A little further down the coast, construction of the MGM Grand Ho Tram resort-casino project in Vietnam hit a snag after Vietnamese banks suspended funding of a $175m credit facility. A Canadian firm, Asian Coast Development Ltd. (ACDL), is behind the Ho Tram project, in conjunction with US casino outfits MGM Resorts International and Pinnacle Entertainment. Pinnacle owns a 26% stake of ACDL. The snafu came to light on Friday when Pinnacle filed its quarterly earnings report, which included a caution that Pinnacle stood to lose its entire $109m investment in the project if ACDL’s credit facility was not restored and additional funding was not secured.

The banks chose to suspend the credit facility after ACDL reported it had defaulted on a contract with the Ba Ria-Vung Tau provincial government that required the project to meet certain construction deadlines. There are also issues regarding the project’s gaming license, such as the government’s insistence that locals not be allowed to gamble at the casino and unanswered questions regarding the government’s stance on junket operators, both of which are seen as necessary for the project to be viable. For the moment, construction on the project continues, but in addition to the need to restore the credit facility, ACDL is in dire need of a $35m working capital loan, and Pinnacle says it is "currently unclear” whether this sum will be sufficient to ensure the project’s first phase can open on schedule by the end of Q1 2013. Pinnacle shares have lost 8% of their value since the news broke.
It’s unclear whether the Ho Tram debacle will have any effect on the dwindling number of foreign firms considering investing in Vietnamese casino projects. Some companies, such as Las Vegas Sands and Genting, have balked due to the foreigner-only entry restrictions. The proposed Phu Quoc Island casino zone has seen interest from 11 foreign firms, but all eventually walked away from the project. However, TTRWeekly reported that South Korea’s Zeta Plan and Investment Company has expressed interest in building a $4b casino near the Phong Nha-Ke Bang National Park in central Vietnam, signing a memorandum of understanding with Quang Binh provincial authorities in 2012.

The eventual plan was/is for the region to host up to 17 gaming venues, although the response from international developers has so far been tepid. Ria Novosti didn’t indicate which company had actually broken ground, but it’s assumed to be one of three Russian firms – Concept, Diamond Fortune or the Royal Time Group – which had already confirmed their interest in the region.