Thailand wants to entertain you

Daniel Cheng

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September 3, 2024

The plot thickens…Thailand’s new draft casino bill straddles a thin line between economic heaven and a burning effigy.

What a difference a month makes. It was all quiet on the Siamese front during the spring as the Thai Finance Ministry headed a multi-ministry effort to review the entertainment complex legislative plan, but the relative silence was then shattered by an August Avalanche.

The month opened with the much-anticipated release of the draft entertainment complex bill for public comment. While this news boosted the casino industry, it was quickly overshadowed in the Thai media by the Constitutional Court’s dissolution of the largest political party in Parliament. Most gaming executives dismissed this political upheaval as peripheral news, failing to recognize its potential long-term implications for the industry.

However, a week later, the same court escalated the crisis by dismissing Prime Minister Srettha Thavisin. This development prompted some industry analysts to express grave concerns about the future of casino legalization in Thailand, fearing that the effort might be abandoned altogether with his departure.

Despair turned to relief when Paetongtarn Shinawatra was quickly appointed as the replacement, effectively preserving the casino legacy of her father, former Prime Minister Thaksin Shinawatra. The latter, though, was also under scrutiny by the courts a few days later when they scheduled a hearing for his alleged lèse-majesté offenses for July next year. The political shenanigans were not yet over for the month.

All in with ‘Ung Ing’

The opportunity to appoint a new prime minister and Cabinet allowed the Pheu Thai Party to consolidate its power, reshuffle the coalition government, and remove the former junta party, Palang Pracharath (PPRP), which they blamed for causing the court troubles for Srettha and Thaksin. In a double blow to the PPRP, more than half of the party’s MPs defected to stay with the Pheu Thai coalition government.

Paetongtarn’s appointment restored optimism among casino investors, as it secured Cabinet positions held by Pheu Thai members—including Julapun Amornvivat, Deputy Finance Minister and a key figure in entertainment complex legislation. Additionally, replacing the Palang Pracharath Party (PPRP) with the Democrat Party likely diminished significant opposition to the entertainment complex legislation.

Emboldened by his daughter’s ascension, Thaksin delivered his first public speech, emphasizing that the new government must prioritize casino legislation. Following Thaksin’s forum, the flow of interest surged. While Japan’s private sector remained cautious about casino investments, Thai businesses exhibited no such hesitation. A veritable row of Thai billionaires quickly formed as major conglomerates lined up for the lucrative entertainment complex licenses. Each suitor boasted a place on Forbes’ prestigious list of Thailand’s richest people.

Notably, Thaksin’s dinner talk was held at Siam Paragon, the flagship mall of the Mall Group, led by matriarch Supaluck Umpujh, who Forbes ranked #13 among Thailand’s wealthiest. Local media reports state that the Mall Group plans to repurpose a $1.5 billion development currently underway in the Bang Na suburb of Bangkok to secure an entertainment complex license. Not stopping there, the Umpujh family is reportedly considering expanding an existing mixed-use real estate project in Phuket to include another entertainment complex in the island’s tourist hub.

The U-Tapao Airport and Eastern Airport City Project, a crucial infrastructural hub in the Eastern Economic Corridor, has been widely speculated to be one of the first locations for a Thai entertainment complex. As part of a three-node high-speed rail line connecting U-Tapao, Don Mueang, and Suvarnabhumi Airports, the $8.5 billion Eastern Airport City mega development was awarded in 2020 to U-Tapao International Aviation Company (UTA) through a competitive bid.

Major partners in the successful concessionaire include Bangkok Airways and BTS Group Holdings, which hold 45 percent and 35 percent stakes, respectively. UTA envisions incorporating an entertainment complex into the development. The BTS Group, led by billionaire Keeree Kanjanapas (#28 on Forbes), operates Bangkok’s Skytrain.

Interestingly, Kanjanapas also has media interests through a joint venture with the Sansiri Group, which is owned by former Prime Minister Srettha. Bangkok Airways, the largest shareholder in UTA, is controlled by business magnate Prasert Prasarttong-Osoth, who holds a lofty #6 position on Forbes’ list. His family’s extensive holdings, including Thailand’s largest private hospital operator, BDMS, suggest the potential for a medical tourism-focused entertainment complex if UTA secures a license.

Even closer to the Forbes summit are the Chearavanont brothers (#2), whose Charoen Pokphand (CP) Group encompasses a vast empire in food and telecommunications. Reports indicate that the group is eyeing an entertainment complex in the heart of Bangkok, at Makkasan within the Ratchathewi district. Makkasan will be a major station on the three-airport high-speed rail link, which the CP Group is constructing with the State Railway of Thailand as part of a $6.5 billion public-private partnership deal.

