Vietnam’s gamble: Whether or not to legalise betting
Underground football betting is thriving, but would the social costs of legalising it outweigh the economic benefits?
Hung folds his arms on the table and looks squarely at a companion. Then, in mid-conversation, his eyes wander towards the green glow of nearby television screens.
It is Sunday night in Vietnam’s capital, and about a dozen Vietnamese are crammed into a narrow bar, drinking beer and watching English Premier League (EPL) football. On one screen, Liverpool leads Norwich 2-1. Another shows Vietnamese commentators dissecting the day’s other matches.
No one is openly exchanging money here, but Hung says men often gamble on EPL matches in the bar’s upstairs rooms, using their laptop computers; bets are placed in real-time through overseas online gambling accounts.
Hung, a 33-year-old restaurateur whose name has been changed in this article, previously worked for five years here as a football bookie for a Macau-based website. “All the sports betting in this country is happening online,” he says flatly, chewing a cashew nut and washing it down with a swig from his bottle. “Casino gambling is only for rich people, but anyone can bet on sports.”
European football matches are an obsession for legions of men across Vietnam, a country of 90 million with a young demographic profile. And according to gaming industry experts, a huge – albeit unknown – number of them wager on football every week, despite the fact that sports betting is illegal under Vietnamese law.
In remote provinces and some cities, some bets are arranged entirely by phone or in person, but experts say online football betting accounts for the vast majority of all sports bets across the nation. Most transactions, they say, occur on foreign-registered websites that hire local bookies like Hung to sign up clients and collect payments. The profits are said to be either hand-carried out of the country, in cash, often into Cambodia, or sent electronically through an elaborate network of money launderers and shell companies that evade Vietnam’s strict banking laws on outgoing wire transfers.
Clients who cannot or refuse to pay their debts allegedly face intimidation and, in some cases, violence, at the hands of local thugs and gangsters. “There are groups of guys whose main job is to collect the company’s money,” explains Hung, echoing comments by other gambling experts.
He was not responsible for enforcing payments when he was a bookie, he is quick to add, but he did see the system in action. His grisly descriptions of gangsters’ alleged violent acts could not be independently verified. But one of Vietnam’s state-controlled newspapers, An Ninh Thu Do, reports ominously that the football betting industry here is governed by “jungle law” and that serious debts often end in “bloody scenes”.
Gambling experts say they are not aware of any independent estimates of the number of people or the amount of money involved in Vietnam’s online sports betting industry.
The Vietnamese news media, however, has quoted the Ministry of Public Security as saying that from 2000 to 2009, authorities arrested 8,558 sports gamblers and confiscated US dollars and Vietnamese dong from them worth a total of nearly $95m. And in a sign of football betting’s massive popularity here, one of Vietnam’s highest-profile scandals revolved around a senior transport official who was arrested, in 2006, on charges of gambling $1.8m in public funds on European football matches.
Stephen J Karoul, a US-based international casino marketing consultant who has advisory contracts in Vietnam’s regulated casino industry, says the underground sports betting industry here is likely worth “in the hundreds of millions” of dollars.
He adds that in Vietnam, Laos, Cambodia and other mainland Southeast Asian countries, casual sports betting is largely accessible to everyone, even the poor, as opposed to casino gambling, which is often open only to foreigners. Some Vietnamese citizens travel to neighbouring Cambodia to gamble in casinos, and Karoul says there are unconfirmed rumours that others purchase fake foreign passports to gamble domestically. But compared with the casino industry, he says, sports betting has “a much larger client base”.
Authoritarian Vietnam is wary of the internet and its potential influence.
The Paris-based advocacy group Reporters Without Borders ranked the one-party state as the seventh-worst nation on earth for press freedom, just behind Iran.
Facebook and other sites, including the BBC, are sporadically blocked here, and dissident bloggers are regularly imprisoned for challenging the government’s authority.
Vietnam’s lawmaking national assembly passed several laws that critics say are designed to further tighten control over internet use, perhaps out of a fear that the internet could catalyse organised political dissent here as it did in parts of the Middle East and North Africa. In 2013, for example, a vaguely worded new decree effectively criminalised the sharing on Facebook of press reports that the government deems sensitive.
Yet in spite of those controls, online activity thrives in Vietnam. The country’s internet penetration rate of about 35 percent of the population is higher than that in both Thailand and Indonesia, according to the blog Tech in Asia.
Although Facebook is often blocked, it is immensely popular, especially among the urban middle class. There is a growing network of high-tech entrepreneurs in Hanoi and Ho Chi Minh City, the country’s business capital. And Vietnamese officials say that online sports betting is so widespread here, at least among men, that international gaming companies run Vietnamese-language advertisements during English Premier League matches.
