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Thailand approaches final step towards casino legalisation

| By Nick Brown
Thailand edges closer to approving casino regulation with the aim of attracting affluent tourists to the country.

The move towards regulated casino in Thailand follows a vote on Thursday (28 March) at the nation’s 500-member house of representatives.

In Thursday’s vote, a total of 253 out of 257 lawmakers present voted to approve a proposal recommending the legalisation of casino in large entertainment complexes. The plan will now be forwarded to the cabinet for final approval.

Prime Minister Srettha Thavisin has thrown his full support behind the move, highlighting the net benefits that attracting foreign investment to Thailand will bring.

“The entertainment complexes will enhance the country’s tourism industry,” Srettha announced on X. “In the past, we have wasted enough time and opportunity. The government will reclaim the lost time and turn it into an economic opportunity for the country and its citizens.”

Most types of betting are currently illegal in Thailand, with a majority Buddhist and conservative society.

The opening of casinos, however, will be in line with its recent embrace of a more liberal landscape to revive its tourism industry following the pandemic.

What’s in Thailand’s proposal?

The study was commissioned by Thailand’s parliament in 2023. Its aim was to examine the net benefits from regulating casino in large entertainment complexes.

A regulated market is seen as a way of both generating tourism revenue but also combatting the prevalence of illegal gambling. Thailand also currently faces significant “leakage” from the local economy. As it stands, players regularly visit border casinos in neighbouring countries, such as Cambodia, Vietnam, Myanmar and Laos.

The study also estimates that Thailand can lift tourism revenue by close to $12bn. This will see casinos being integrated into entertainment complexes, or integrated resorts. The building of such destinations will also greatly contribute to regional revenues, as well as reducing unemployment.

The proposal also suggests a 17% tax on gross gaming revenue. This would make Thailand one of the lowest tax regimes in the region. Licence duration is also recommended to be an initial 20 years, which will be renewable every five years.

Finally, larger casino complexes will also be required to invest a minimum of $2.7bn in the country to receive approval.

Experts expect Thailand casino approval “within three years”

As has been covered previously in iGB, industry experts currently expect integrated resort (IR) approval within three years. The likes of MGM, Las Vegas Sands and Hard Rock Asia are all expected to be in the queue.

A previous parliamentary study of casinos released in January 2023 proposed up to five “entertainment complexes”. This would be similar to IRs in Singapore and Macau.

Primarily aiming to generate tax revenue, complexes would feature casinos, hotels, shopping, convention facilities and other amenities. Of course, this will depend on how Thailand seeks to regulate the market, as well as foreign gaming operators’ willingness to partner with Thai companies.

Commenting in an interview with iGB in September 2023, Bangkok-based Destination Capital CEO James Kaplan said Thailand will do “it”, but the question is what the “it” will look like.

In Kaplan’s view, the current Thai legalisation effort has a high probability of succeeding – with previous attempts failing to gain traction. “The key difference is we live in different times,” Bangkok-based Kaplan said in 2023. “Public debt is now 58% of GDP. Government needs to raise revenue to pay this down.”

He adds: “Thailand has casinos at all its borders and the government can capture this money leakage and tax it by having legalised and regulated casinos in Thailand.”

Big casino brands lining up for Thailand

The world’s biggest casino brands are all expected to be making a play for the market. Speaking at the JP Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum earlier this month, Bill Hornbuckle, president of MGM Resorts International, re-iterated MGM’s interest in the market.

“We’re like everyone,” notes Hornbuckle. “There’s a host of the usual characters poking around. Looking for sites and looking for partners.” However, he still believes there’s some way to go. “It’s new, it’s early, early days.

“I think the real question for all of us is going to be at least in the jurisdictions that we currently are in, will the [Thailand] regulatory regime be at a high enough level that it holds muster?

“The government also needs to participate in the proper way going forward. And until we see that, we can’t speak to that,” he concluded.

Hard Rock International is also “absolutely interested” in a multi-billion dollar Thailand-integrated resort. This has been highlighted on multiple occasions by Hard Rock Asia president Edward Tracy to iGB.

“They [the Thai government] are very interested in boosting tourism, expanding the convention market. It’s getting more and more difficult in the convention markets if you don’t have an IR and you don’t have a casino to fund up these expensive convention facilities and hotel.”

Tracy cites Hard Rock studies finding convention-based IRs would be viable for metropolitan Bangkok and resort island Phuket in southern Thailand. The former Sands China chief operations officer estimates a Bangkok IR budget in the US$3.5bn-US$6bn range, with US$1.5bn-US$2.5bn for Phuket.

Tracy notes that Hard Rock has been active in Thailand since 1991. The operator has cafes in Bangkok, Phuket and Chang Mai plus a hotel and cafe in Pattaya. These are all with local partners. “So we’re very familiar with the market; we understand the parameters of foreign investment.”

Can Thailand become the new Philippines?

Thailand’s status as a regional business hub and global tourist destination suggests Thai gaming could blossom into a competitor of the Philippines.

Led by its state-owned body, the Philippine Amusement and Gaming Corporation (Pagcor), the country already has ambitious plans to become South East Asia’s primary gaming hub.

To leapfrog the Philippines however, there is still some way to go. Thailand’s previous parliamentary report on gambling, released in 2023, raises the possibility of special zones for IRs, potentially including exemption from Thai ownership requirements.

A waiver, however, could stoke opposition from the public and business interests. These include the property sector, border casinos and illegal domestic operators.

“Thailand has a once-in-a-generation opportunity to become one of the most successful gaming jurisdictions in the world,” Spectrum Gaming Group managing director Frederic Gushin adds.

The major obstacles that need to be overcome will have to be faced first. As it stands, Thailand ranks 101st in Transparency International’s latest Corruption Perceptions Index. There is also stiff conservative opposition via the country’s Buddhist clergy, as well as underground casino stakeholders.

Additionally, a further question mark hangs over the country’s political process. Currently, the nation’s largest parliamentary party is excluded from government.

Perhaps most crucially though, King Bhumibol Adulyadej, a staunch casino opponent, died in 2016. Recent polling shows most Thais are open to casino legalisation.

“Everyone on all fronts supports it, including the all important support of the [current] king and the Thais themselves,” EuroPacificAsia managing partner Shaun McCamley previously highlighted to iGB.

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