As Japan’s experience shows, without stringent regulations, pretenders will emerge. My July op-eds on CNA and AGB highlighted Khlong Toei as a potential location for an entertainment complex. Now, the Royal Turf Club of Thailand, allegedly backed by the royal family, is proposing a $6 billion development in the area. The Royal Siam Haven is said to have already signed a memorandum of understanding with five foreign and four Thai partners.

Royal Turf Club of Thailand has plans for $5.8 bln IR project

The Sirivadhanabhakdi family (#3 on Forbes), whose portfolio includes Chang Beer and Frasers Property, has distanced itself from the project after its Asset World Corporation (AWC) property arm was linked to it. AWC President Wallapa Traisorat—daughter of group patriarch Charoen Sirivadhanabhakdi—was quick to deny any involvement, stating that the casino business does not align with their development model.

Let’s collectively pause and reflect as a hectic August comes to a close. As we look ahead, a new chapter may be unfolding: a whirlwind courtship between major international casino operators and the lineup of leading Thai conglomerates in search of their perfect match to snare one of the entertainment complex licenses.

The Thai tycoons are seasoned in joint ventures and partnerships which contributed to their success far and beyond local shores. However, they will take heed and tread carefully with gaming companies that typically don’t play well with others in an industry known for many acrimonious and failed unions, with MGM Resorts and Hard Rock being among the few exceptions.

While the release of the draft bill is a significant milestone, it’s important to remember that it’s just the beginning. Although the bill is a commendable effort, its 65 sections fall short of a comprehensive regulatory framework. To illustrate, Singapore’s Casino Control Act, with its 200 sections, provides a much more detailed and in-depth approach. Greater clarity will discourage additional unqualified applicants for the licenses that have hindered the process in Japan.

The Thai government needs to seek industry subject-matter expertise to refine the entertainment complex framework moving forward. Singapore had engaged various industry consultants with deep knowledge in different disciplines in the enactment of its gaming law. It could make the difference between a robust new industry or a fire tinder house of cards.

I’ll conclude this commentary as I began, with the lyrical prose of Robert Peter Williams:

“Separate your right from wrongs. Come and sing a different song. The kettle’s on, so don’t be long.“

It’s in Thailand’s own hands to seize this opportunity and create something truly exceptional and successful.

Good morning. The post-COVID period may have just been the eye of the storm for the Macau gaming industry, as a new election is looming for the city’s top political role, and the candidate doesn’t appear to favor the gaming industry. Noting that operators have had a “large, negative impact” on the city, the former top judge running (likely unopposed) for office is preaching diversification away from an industry he deems as having seen “barbaric expansion”. Meanwhile, in Australia, The Star tries to hang on by the skin of its teeth, after the results of Bell Two mar the opening of Queen’s Wharf Brisbane.

What you need to know

Macau’s new Chief Executive candidate has harsh words for the gaming industry, prompting a review of what ‘diversification’ will mean.
New South Wales report maintains Sydney license suspension for The Star, despite the recent opening of Queen’s Wharf Brisbane.

On the radar

Money laundering charges filed against ‘POGO mayor’ Alice Guo.
Universal Entertainment announces resignation of former CEO ahead of ousting.
Macau Legend continues losing streak in 1H24, despite uptick in Macau gaming.
Macau GGR reaches $2.46 billion in August, up nearly 15 percent yearly.
Experts address illegal wagering and gene doping at the Asian Racing Conference.
Success Universe sees reversal into losses in 1H24.
MGM China declares special dividend of $172M.

AGB Intelligence

MACAU

New Chief Executive lays bare ‘diversification’ necessity

Macau is facing yet another wave of uncertainty, after the new – and likely sole – candidate for Chief Executive has taken a hard line on the city’s gaming operators, noting that they have had a “large, negative impact” on the world’s gaming hub. Sam Hou Fai, a former top judge, is now expected to focus on pushing the city’s much-preached attempts for ‘diversification’, something mainland Chinese authorities have been mandating for some time, notes a top gaming association head.

Corporate Spotlight

1xBet: The most popular gambling games and slots in Asia

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Industry Updates

41st Asian Racing Conference heads to Saudi Arabia in 2026
Play’n GO Music announces collaboration with EDM artist Humansion.

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The compliant filed by the Presidential Anti-Organized Crime Commission (PAOCC), together with the National Bureau of Investigation (NBI) and Anti-Money Laundering Council (AMLC), aims to “combat financial crimes and safeguard the integrity of the Philippine financial system”, notes an AMLC exec.

“The respondents, through their individual or collective conspiratorial acts, evidently transacted the money or money instruments representing the proceeds of the unlawful activities involving human trafficking, securities regulation violation, and estafa/swindling,” indicates the complaint.

Furthermore, a blue notice to Interpol has also been issued in regards to Alice Guo.

