An American-style lottery in Vietnam?
Will Vietnamese businesses have to share the multi-billion dollar lottery market with foreign investors?
In August, a student became the first winner of the Mega 6/45 Lotto Jackpot Game worth VND203 million. This changed the face of the lottery industry, estimated to be worth over US$3 billion.
Just after one month of launching, Vietlott (Vietnam Computerised Lottery One Member Company Ltd) reportedly earned VND40.1 billion. However, the figure did not surprise analysts, who believe that lotteries, casinos and sports betting have great potential in Vietnam.
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Lotteries are expected to contribute VND26 trillion more to the state budget this year, a sharp increase of 48% compared with three years ago.
The initial achievements are so attractive that Vietlott decided to set up 800 points of sales in all districts and communes in Ho Chi Minh City in the first month and increase the number to 10,000 within the next five years.
Foreign investors have joined the lottery industry, which in the past was run by state-owned enterprises.
The foreign investor from Malaysia - Berjaya Corp Bhd (BCorp) and Berjaya Sports Toto Bhd (BToto) - and Vietnamese Vietlott have been granted a license to operate computerized lotteries throughout Vietnam.
The business cooperation contract between BCorp and Vietlott comprises provisions on the investment in technology, equipment software and computerized lottery in Vietnam.
After obtaining the investment license from the Hanoi Investment and Planning Department in early 2016, the exclusive lottery project was implemented by a subsidiary of BCorp – Berjaya Gia Thinh (Berjaya GTI).
Questions have been raised about the structure and the actual role of the businesses that get involved in the project, not only because of its high value, but also of the long-term duration of 18 years.
Berjaya GTI has a 51% stockholder equity belonging to BLV. Meanwhile, BLV is set up in Labuan with 80% stockholder equity belonging to BCorp and the other 20% to BToto.
Sources said that six months ago, in order to obtain the project, BCorp had to attend the auction where it had to compete with five other international lottery companies. The auction marked an important milestone in the history of Vietnam’s lottery industry as it opened the lottery market.
Vietlott, put under the management of the Ministry of Finance, was established in 2011 with VND500 billion in capital.
After five years of operation, it now has total assets of VND305 billion. Mega 6/45 lottery alone brought it VND49 billion in revenue in the first eight months of the year.
