Foreign interest seen strong if casinos legalized

Thailand would be a major draw for foreign investors were it to legalize its casino industry and would likely provide significant competition for other regional jurisdictions, according to panelists at the recent ASEAN Gaming Summit.

Although it’s almost impossible to put a size on the potential market, given the lack of parameters such as whether locals would be permitted to gamble, Thailand could feasibly become of similar a size to Singapore, which currently generates just under $6 billion in gross gaming revenue from two integrated resorts.

The Southeast Asian Kingdom has a population of about 68 million and a well established tourism industry, pulling in 32.6 million visitors last year, a gain of 9 percent. Total international tourism revenue was around THB 1.64 trillion ($46 billion), representing a year-on-year increase of 11.68 percent over 2015. 

At present gambling in the country is only permitted through the Bangkok Turf Club and the state lottery, but the illegal market is thought to be huge. Thais are also frequent visitors to the many border casinos in neighboring Cambodia. A 2011 study from the Chulalongkorn University’s Social Research Institute study estimated that THB 102 billion annually was spent on the underground lottery, THB 76.7 billion on the government lottery, with THB 46.3 billion spent on illegal casino betting and THB 38 billion on football gaming.

GLO plans stricter checks on retailers

The Government Lottery Office has developed a two-year master plan to tackle overpriced lottery tickets, a long running problem in the country. The plan, scheduled to be unveiled in May will involve stricter checks on all lottery retailers throughout the country. It will focus in particular on the sale of packets of lottery tickets which is exploited by sellers to mark up prices. The government may consider offering the batches officially to keep a stricter control on prices.

Tension over location of border casino

Anti-corruption activist Veera Somkwamkid claims a new border casino is sited in Ta Phraya National Park, which forms part of a World Heritage Site in Thai territory, rather than across the border in Cambodia. The recently opened casino is reported to be situated close to the Sai Takoo border checkpoint in Buri Ram province. Following the complaints, Thailand’s National Parks Department undertook an examination of the official map of the national park to prove that the casino was not located within its perimeter, but the debate continues to simmer.

Some reports have said that up to half of the population may gamble illegally. Various Thai governments have mulled the legalization of gambling, going so far as to commission studies as the likely tax revenue and how to mitigate gambling addiction. Former Prime Minister Thaksin Shinawatra favored casinos and had planned to hold a  national referendum on the subject, though he was unseated in a 2006 coup.

His younger sister was elected to government in 2011, resurrecting hopes she would push forward with her brother’s casino plans, though she too was ousted in 2014 before making any progress. Meanwhile, powerful members of the new military government have also indicated they are not averse to casinos.

Sungsidh Piriyarangsan, dean of Rangsit University’s College of Social Innovation, said in research last year that tax revenues of more than THB 100 billion (US$2.78 billion) could be achieved if casinos were legalized in Thailand. 

“I do think there would be considerable appetite to enter Thailand. It would be perceived to be a much greater risk to Singapore than just about anywhere in the region because of the infrastructure it already has for tourists right now,” said Paul Bromberg, Spectrum Asia CEO “The Thai market would be a very, very attractive one to foreign operators.”

Las Vegas Sands in particular has expressed an interest in large-scale developments in the country. 

Bromberg said he did believe Thailand would eventually move towards legalizing casinos, though the current political instability means it’s not a priority. The country has been ruled by a military government since a 2014 coup and its highly revered king, who was seen as a stabilizing force, passed away last year.

The majority of the Thai population is not opposed to gambling, though the issue is likely to be highly politicized, given powerful vested interests in certain parts of society. Some of these control large underground operations in the capital Bangkok, as well as many of the casinos that dot the border areas.

The seaside resort town of Pattaya was seen as an obvious location, given its proximity to Bangkok’s international airport, though the island of Phuket is also likely to be a strong contender as a location, said Tim Shepherd, Silver Heritage president, business development and marketing.

He said at the end of the day, an IR in either location is unlikely to have a major impact on the border casinos, as betting patterns show locals will still frequent the properties nearest to them. 

Bromberg said, were the government to muster the political will to push through gambling legislation, the process could potentially be quite fast. In a prior review it was decided that existing legislation that covers the elements of gambling that are legal in the country could be adapted for casinos.

“I’m not sure when it will happen but at some point in the future you will see an IR,” he said.