Top-tier gaming companies have very limited opportunities around the world, turning Thailand into the new gold rush, notes the CEO of Spectrum Gaming.
Given that Thailand has become one of the most focused markets in the eyes of gaming companies worldwide, Fredric Gushin, president and CEO of Spectrum Gaming Group, is not surprised that Genting Singapore has become the first entity to formally announce its interest in developing an integrated resort (IR) in Thailand.
Many gaming companies have already monitored the situation and conducted visits to Thailand over the last year to understand the Thai market.
Genting Singapore, known for its success in Singapore through Resorts World Singapore on Sentosa Island, is among the companies seeking fresh prospects.
Speaking to AGB, the gaming expert notes that Genting Singapore and many other gaming companies were disappointed by Japan’s integrated resort process, noting that “the IR selection process by the prefectures in Japan was flawed.
“Companies like Genting Singapore are always examining and evaluating gaming opportunities in Asia and around the world. Therefore, it should come as no surprise that Genting and other companies would give Thailand serious consideration,” he said.
Thailand is one of the most popular travel destinations in the world, especially for Asian travelers. According to Thailand’s Ministry of Tourism and Sports, over 27 million foreign visitors arrived in 2023.
Gushin notes that Thailand is well known for its hospitality, sophisticated tourist markets, and strong tourism infrastructure. Land-based gaming would be a natural fit for this already thriving (pre-pandemic) industry.
“In concept, Thailand has the potential to develop into a major gaming jurisdiction, thereby encouraging investment and development. That would mean new tax revenue – and new employment opportunities for the local population. For all jurisdictions considering casino gaming, success will be determined by the strategic decision-making by the government early on and the passage of a gaming law that will encourage these results,” he noted.
Under his analysis, the gaming expert indicates that gaming companies, during on-site visits, want to understand some of the fundamental issues that might influence their decision to enter this market.
These types of issues include:
- Evaluating the need to partner with a Thai company for purposes of developing an integrated resort;
- The passage of a gaming law and ascertaining whether the regulatory process will meet international standards;
- Gross Gaming Revenue (GGR) tax rates;
- Determining whether the Integrated Resorts have to be built on government land or private-sector land;
- Evaluating whether Thailand will have the “governmental will” to effectively regulate casino gaming;
- Determining whether local Thai nationals will be permitted to participate in gaming in Thailand and, if so, under what circumstances;
- The number of casinos and/or integrated resorts to be permitted in Phase 1;
- Will the Thai government require minimum investments related to the development of IRs and casinos?
- Will licenses be issued through a request for proposal (RFP)?
Gaming legislation
The gaming expert believes that, although it is not clear where the gaming issue fits into the present parliamentary agenda, “gaming legislation will move forward during this legislative session”.
Prior to the recent election in 2023, there appeared to be bipartisan support for the legalization of certain forms of gaming, including casinos and integrated resorts. It is not clear as to whether this situation still exists in Thailand. However, it is worth noting that the Thai Parliament re-authorized the Gaming Committee in the new Parliament last fall.
The government has only been in office for several months, and many other pressing issues need legislative approval, including the budget and other such issues.
Gushin believes that “the strategic decisions made by the government that will be reflected in the gaming law and their strategic plan will establish the foundation for legalized gaming in Thailand”.
“Part of that process should be to provide confidence to companies willing to make multi-billion dollar investments in Thailand that their investment is worth it and that the government will provide a regulatory environment that protects their investment and adequately regulates all forms of gaming in Thailand,” he noted.
Visa-free access
Given that Thailand, Malaysia, and Singapore recently announced a visa-free policy for Chinese tourists, with Thailand establishing the policy as permanent, some changes have occurred in these countries’ tourism scenarios.
The gaming expert indicates that Chinese tourism is a major market segment for most countries throughout Asia, including Thailand, where Chinese tourists are one of the principal market segments of the tourist industry.
“To date, Chinese tourism has not yet returned to Thailand in pre-Covid numbers. There are many reasons for this, including post-Covid issues and the economic slowdown in China. Having noted that Chinese tourists would be a major market segment for one or more Thai IRs.”
Similarly, in Singapore and Malaysia, tourism from China is a major segment of the overall tourism market. Chinese residents of Singapore and Chinese tourists constitute a significant market segment in that jurisdiction.
“However, issues in China, such as continued restrictions on junkets and ongoing efforts to prohibit Chinese tourists from going to various jurisdictions for the purpose of participating in casino gaming, may have an impact on recruiting Chinese gaming patrons if these restrictions are enforced. Moreover, China has in the past seemingly used tourism as a weapon against certain countries, such as the Philippines and Korea,” he said.
As of this month, Chinese authorities are still calling for a crackdown on cross-border gambling. According to the law revised in March 2021, soliciting and organizing Chinese citizens for cross-border gambling are considered violations of the law.
Competition in the region
Some opinions suggest that the opening of casinos in Thailand will exert pressure on Vietnam‘s existing Integrated Resorts (IRs).
Gushin considers that the gaming industry in Vietnam is growing, with recent announcements about new projects. Vietnam is clearly expanding its tourism industry, becoming an increasingly attractive destination.
However, the gaming industry in Vietnam is limited by the inability of most locals to participate in gaming legally. There have been some efforts to permit locals to participate in gaming on an experimental basis, but these efforts have been uneven.
“As presently structured, Vietnam might not be in a strong position to compete with a vibrant gaming industry in Thailand. This may encourage Vietnam to make changes to its approach to gaming down the road so that they could be in a position to effectively compete with Thailand,” he noted.
VIP under increasing pressure
The expert believes that there is upside potential for gaming in Asia. However, the VIP segment will face increasing pressure as there is a limited number of VIP players, and the junket model is under stress.
“There will be increased competition for this market segment. Mass and premium player gaming will become more important in each of the existing gaming jurisdictions, and there is likely to be increased competition for these market segments as well.”
“These trends are taking place irrespective of Thailand legalizing gaming, as existing jurisdictions are expanding gaming opportunities and/or requiring their licensees to make additional investments.”
