OPTIMIZING STATE REVENUE THROUGH REGULATORY REFORM IN VIETNAM’S GAMING AND LOTTERY SECTOR

This article examines the determinants of state budget revenue from the prize-winning gaming sector in Vietnam, which encompasses traditional and computerized lotteries, casinos, sports betting, and electronic games for foreigners. As emerging markets actively seek to diversify their fiscal streams, the gaming sector presents a significant yet complex opportunity. Historically dominated by traditional lotteries, the Vietnamese gaming market has undergone a structural transformation toward controlled liberalization, designed to capture capital that previously flowed to informal markets. Utilizing a provincial panel data approach, this study analyzes how regulatory shifts and economic factors influence tax receipts across 63 provinces over the period from 2015 to 2025. The empirical analysis employs both Fixed Effects (FE) and Random Effects (RE) models to test the impact of specific drivers, including gross regional domestic product (GRDP), regulatory changes, and geographic market competition. The results provide strong evidence that income elasticity is a primary driver of sector growth, with a 1% increase in GRDP per capita associated with a 0.654% increase in gaming revenue within the preferred Fixed Effects model. Furthermore, regulatory liberalization, such as the introduction of modern lottery formats and casino pilots, yields a quantifiable fiscal benefit by increasing localized revenue. Conversely, increased geographic competition negatively impacts provincial gaming revenue, causing revenue attrition. Ultimately, optimizing state revenue requires a delicate balance between market liberalization and social cost management. The study concludes by proposing strategic policy recommendations, including product diversification, harmonized tax structures, geographic zoning optimization, and digital framework integration, to enhance long-term fiscal yields.