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Thailand takes final steps towards legalising casino

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Thailand is moving closer to adopting casino regulations in order to attract wealthy tourists.

A vote by the 500 members of Thailand’s house of Representatives on Thursday, 28 March, led to this move.

A total of 253 of the 257 legislators present on Thursday voted in favor of a recommendation recommending legalisation of casinos within large entertainment complexes. This plan is now forwarded to cabinet for approval.

The Prime Minister Srettha Tavisin has given his support to the initiative, stressing the benefits of attracting foreign investments into Thailand.

Srettha, announcing on X that “the entertainment complexes would enhance the tourism industry of the country,” said: We have wasted too much time in the past. “The government will recover the lost time, and convert it into an opportunity to generate economic growth for the nation and its people.”

In Thailand with its majority Buddhist society and conservatism, most types of gambling are illegal.

It will however be consistent with the recent liberalization of its landscape in order to revitalize its tourism industry after the pandemic.

Thailand’s Proposal: What is it?

In 2023, the Thai parliament commissioned this study. The study’s goal was to determine the benefits of regulating casinos in large entertainment centers.

The government sees a regulated gambling market as an effective way to generate tourism revenues and combat the illegal gambling problem. Thailand is also experiencing a significant amount of “leakage”. Players regularly frequent border casinos located in neighboring countries such as Cambodia.

According to the study, Thailand’s tourism revenues could increase by nearly $12 billion. Casinos will be integrated into integrated resorts or entertainment complexes. Building such locations will contribute greatly to the regional economy, and reduce unemployment.

A tax of 17% on gross gaming revenues is also proposed. Thailand would then have one of the most favourable tax systems in the entire region. The initial licence period should be 20 years and then renewed every 5 years.

Finaly, the approval of larger casinos will require them to have invested a minimum amount in the country. This is $2.7bn.

Thailand Casino Approval is expected “within 3 years”.

Industry experts expect approval of integrated resorts (IR) within the next three years. MGM Las Vegas Sands, Hard Rock Asia and other resorts are expected to join the list.

In a previous study on casinos, released by the Parliament in January 2023, up to five “entertainment centers” were proposed. It would be similar in nature to the IRs of Singapore and Macau.

The primary goal of the complexes is to raise tax revenue. They would include casinos, shops, convention centers, and other amenities. This will, of course, depend on Thailand’s efforts to regulate the gaming market and foreign operators’ willingness for Thai companies to work with them.

In an interview conducted with iGB September 2023 by James Kaplan, CEO of Destination Capital in Bangkok, Thailand said that Thailand would “it”, however the question was what “it” would look like.

Kaplan believes that the Thai legalization effort is likely to succeed, as previous efforts failed. In 2023, Bangkok-based Kaplan stated that the key difference was we are living in a different time. The public debt now accounts for 58% of the GDP. The government must raise revenues to reduce this debt.

He continues: “Thailand’s borders are dotted with casinos. The government could capture and tax this money by legalising and regulating casinos in Thailand.”

Thailand to host big casino brands

All of the world’s largest casino brands will be competing for this market. Bill Hornbuckle, President of MGM Resorts International, reaffirmed MGM’s commitment to the market at a JP Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum held earlier in the month.

“We’re like everyone,” notes Hornbuckle. There are a lot of familiar characters snooping around. He is still looking for new sites, and for potential partners. It’s still early in the game.

The real question is, at least for the countries that we are currently in, whether the regulatory system in [Thailand] will be high enough to pass muster.

The government must also participate properly in order to move forward. We can’t comment on this until we have seen it.

Hard Rock International has also expressed “absolutely interest” in an integrated resort worth billions of dollars, located in Thailand. Hard Rock Asia President Edward Tracy has repeatedly highlighted this to iGB.

The Thai government is very keen on boosting tourism and expanding the conventions market. The convention market is becoming more challenging if there’s no IR or casino that can fund these costly convention facilities.

Tracy cites Hard Rock’s studies that show convention-based IRs are viable in Bangkok metropolitan area and Phuket resort island, both located south of Thailand. Former Sands China Chief Operations Officer estimates a Bangkok IR Budget between US$3.5bn and US$6bn, while US$1.5bn to US$2.5bn is estimated for Phuket.

Tracy notes Hard Rock’s presence in Thailand, which dates back to 1991. Operator has cafes and hotels in Bangkok, Phuket, Chang Mai and Pattaya. All of these are with local partners. We are very familiar with foreign investments and the local market.

Can Thailand be the next Philippines?

Thailand is a hub for regional businesses and a global tourism destination. This could make Thai gaming a serious competitor to the Philippines.

Philippine Amusement and Gaming Corporation, a state-owned company in the Philippines, has already ambitious plans for the country to become the primary gaming hub of South East Asia.

There is still a long way to go before we can leapfrog over the Philippines. In Thailand’s 2023 previous parliamentary gambling report, the idea of a special zone for IRs was raised. This could include exemptions from Thai ownership rules.

However, a waiver could spark opposition by the business community and public. This includes the real estate sector, border casino operators and illicit domestic operators.

Spectrum Gaming Group’s managing director Frederic Gushin says, “Thailand is a unique opportunity that comes along only once in a generation to be one of the best gaming jurisdictions around the globe.”

Priorities will be given to overcoming the major challenges. Thailand currently ranks 101st on Transparency International’s Corruption Perceptions Index. The country’s Buddhist priests and underground casino stakeholder also have a strong conservative opposition.

A further question marks hangs over the political process of this country. The nation’s biggest parliamentary party, currently excluded from the government.

The death of King Bhumibol, an opponent to casinos who was adamant, in 2016 is perhaps the most important. A recent poll shows that most Thais support the legalisation of casinos.

Shaun McCamley, managing partner of EuroPacificAsia and iGB’s previous report on the matter stated that “everyone supports this initiative. This includes the important support from the Thais as well as the current king.”

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