Originally published on July 21, 2008
ISA-GUIDE (World Gaming Guide
Michael (‘Mike’) Aymong managed to get investment certificate to build USD 4.2-billion Asian Coast Development Ltd. casino & beach resort complex in Communist Vietnam — one of the fastest.
When asked how he managed to get an investment certificate to build the USD 4.2-billion Asian Coast Development Ltd. casino and beach resort complex in Communist Vietnam — one of the fastest-growing tourist destinations in Asia — Michael (‘Mike’) Aymong smiles and says: “Simple. You just have to want to try.”
The Toronto native now living in Vancouver then gives an analogy that any self-respecting Canuck would understand: “You gotta shoot with the puck if you want to score the goal.“
Well, maybe it wasn’t quite so simple. It was more than two years ago, while on a visit to Vietnam to help a friend scoping out a business venture, that Mr. Aymong, 43, chairman of Asian Coast Development Ltd., first realized the potential of the southeast Asian country to become the latest gambling Mecca in the region, a part of the world he describes as being seriously underserved when it comes to first-class casinos and related entertainment.
The inspiration came when he visited the Ho Tram Strip area of southern Vietnam, a gorgeous 2.2 kilometres of white-sand beach on the South China Sea, 80 kilometres southwest of Ho Chi Minh City (formerly Saigon).
„It was just an incredibly beautiful unspoilt beachfront waiting to be taken to greater heights; it was perfect for the type of luxury-style development that Asia needs,” says Mr. Aymong, a former executive in the Canadian telecom business who later moved on to the world of online gaming with Starnet Communications International Inc., later known as World Gaming PLC.
Mr. Aymong’s vision became reality in late May at the ground-breaking ceremony for the Ho Tram project. It’s a complex that will eventually house 9,000 luxury hotel rooms, along with a casino, restaurants, nightclubs, a Greg Norman-designed golf course and an aquatic park where tourists can swim with dolphins. There are plans for a theatre for a Cirque du Soleil-inspired entertainment show, or maybe even the real deal.
Phase One of the project, expected to open in 2010, includes most of the infrastructure as well as a five-star hotel with 1,100 rooms. The second stage — a four-star hotel with 1,300 rooms, a casino and 10 restaurants and nightclubs — is scheduled to open in 2011. The entire complex is expected to be completed within the next 10 years and include five resorts, an international conference centre and employ 14,000 people. The 169-hectare project is being designed by Steelman Partners, one of the biggest casino architecture firms in Las Vegas.
Mr. Aymong attributes winning the concession to his willingness to take the plunge and not being swayed by those who suggest that doing business in Communist Vietnam is a risky thing to do. “When people tell me I can’t do something, that’s when I go for it,” he says. And while the heavy hitters in the casino world have been focusing on other parts of Asia, like Macau and Singapore, he says going into a less-obvious market has its pluses. “Where else in the gambling world could you build something as a Canadian that’s this big?“ he asks. “You couldn’t go to Vegas and pull this off, but going into an emerging market is a different thing.“
Mr. Aymong clearly thinks big. He says the development has the potential to be the “next Macau“ when it comes to gambling. That is a bit of a stretch; the former Portuguese colony for 500 years, handed back to China in 1999 and now a Special Administrative Region, in 2006 surpassed Las Vegas as the world’s biggest casino market, taking in USD 6.95-billion that year compared to USD 6.6-billion for the original Sin City.
But it’s easy to see why Mr. Aymong is so turned on to the idea of building a casino in Vietnam. According to a new report from PricewaterhouseCoopers, Asia-Pacific is the world’s fastest-growing gambling region, with revenues set to hit USD 37.2-billion by 2012 (compared with USD 18.3-billion in 2007). Of that, USD 34.4-billion will come from casino-based gambling, up from USD 16.5-billion in 2007 (the rest comes from online sports betting and online nonsports gaming). Even in a global gaming market that is expected to grow to USD 155.7-billion (from USD 113.9-billion) over the same period, that’s a phenomenal figure.
Much of this growth in Asia is being driven by resort casinos in Macau, Phillipines, Singapore (which opens its first casinos in 2011) and Malaysia (home to Casino de Genting, one of the largest casinos in the world).
