Adverse changes in the regulatory environment in Vietnam have prompted Success Dragon to terminate its Greyhound operation agreements in Vietnam.
In an announcement to the Hong Kong Stock Exchange, Success Dragon estimated losses of HK$111 million resulting from “operating loss incurred for approximately HK$40 million; one off impairment loss on the property, plant and equipment of approximately HK$70 million.”
Success Dragon says the restrictions by the recently enacted Decree No. 06/2017, which includes a cap on betting spend per-player-per-day; the inability for international simulcast; and limitations on expansion off-track betting outlets were among the arguments for the termination.
Maximum bet per player per day is set at approximately HK$340 under the Decree, diminishing revenue generation provisions, the company argues.
The simulcast of international races is also not allowed in the Vietnamese regulatory framework and as such the company would depend on overseas races.
Success Dragon further added that it would not be able to meet expected revenue estimations due to the strict criteria on new off track betting outlets, including prime locations that restrict ability for expanding retail shops business.
Given the adverse regulatory climate,“the prospect of ramping up business volume and revenue will not be able to reach a satisfactory level to recover operating cost and repay start-up cost and expenses borne by the Group,” Success Dragon told the Stock Exchange.
With the pull out the company has terminated agreements it had for equipment with Xuan Thanh Greyhound Racing, Thien Ma – Madagui Racing and with Sports and Entertainment for outsourced management services and equipment.