An Interpol red notice is also being procured once court charges are filed.

The charges indicate that Guo had brought investors to her jurisdiction, including two individuals charged in the multi-billion-dollar money laundering case in Singapore.

It also alleges her continued involvement in other companies, concealment of funds and other allegations.

Guo is currently believed to be in Jakarta, Indonesia, on the run, according to authorities.

Fujimoto resigned as president of Universal Entertainment in April, after the drawn-out lawsuit which commenced in August of 2019. It’s alleged that he pushed the company to transfer up to $43.5 million out of Universal Entertainment without proper justification and without adhering to internal decision-making procedures.

The movement to remove Fujimoto was one of two main items up for discussion at the September 19^th meeting, the first of which being the promotion of Tomohiro Okada to a role as director on the company’s board.

Tomohiro is the son of ousted Universal Entertainment founder Kazuo Okada, who made waves when he split with his father in 2017, with Kazuo ousted from the board of Okada Manila. The divide was deepened after Kazuo instigated a hostile takeover of Okada Manila in May of 2022 – with a court ruling confirming his proper removal from his roles as CEO, Chairperson, director and shareholder of the operating company of the integrated resort: Tiger Resort, Leisure and Entertainment (TRLEI).

Okada Manila, Universal Entertainment, Philippines

Tomohiro is currently a director of the parent company of Universal Entertainment, Okada Holdings.

Looking ahead the group notes that it aims to ‘optimize the facilities of the Macau Fisherman’s Wharf’, also noting that ‘the market generally expects that the United States will soon be starting to commence interest rate cut,’ which it expects to ‘benefit the further recovery in tourism related industries’ and ‘enable the group to spare more cash flow for future development’.

The group has already discontinued its operations in Lao, ‘in order to centralize and reallocate its resources to its business operation in Macau and future development’. It currently has no other operations outside of Macau.

41st Asian Racing Conference heads to Saudi Arabia in 2026

Elsewhere

AGBrief Editorial

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September 2, 2024

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41st Asian Racing Conference heads to Saudi Arabia in 2026

The 41st Asian Racing Conference (ARC) will be held in Saudi Arabia in 2026 with the Jockey Club of Saudi Arabia, in conjunction with the Asian Racing Federation (ARF), to stage the international conference in Riyadh.

The hosting for the 41st edition was announced at the Closing Ceremony of the 40th ARC in Sapporo, Japan.

Mr. Winfried Engelbrecht-Bresges, ARF Chair and Chief Executive Officer, The Hong Kong Jockey Club, said: “On behalf of the ARF Executive Council, it is with great pleasure that I announce that the Jockey Club of Saudi Arabia will host the 41st Asian Racing Conference in Riyadh in 2026.

Jockey Club Saudi Arabia, Asian Racing Federation — Jockey Club of Saudi Arabia

“We are sure that the Jockey Club of Saudi Arabia will deliver a truly wonderful Conference, and I congratulate His Royal Highness Prince Bandar Bin Khalid Al Faisal and his team.”

His Royal Highness Prince Bandar Bin Khalid Al Faisal spoke at the 40th ARC’s Closing Ceremony at the Grand Mercure Sapporo Odori Park: “It is fitting that this great racing nation (Japan) should host the 40th renewal in the historic surroundings of Sapporo, where so many of the world’s greatest racehorses start their journey, and what gracious hosts they have been.

“Saudi Arabia is delighted to be selected as the venue for the 41st Asian Racing Conference. We thank the Asian Racing Federation for this honor, and we plan to give this prestigious event the platform it deserves back home in Riyadh.”

Quantum Rush is a unique project in the world of motor-racing and is the first collaboration of its kind involving a professional motorsport team. The song is available as of today on all music streaming platforms and is the product of months of behind-the-scenes work between Play’n GO Music and the up-and-coming Canadian artist Humansion.

The single was produced on behalf of MoneyGram Haas F1 Team as part of its collaboration with Play’n GO Music and will serve as a pump-up track for both fans and staff of the American motorsport team ahead of race weekends.

Ebba Arnred, Chief Marketing Officer and Co-Founder, Play’n GO said: “We’re very proud of the success of Play’n GO Music in the short time since it launched, and this might be our coolest project to date. We really admire the work created by Humansion, and it’s very exciting to have an artist of his quality working with our brand, and all the more exciting to do so in collaboration with our friends at MoneyGram Haas F1 Team. We’ve already seen the popularity of our playlists with the team this summer, and we’re hopeful that this might be our best collaboration yet.”

As Macau moves forward with its diversification efforts, Song believes that the challenge will be to balance the growth of new industries with the need to maintain stable fiscal revenue. This underscores the importance of careful planning and effective policy implementation to ensure that Macau’s economy continues to grow sustainably, benefiting both the government and its residents.