Do Phu Kien, a former international editor at Bong Da, Vietnam’s most popular football newspaper, says betting on the English and other European leagues has been common here for about 20 years, and that online betting began to spread virally around 2002.
He estimates that until recently, the website ibet888.net processed about 90 percent of all bets, and that the percentage is now about 60 percent. Other popular sites mentioned by gambling experts in Vietnam include Sobet.com and 888.com. No gambling website administrators could be reached directly for comment. A public-relations firm that represents 888.com, reached by phone in the United Kingdom, referred an inquiry back to the company.
According to Kien, online football betting in Vietnam used to be conducted mainly on credit (Karoul, the casino consultant, says a typical Vietnamese gambler might start betting online with about $100 or $200), but some gaming websites have lately created systems in which clients must deposit funds in an offshore account before they can begin placing bets.
This new method has helped to make the industry safer, because gamblers cannot get in over their heads as easily, as well as more reliable, because winners are now more confident that they will actually get paid after a big win, Kien says. But loan sharks still find ways of extending credit to gamblers.
The system is said to be linked to organised crime syndicates. Bookies reportedly outsource the actual work of debt collection to hired thugs. “And some of these people are not the nicest people,” Karoul says of the latter. Intimidation tactics, according to Kien, include showing up unannounced at a gambler’s office, or even throwing a bag of faeces at his house.
Hired gangsters “mess with your head – there are many ways to scare you”, Kien explains during an interview in a Hanoi shopping mall. A persistent failure to pay, he claims, can lead to physical abuse or even murder.
The government occasionally stages crackdowns on the sports betting industry, typically in the lead-up to major international football events, according to several gambling experts.
But experts say occasional raids do not have much of an effect on the industry, which allegedly consists of a complex underworld of bookies, middle-men, money launderers and overseas managers in Macau, Hong Kong, Cambodia and the Philippines. “Even if the government wanted to ban it, they couldn’t,” says a commentator on Nha Cai Tot Nhat, a Vietnamese-language online forum and betting website. “So it just watches a huge amount of foreign currency leak overseas, and potential tax revenue is lost.”
Some Vietnamese officials are now proposing bringing the industry out of the shadows.
In April 2014, for example, the national assembly’s standing committee proposed a draft decree that would allow state-owned Vietnamese companies to offer horse racing, dog racing and football betting, so long as the maximum daily bet per person did not exceed one million dong, or about $47. Gambling experts say while that proposed cap is unrealistically low, a binding decree could feasibly come into effect at some point in the next few years.
International gaming operators in Vietnam are not lobbying for a legal sports betting industry; their main focus is on changing an existing law that bars Vietnamese from gambling in local casinos. But a foreign casino executive who works in Vietnam says he recognises that formalising sports betting here could hold big economic potential. “It would be very successful because of the enjoyment that the local Vietnamese have around betting on sports teams,” he says when reached on a Hong Kong mobile phone.
Legal horse racing and off-track betting parlours in Hong Kong offer an interesting example of how sports gambling has been successfully formalised elsewhere in the Asia Pacific region, the executive adds. “But in Vietnam,” he cautions, “they’re very slow to introduce wagering in situations where it’s not proven that it’s not harmful to the common good.”
Indeed, there has been spirited debate in Vietnam about the impact gambling – on sports and anything else – would have on society if it were legalised for locals.
The government officially considers gambling a “social evil”, alongside drugs and prostitution. Kien, the former newspaper editor, says there is a growing recognition among senior officials that formalised sports betting could be a tax windfall – an increasingly attractive prospect at a time when economic growth has slowed to around 5 percent from more than 7 percent during Vietnam’s economic boom of the mid-2000s. Yet officials, he says, do not want to be personally responsible for passing such a law, out of fear they would be publicly vilified if it led to negative social consequences.
As the debate rages, football bets continue to roll in across Vietnamese cities and rural provinces, says Hung, the former Hanoi bookie.
He has officially left the business, he insists, but he still subscribes to a Vietnamese-language online service that publishes daily point spreads for dozens of European football matches. On a recent evening at a Hanoi cafe, he opened his laptop and saw that England’s Aston Villa were favourites to beat Tottenham Hotspur in a match that evening.
Hung shrugged and said he was no longer excited by the prospect of gambling.
But he admitted that, as a bookie, he often felt the urge to place his own wagers alongside those of his clients. “I made a lot and lost a lot,” he says casually, in between drags on a cigarette. His net loss was the equivalent of around $35,000 – the amount an average Vietnamese worker earns in about 20 years. But at least he had enough savings to cover his debts. Some of his clients were not as lucky.
This article first appeared in the June 2014 issue of the Al Jazeera Magazine.