Vietnam is so far a small player in the Asian casino game. Figures from the PricewaterhouseCoopers study, which do not incorporate projected figures for Mr. Aymong’s development, show revenue growing to USD 104-million by 2012 from a USD 65-million this year. But Vietnam stands out as “a perfect place to take advantage of growth of casino gaming in Asia,“ says Mr. Aymong, thanks to its emergence as a top tourist destination, its proximity to a population of 1.5 billion Asians located within a four or five hour flight of Ho Chi Minh and a government that is ready and willing to negotiate for bringing high-roller gambling to Vietnam. Or at least bringing in the high-roller tourists. The Asian Coast casinos will be off-limits to locals.
Mr. Aymong says he is “crossing his fingers“ that this policy will one day be loosened, but it is not something he has brought up with officials. “I don’t want to get into the politics of this yet,“ he says.
Still, getting such a massive casino project off the ground — one that is expected to bring in USD 600-million in gross revenue in 2012, the first full year of operation — is no easy task. Mr. Aymong admits that it is of a scale easily befitting a heavy-hitter in the gambling world, say, Steve Wynn of Wynn Resorts or Stanley Ho, who for generations held the monopoly on gambling in Macau, the only place in China where gambling is legalized.
To pave the way, Mr. Aymong sought out those who could help make the necessary introductions with key people in Vietnam’s Communist regime. His advisory board includes former Canadian Prime Minister Jean Chretien, who, as a counsel for law firm Heenan Blaikie, has been building a career as a go-to person when it comes to helping Canadians invest in Asia, especially Vietnam.
Then there was the matter of finding a financial backer, which eventually came in the form of Phil Falcone of New York-based Harbinger Capital. Mr. Falcone, one of the top hedge fund managers in the world, is the main player among hedge funds and other investors that have a 26% stake in Asian Coast Development.
The Asian Coast casinos are to be strictly a tourist-only proposition when it comes to gambling customers, but Mr. Aymong is looking to attract the millions of mostly Asian gaming aficionados hungry for a posh casino palace in which to place their bets.
Gambling is a fairly ingrained part of Asian culture, with its fixation on fortune and luck. But until recently, much of it has been done behind closed doors in smoky dark rooms that were anything but posh. Even in places where gambling is legal, casinos such as Stanley Ho’s Lisboa in Macau give the impression that gambling is a serious business.
What has become apparent over the last few years, at least to casino developers such as Mr. Aymong, is that if you build the luxury casinos, the high rollers will come and they’ll come from all over Asia. Mr. Aymong says that based on his company’s research, he’s banking on about half of the visitors hailing from China, while Taiwan, Hong Kong, Japan and Korea will also be important sources. All these places are within a short flight of Ho Chi Minh City.
And what does Vietnam offer that Macau doesn’t? For starters, says Mr. Aymong, Macau’s Special Administrative Region is a tiny spot at the mouth of the Pearl River Delta, near Hong Kong, but still far away from mainland China. And apart from visiting Macau’s quaint, lovingly restored old city square, where the street signs are still in Portuguese and the façade of St. Paul’s Cathedral looms over central Macau, most visitors don’t stick around for much more than a day. And they generally don’t bring the family.
My Aymong’s vision for his Vietnam resort has visitors staying between four and seven days, with a good number bringing the spouse and kids. That’s why Mr. Aymong has upped the ante by factoring in the golf course, beach and aquatic park as part of the project. “Our research has shown that by having these types of facilities, customer will spend at least 50% more money than if we didn’t have these things,“ he says. “Vietnam is quickly going from a place once visited only by backpackers to attracting the types of people who want the four-star or five-star treatment, whether or not they want to gamble.“
In fact, Vietnam has been identified by the New York Times as one of 53 hot spots for tourists in 2008, with golf cited as one of the main attractions for international visitors. And according to the World Travel and Tourism Council, Vietnam has moved up to fourth from sixth place in its ranking of the world’s fastest-growing tourist destinations. Last year, it had 4.2 million foreign visitors, 16% more than in 2006, and the figures for the first four months of 2008, with 1.7 million visitors, are tracking the same way.
Mr. Aymong says that many of these visitors to Vietnam are from China. “With foreign travel opening up to the Chinese, there’s a real hunger to go out and see a bit of the world.“ The proximity of Vietnam, and the fact that it is relatively unspoilt and inexpensive compared with places like Singapore, for example, makes it a natural destination. If they bring along the money to play in the casinos, so much the better.
Looking into the future of casinos in Asia, an entrepreneurial gambler like Mr. Aymong figures there is “such an undercapacity“ of legal gaming places in Asian countries, “it could take as much as 20 years to meet the current and expected demand.“ And if Mr. Aymong — helped a bit by Lady Luck — has his way, his Ho Tram project will be at the centre of it all.