The Vietnamese gaming market is approaching saturation, says Robert Gibson, a 20-year veteran of the casino industry in the Southeast Asian powerhouse.
In an interview with AGB, Gibson, CEO of High Edge Sports Group, shares some of his observations on Vietnam’s gaming market. He believes there are still opportunities for investment, but it is no longer a case of “build it and they [the players] will come.”
Vietnam currently lacks a single gaming law, regulatory agency, or licensing structure. Besides integrated resorts such as Hoiana Resort, which opened during COVID-19, and the Corona Resort & Casino Phu Quoc, the country still has electronic gaming clubs, which are spread across the country. These clubs, which offer electronic gaming only to foreign passport holders, are permitted to operate in 4- and 5-star hotels predominantly located in tourist destinations.
So far, Corona Resort is reportedly the only casino open to Vietnamese citizens, who are willing to pay the entry fee and satisfy specific entry requirements.
Oversupply
For VIP Gaming Clubs, which only allow foreign players and are not licensed for live table games, Nguyen indicates that the industry is starting to resemble the Cambodian slot club market of the early 2000s, characterized by an oversupply of machines and locations.
Nguyen observes that for many years, “there were a few clubs in each of Hanoi, Ho Chi Minh City, and Da Nang, with at most one or two in smaller cities. There were enough players to keep them profitable, mainly Koreans and other Asian nationalities who were working or long-term visitors to Vietnam.”
However, today, the market seems to be approaching saturation. “There are simply too many clubs, and unless your location or marketing affiliations are strong, your club will have problems.”
On the demand side, Vietnam’s tourism sector has had a strong start in 2024. According to the latest update, the number of international visitors to Vietnam increased by 58.4 percent year-on-year, reaching over 8.8 million in the first six months of 2024. This includes nearly 2 million visitors from China, driven by the ongoing recovery of Chinese tourism post-COVID.
Vietnam is targeting 17 to 18 million international visitors in 2024, with tourism receipts expected to reach VND840 trillion ($34.7 billion).
Last year, Vietnam received 12.6 million international visitors, about 70 percent of pre-pandemic figures, with tourism revenue reaching VND678 trillion ($27.8 billion).
Despite the ongoing recovery from the COVID-19 impact, Nguyen is cautious about the current Vietnam gaming market.
Nguyen himself has invested in two VIP gaming clubs alongside veteran casino executive Tim Shepherd from Fortuna Investments. “We have focused on the North of the country. I am from that part of Vietnam, and my connections are stronger. We see too many failing clubs in the South.”
The strategy also indicates that the threshold for investing in the Vietnamese gaming industry is increasingly high.
Competition between slot machine suppliers
Despite the partial oversupply of gaming facilities in Vietnam, Gibson identifies several opportunities within the industry. The Vietnamese gaming market has faced significant challenges due to the pandemic, which led to the closure of many gaming clubs and a subsequent market saturation. However, Gibson remains optimistic about the potential for growth and investment in this sector.
Gibson points out that a number of clubs with prime locations were forced to close during COVID-19 and now require investment to reopen. These locations, previously profitable, present viable opportunities for investors willing to revitalize them.
“There are many clubs that had good locations and were doing well before the pandemic hit,” Gibson says. “With the right investment, these clubs can return to profitability.”
Additionally, he sees potential for new manufacturers to challenge established players like Aristocrat and Interblock, who currently dominate the market for gaming machines. These companies have maintained a stronghold due to their well-established presence and extensive product offerings. However, Nguyen notes that their products are also the most pricey on the market, which creates an opening for more cost-effective competitors.
