Tin Pháp lý
Vietnamese horse betting rules against the norm

9 February 2017
Vietnam Investment Review

On January 24, Prime Minister Nguyen Xuan Phuc signed Decree No.06/2017/ND-CP, legalising horse, dog racing and international football betting. Effective from March 31, the new decree authorises horse and greyhound racing as well as international football betting businesses.

Explicitly maintaining that betting is a conditional business activity requiring heavy control and oversight by state management agencies, the decree delineates the terms of operation both for bettors and betting agencies as well the betting amounts—as is common practice all over the world. Nevertheless, it might be interesting to compare Vietnamese betting regulations with those of the largest horse and greyhound gambling nations, the UK and the US.

Regulatory authority

Legal control and oversight is indubitably necessary over gambling operations where substantial amounts of money change hands almost at the drop of a hat. Perhaps the first area of importance is the regulatory authority itself.

In Vietnam, according to the new decree, oversight, the granting and revocation of licences, and inspections are to be carried by a multitude of ministries. Under the primacy of the Ministry of Finance, a host of other authorities ranging from the Ministry of Culture, Sports and Tourism, the Ministry of Planning and Investment to local authorities will be involved to varying degrees as of yet unclarified by legal instruments.

In the UK and the US, where gambling and betting have a longer legislative history, separate commissions have been put in place for the task: starting with the Horserace Betting Levy Board, a statutory body established in 1961, and complemented by the Gambling Commission (set up by the Gambling Act 2005), there is ample centralised oversight within the UK.

In the US, while the sports aspects of horse racing are generally managed under the directions of the National Thoroughbred Racing Association (to ensure conformity to uniform rules and practices), on and off-track betting was subjected to each states’ discretion, leading to varying regulations: gambling and race betting may be straight-out illegal in certain states, while in others wholly different rules apply—leading to a whole range of difficulties with cross-border betting that was authorised by the Interstate Horseracing Act 1978 and was apparently made illegal by the Wire Act 1961, which was not once enforced by the US Department of Justice.

Regardless of this saucy controversy in US law, horse racing as a sport and as a gambling business have clear-cut authorities providing licences and oversight both in the UK and the US, while the new decree in Vietnam shows little effort at filling the lines and fine-tuning bureaucratic operating procedures.

Betting agents

The business model for betting and gambling stands at the heart of the industry, determining the number of competitors and the rules of the game. While it is generally accepted that gambling businesses need to secure adequate licensing, the wheres and hows—and perhaps most importantly the how-muhces—are altogether different in the three countries.

While the exact matrix of the contributions of each government body are vague in Vietnam (even in terms of licensing), the new decree provides ample and clear hard criteria for eligible applicants. The minimum investment capital for horse racing and football betting businesses will be VND1 trillion (more than $44 million) each, while greyhound racing will be VND300 billion ($13.227 million).

While other licensing considerations have yet to be published, it would be educational to catch at least a glimpse into the inter-ministerial weighing of public and social goods and the ranking of domestic and foreign applicants—after all, an explicit objective of the whole decree is to lure in more foreign direct investment (FDI).

Seemingly quite draconic, licences can be revoked by the Ministry of Finance on a rather short notice of 10 days in case the agency slips up during one of the regular inspections. Less drastic offenses, such as providing insufficient or inaccurate information to customers and clients, can fetch fines of VND5-10 million ($220-440).

Money laundering, a key criminal offense associated to betting and gambling, will draw fines of VND50-100 million ($2,200-4,400). More serious violations to betting promotions may be fined for VND180-200 million ($7,940-8,820).

The betting business on the UK allows for a virtually single-player experience: until mid-2018 Betfred (The Tote) holds the exclusive licence to offer pool betting in respect of Great Britain horse racing. This means that those interested in a piece of the horse betting business have to be licensed by Betfred and abide by its rules.

In addition, bookmakers and Betfred alike are subject to paying a statutory levy to the Horseracing Betting Levy Board, to fund its work to improve the equine sport. Racecourse owners interested in running a betting business need to apply for a licence from Betfred and pay an annual licence fee (varying for remote and non-remote licences).

Pool betting in the US is licensed by state authorities and is more open for private enterprises as the scene features a Tote overlord. Despite the legal grey area surrounding interstate electronic wagering, online gambling proliferates.

Bettors and prizes

Last but not least, customers and the full description of services on offer might show differences as the Vietnamese authorities are determined to keep sports betting as a light-hearted pastime and not a means of living. This can be seen in the age restriction of customers: 21 years, which is higher than the actual age of adulthood. Similarly, betting is limited to a maximum of VND1 million ($44), limiting it as a career option.

Similarly, the UK in the Gambling Act 2005 sets the minimum age of bettors at 18, despite qualms that the legal age of procreation as well as driving a car falls under this (16 and 17, respectively). Encouraging children and young persons from trying their luck through means of direct invitation or advertisement was explicitly banned, in a spirit similar to Vietnam’s banning betting retail venues within 500 metres of schools or children’s parks.

On the other hand, neither the UK nor the US decided to introduce minimum or maximum wagers and left it to the discretion of Betfred and other betting agents to set their own limitations. Betfred, for instance, currently has a maximum payout of GBP500,000 but no limit on bets. Most US betting companies, on the other hand, have no maximum payout ratio: the winnings ride entirely on the size of the pool.

The ins and outs of pool betting

Also known as Tote betting or Pari-Mutuel betting, pool betting does not offer fixed odds or payouts. This is because all stakes are pooled (totalled up) and after deducting a certain percentage for the house (the Totalisator, hence the term Tote), the remainder is distributed amongst the winners according to their initial stakes.

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