Vietnam _Horse Race Betting in Vietnam: Don’t Back the Wrong Horse

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Horse Race Betting in Vietnam: Don’t Back the Wrong Horse
Oliver Massmann
Investors wishing to invest in horse race betting projects in Vietnam may find themselves
in dead end if they do not equip themselves with the appropriate tools to tackle legal
challenges in this emerging market
Even though horse race betting was allowed in two pilot projects in Phu Tho (1998) and Vung
Tau (2000), there has been no concrete legal framework in place to address the licensing and
operation of the horse race betting projects.
In 2010, the Government of Vietnam decided to draft a decree, which is the most superior
executive regulation, to formally legalize horse race betting in Vietnam and provide criteria for
businesses to invest and operate in this field. This is an effort of the government to maintain the
balance between the economic benefits of these hugely profitable businesses and the need to
have sufficient governmental control to eliminate the “social evils” which may associate with
these projects. The Standing Committee of the National Assembly, which is the legislative body
of Vietnam, approved the general policy of this decree; however, the Standing Committee also
asked for an empirical study on the pros and cons of horse race betting, together with other forms
of betting such as soccer or greyhound race betting. In a recent regular session of the
Government in 2015, the Prime Minister instructed the Ministry of Finance to continue working
on the draft, based on recommendations from other branches and the National Assembly. There
has been no time limit fixed for the issuance of this decree. One of the reasons why there has
been significant delay was because of the ambitious target of this decree, which aims to govern
not only horse race and greyhound race betting but also soccer betting. Soccer betting has been a
sensitive topic in Vietnam and there is a wide prejudice that it associates with crimes,
bankruptcy, sports cheats, and money laundering. To speed up the process, the government is
considering separating soccer betting from this regulation and focusing on horse and greyhound
race betting only.
Even though the latest draft of the decree is not final, investors can find some helpful guidelines
for their future investments in horse race betting in Vietnam. In particular, the draft proposes
that an entity can only do horse betting once they have received an investment certificate (which,
for a foreign invested company also serves as a certificate of incorporation) and a certificate for
satisfaction of business conditions. The Prime Minister will decide the issuance of the

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investment certificate and such certificate will only be granted for horse race betting projects
with minimum investment capital of 1 thousand billion Vietnamese Dongs, or equivalent to 459
million United States Dollars. The project must be put into operation within four years from the
date of issuance of the investment certificate. Meanwhile, the Ministry of Finance will grant the
certificate for satisfaction of business conditions to entities with adequate financial resources,
business plans and an appropriate betting and racing bylaws.
While the decree allows Vietnamese players to participate, it limits the maximum bet to one
million VND (or less than fifty USD) a day and provides that the minimum bet is ten thousand
VND (or less than fifty cents). There should be no more than three races in a week at each
location. The minimum rebate shall be 65% of the revenues from selling wagering tickets. In
terms of labor, the jockeys must be employees of the horse race operators.
While it remains unknown whether the decree on horse race betting will be issued, investors
should not play the “wait and see” game. Instead, they should be proactive in approaching the
government authorities for specific guidelines and having a thorough legal strategy to deal with
the known and unknown regulatory obstacles. They may also consider setting up a small entity
to carry out a pilot project, which is generally subject to lower regulatory thresholds than a
regular project, to test the water and set up the basic infrastructure necessary for future
investments. These plans cannot be successful if the investors do not have proper legal and
financial advice.
The horse race betting market in Vietnam is a difficult race to thrive in and only the most well
prepared investors can reap the huge rewards.
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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if
you have any questions on the above. Oliver Massmann is the General Director of Duane Morris
Vietnam LLC.
Thank you very much!