the project. Ultimately, the project calls for a 400-acre entertainment complex on a mile of seacoast to be developed over 10 years.
This will give the Vietnamese culture more time to adjust to the idea of the ultimate exercise of capitalism in their communist country. But economically, it is a major setback as Vietnam competes with its neighbors for the Asia-Pacific’s lucrative resort-casino market.