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No finish line in sight

Released at: 10:22, 12/09/2016

No finish line in sight

Photo: Viet Tuan

Racecourse investments continue to be proposed in Vietnam but legislation still seems some distance away.

by Khanh Chi

After a long period of delay a number of horse racecourse projects are now being planned around Vietnam. One to suffer from the long delay is the Thien Ma Madagui project in the central highlands province of Lam Dong. On a site of nearly 380 ha in Da Huoai district, a horse-racing complex has been on the drawing board since 2003.

The Lam Dong Provincial People’s Committee approved the project from the Thien Ma Madagui Racing JSC, a joint venture between the Thien Ma Entertainment JSC and the Hong Lam Madagui Limited Company, in 2003. The complex, with a racing track, a polo club and an equestrian center, was expected to attract even greater numbers of domestic and foreign tourists to the already popular central highlands province, whose capital is Da Lat. There is still no indication that the project will proceed, however, though site clearance has been completed and some horses are already on the site.

Two years ago the project’s scale was cut to nearly 64 ha with investment capital of around $50 million. A representative from the Lam Dong Department of Planning and Investment (DPI) confirmed with VET that “the Thien Ma Madagui racecourse has been reactivated.” Specifically, some categories of the project have been implemented, including three breeding stables holding about 100 horses, a horse training area, a veterinary dispensary, and housing for workers.

A range of other horse racing complexes in Hanoi, Da Nang, Phu Yen, Binh Duong and Binh Phuoc have investment in place but are waiting for official legislation to be introduced. Gambling is a sensitive business field in Vietnam and a topic of some controversy among authorities. The government has delayed the licensing of projects relating to horse and dog racing for many years out of a fear of the associated gambling leading to social ills. Since 2010, however, it has been loosening restrictions. 

At the starting line

A draft decree regulating investment in and the provision of betting services was introduced in 2010 by the Ministry of Finance (MoF), which paved the way for investors to develop horse and dog racecourse projects. In 2014 the government directed the ministry to conduct research and create a pilot project on international football gambling. According to MoF, the issuance of the decree is crucial for building a legal framework to control gambling and bolster management by the government.

At a meeting with relevant agencies on drafting guidelines on gambling in Vietnam in early August, Deputy Prime Minister Vuong Dinh Hue asked the MoF to fine-tune draft guidelines on gambling on horse and dog racing and football. Football gambling will be trialed for five years, both online and in betting shops, with a restricted distance between the shops and schools or children’s playgrounds, the government announced recently. The MoF then finalized a draft decree and submitted it to the government.

The Australian Golden Turf Club Limited Company in June received a license for a $100 million investment in a racecourse in the south-central Phu Yen province. In a written response to questions from VET, the Phu Yen DPI said the course will include a grandstand, horse and dog racing tracks, and a high-end tourism area on an area of 10 ha, and landscapes and other infrastructure on 30.4 ha. Once open the racecourse will create around 500 jobs.

Hong Kong’s Matrix Holding Limited Company proposed in July that it develop a horse racing complex in central Da Nang city. “Matrix Holding set up plans to conduct research on a horse racetrack a few months ago,” said Ms. Huynh Lien Phuong, Deputy Director of Da Nang’s Investment Promotion Center. “It has not officially submitted registration documents as yet.” 

Matrix Holding plans to establish an entertainment complex consisting of a racetrack, a healthcare center, and gambling and amusement services. The total investment has not been announced but will be no less than $45 million, which is the minimum capital required under the draft decree. The timeline for completing a racecourse project is four years from the date of licensing.

Another project announced in the last few weeks is the Dai Nam horse racecourse in southern Binh Duong province, being built by the Dai Nam JSC. The project will occupy an area of 60 ha at the Dai Nam Tourism Park, with a grandstand that can accommodate up to 60,000 people. It will also host dog racing, car racing, motorbike racing, water motorsports, and all-terrain vehicle racing. “No gambling will be permitted at the racecourse,” said Mr. Huynh Uy Dung, Chairman of the Dai Nam JSC. He hopes it will attract about 5 million visitors a year to the tourism park, up from 2 million now.

Recent rumors have it that the Dai Nam JSC broke ground without permission from local authorities. However, a representative from Dai Nam’s Public Relations Department said that “we have sufficient legal documents for construction to begin.” The company has now wrapped up preparations for a grand opening at the tourism park before the end of October.

In early August a joint venture between the Hanoi Tourist Corporation (Hanoitourist) and South Korea’s Global Consultant Network (GCN) began cooperating on the construction of a five-star complex in Hanoi’s Soc Son district after a ten-year delay, which will include a horse racecourse. The project will cover around 180 ha with capital of $500 million. According to Hanoitourist they are to ask the Hanoi People’s Committee for guidelines for carrying out the project.

In the latest news, South Korea’s G.O. Max has proposed building a horse racecourse complex in the northern province of Vinh Phuc, northwest of Hanoi, also after a ten-year delay. In 2007 the company planned to invest in a racecourse costing $570 million on an area of 400 ha but the project was not considered by local authorities due to limits on gambling and the absence of a legal framework.

Projects on hold

Many foreign investors have expressed an interest in the past about investing in horse racecourses but have been forced to postpone their projects as the Vietnamese Government continues to debate issuing regulations on gambling. 

In 2007, South Korea’s Vitco Company planned to build an international entertainment and racecourse project at the Binh Duong Industrial Service Urban Area Complex in southern Binh Duong province. The project was to have investment of $350 million on an area of 250 ha but was shelved three years ago as government approval failed to materialize.

Gambling on horse and dog racing have only previously been permitted in two projects: horse racing in Ho Chi Minh City and dog racing in nearby Ba Ria Vung Tau province. The horse racecourse was closed in 2011, however, after seven years of operation. The two courses were invested in by the Thien Ma Company and the Sport Entertainment Services Company.

Lawyers at the US’s Duane Morris law firm in Vietnam noted that even though a decree is still to come, investors can still find some helpful guidelines for any future investment plans in horse race gambling in Vietnam. While it remains unknown whether a decree will be issued, investors should not adopt a “wait and see” approach. Instead, they should be proactive in contacting government authorities to seek specific guidelines and have a thorough legal strategy to deal with the known and unknown regulatory obstacles.

According to Professor Ha Ton Vinh, a consultant to many gambling projects in Vietnam, this is a new type of business in Vietnam so many enterprises are keen to seize the opportunities and be the first on the scene when the legal framework is put in place. There will be challenges, however, and no one can be sure what the future holds.  

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