| HO CHI MINH CITY/HONG KONG
HO CHI MINH CITY/HONG KONG Nguyen Van Tuon seems unconcerned that his business driving Vietnamese gamblers across the border to Cambodian casinos is under threat.
"I'll believe it when I see it," said Tuon, waiting in the rain in the suburbs of Ho Chi Minh City for his first fare of the day, when asked about the prospect that Vietnam could soon allow its citizens to gamble at home.
"It'll make everyone even more in debt and create more social problems, so I can't see it happening."
His confidence may be misplaced. Despite its rigid stance on social order, the communist government and Vietnam's top tycoons are exploring ways to profit from what's currently illegal, while creating jobs and boosting tourism and tax revenue.
The government could soon legalize domestic casinos to lure billions of dollars of investment from major gaming firms, according to two sources with close knowledge of affairs of the National Assembly, which is due to debate the issue.
The sources, who requested anonymity, said the government had already undertaken research and was planning a pilot project that allows local punters to gamble, starting at a yet-to-be built casino on Van Don island near China.
Vietnamese are passionate gamblers, from clandestine card games to bets on European soccer with underground bookies, but the handful of casinos operating in the country now are strictly foreigners-only.
A change in legislation could make Vietnam an attractive bet for big gaming companies such as Las Vegas Sands, Genting Bhd, Nagacorp and Penn National Gaming, which have quietly expressed interest, should locals be allowed to take part.
The appeal is much to do with Vietnam's demographics and its location, just a few hours from many Asian capitals and within easy reach of wealthy Chinese, who provide the lion's share of gaming revenue, Vietnam also has appealing demographics.
Two-thirds of the country's fast-growing population of 90 million are under the age of 30, and it has a consumer middle class that's expected to double by 2020, according to a recent report by the Boston Consulting Group.
Industry executives say that if it does loosen laws on gambling Vietnam could become a regional casino hub, with the potential to make annual gaming revenues of $3 billion. That's about half of Singapore's 2013 revenue but 10 times that of Cambodia and on par with the Philippines and South Korea, according to official and company data.
Augustine Ha Ton Vinh, an academic who says he is advising the government on liberalizing Vietnam's gaming industry, estimates the country is losing as much as $800 million a year in tax revenue from Vietnamese who gamble in Cambodia.
"The government is looking for investors and partners to start the Van Don project," he said on the sidelines of a forum in Hong Kong. "Since 2003, Vietnam has allowed foreign investors to operate gaming parlors with rewards in hotels. Chinese and Taiwanese are regular players."
The extra revenue would be a welcome boost as the economy, once seen as Asia's new emerging market star, is underperforming with growth of about 5 percent, while high levels of bad debt have hurt the retail sector and regional competition for foreign investment is heating up.
The government has proposed a draft law to the National Assembly on casinos that would require foreign gaming companies with a minimum of 10 years experience in the industry to commit to investments of no less than $4 billion.
The planned Van Don Casino, where the pilot project could be implemented, is highly ambitious, valued according to local government at $7.5 billion, a sizeable sum that suggests its target customer is not just the foreign punter.
The project is being spearheaded by Vietnamese billionaire Dao Hong Tuyen and a barely known U.S. firm, ISC Corporation, which plans to build casinos, marinas, convention center and golf and tennis clubs on the island.
If the pilot scheme is put to a house vote, it is almost certain to pass given the communist party's control of the legislature.
Vietnam's record with casinos has been patchy, however, plagued by delays, canceled contracts, poor infrastructure and funding problems.
Envisioned as Vietnam's landmark casino project, Ho Tram, about two hours by car from the commercial capital Ho Chi Minh City, sits on 164-hectares of pristine coastline. Its operator, Vancouver-based Asian Coast Development Limited (ACDL), has a license to invest $4.2 billion in a luxury resort casino with 541 rooms, 90 card tables and 600 slot machines.
But MGM Resorts terminated its management contract prior to the opening in 2013 and Pinnacle Entertainment, which has a stake in ACDL, was forced to write off $25 million due to delays.
The second of Vietnam's two big casinos, at South Hoi An is also stalled, with asset management firm VinaCapital trying to resuscitate a $4 billion project, but yet to name an international partner after Genting pulled out in 2012.
Five smaller ventures are enjoying some success.
The Lao Cai Casino, bordering China's southern Yunnan province, operates just eight gaming tables and 34 hotel rooms and caters solely for Chinese punters.
Ben Reichel, executive director of Donaco, which runs the resort, said junket operators on the Chinese mainland extend credit to its high-rollers, who bring to the baccarat tables a minimum of 600,000 yuan ($99,000) each.
But while smaller investments can be very profitable, their owners say larger properties that require significant capital expenditure are a more difficult prospect.
"Returns are hard to generate in a short space of time, if at all, in the absence of proximity to market and local play on a large scale." said Mike Bolsover, chief executive of Silver Heritage, which runs a six gaming table casino 40 km (25 miles) outside the capital Hanoi.
Bigger casino players say they are watching Vietnam closely, but won't be betting on a change in law just yet.
U.S. billionaire Sheldon Adelson, CEO of Las Vegas Sands, visited Vietnam three times in the past two years with a view to building casinos in Hanoi and Ho Chi Minh City, but only if the conditions were right.
MGM Resorts, which pulled out of the Ho Tram venture, was monitoring Vietnam in case "a future development opportunity presents itself", while a Genting executive said it would not invest in any Vietnamese casino unless laws prohibiting locals from taking part were eased.
Timothy McNally, chairman of NagaCorp, said his firm would welcome any move to legalize gambling in what was a "very significant country".
For some Vietnamese punters, who represent half of the total visitors to Cambodia's casinos, a change in the law seems a more likely prospect than a change in their luck.
"It'll be a lot more convenient, it'll save me time and money," said one gambler, munching on a baguette and sipping sweet coffee while waiting for his car ride to Cambodia. "It doesn't matter where I gamble, I always seem to lose anyway." ($1 = 21,105 Vietnam dong, 6.0600 Chinese yuan)
(Reporting by Nguyen Phuong Linh in Hanoi, Farah Master in Hong Kong and Martin Petty in Ho Chi Minh City; Editing by Alex Richardson)