Not new

The city’s Chief Executive candidate, former top court judge Sam Hou Fai, emphasized during his candidacy announcement that a path toward “moderate economic diversification” is essential. This message echoes a key point made by Xia Baolong, Director of the Hong Kong and Macau Affairs Office of the State Council.

Sam Hou Fai, Macau — Sam Hou Fai, sole Macau Chief Executive candidate

Billy Song highlighted that the discussion around economic diversification is not new, particularly concerning the impact of the gaming industry’s growth on other sectors. He remarked, “This problem has always existed. The development of the gaming industry has had clear effects on other industries. As for the future, there is no doubt that the gaming industry broadly supports the goal of diversification.”

He continued, “The key is how we can contribute to non-gaming elements under government guidance and policy support to further promote diversification. While the value of the gaming industry over the years cannot be overlooked, we need to consider how to use its strength to promote other industries moving forward.”

SJM, Grand Lisboa Hotel, SJM Holdings, SJM resorts, Macau

Government’s economic diversification plan

In November last year, the Macau government unveiled its first official economic diversification plan, marking a new approach to the traditional five-year plan.

Covering the 2024 to 2028 period, the plan centers on tourism as a primary pillar, supported by four emerging industries: healthcare, finance, technology, and large-scale sporting, cultural, and business events. This “1+4 model” is seen as crucial for reducing Macau’s dependence on casinos for employment and tax revenues.

Macau Economic sectors importance — Source: DSEC

Macau’s historic reliance on gaming presents a challenge. In 2019, the gaming industry accounted for about 85 percent of Macau’s regular income. However, this figure dropped to 50.5 percent in 2022, the year when COVID-19 severely impacted the city and led to temporary casino closures to curb the virus.

While the plan does not specify a concrete target for achievement by the end of 2028, it mandates that Macau reduce its dependence on gaming revenue to below the levels recorded in 2019. Meanwhile, the Secretary for Economy and Finance, Lei Wai Non, stated that many of the plan’s objectives will be propelled by market forces, with the government taking on a guiding role.

Challenges ahead

The plan aims for the non-gaming sector to account for around 60 percent of Macau’s total gross domestic product (GDP) by 2028.

However, Billy Song pointed out that while the gaming industry may contribute a reduced portion to the city’s GDP, Macau’s financial reserves remain heavily dependent on gaming tax revenue.

“The issue is that our current public finances rely heavily on the gaming industry, with about 70 to 80 percent of fiscal revenue coming from this sector. The challenge is how the city can achieve greater effectiveness in promoting diversified industries alongside the gaming sector,” Song concluded.

Macau’s GGR results exceeded the expectations of Morgan Stanley analysts by 5.23 percentage points. At the beginning of August, these analysts had forecasted that Macau’s August 2024 Gross Gaming Revenue (GGR) would reach MOP18.8 billion ($2.35 billion), a 1% month-over-month increase. Year-on-year, the August results also performed better, with a difference of 5.76 percentage points compared to the 9% predicted by the investment banking company.

The plot thickens…Thailand’s new draft casino bill straddles a thin line between economic heaven and a burning effigy.

Table of Contents

“Regulating the Game” unites industry and regulatory professionals in a comprehensive program aimed at enhancing individual and organisational capabilities, deepening knowledge of the sector, and fostering innovative discussions on best practices in gambling regulation.g the

What you need to know

On the radar

MACAU

Corporate Spotlight

Industry Updates

Table of Contents

Money laundering charges have been filed against ‘POGO mayor’ Alice Guo and 35 other individuals with the Philippines Department of Justice (DOJ).

Table of Contents

Okada Manila operator Universal Entertainment has announced that its former President and CEO Jun Fujimoto has resigned from his position as Director of the company, effective from August 30th, ahead of a September 19th meeting set to oust the official from the role.

Table of Contents

Macau gaming satellite casino operator Macau Legend has managed to minimize its losses in 1H24 to HK152.47 million ($19.55 million), amongst a yearly rise in revenue.

The 41st Asian Racing Conference (ARC) will be held in Saudi Arabia in 2026 with the Jockey Club of Saudi Arabia, in conjunction with the Asian Racing Federation (ARF), to stage the international conference in Riyadh.

Table of Contents

Play’n GO Music, the music division of the world’s leading casino entertainment provider, has today announced a collaboration with renowned EDM artist Humansion to release an exclusive single, Quantum Rush, another feature of its partnership with MoneyGram Haas F1 Team.

Table of Contents

Macau’s economic diversification has long been a topic of discussion, but recent remarks by Chief Executive candidate Sam Hou Fai, who described the development of Macau’s gaming industry as a “barbaric expansion” with a “large, negative impact” on the city, have reignited the debate.

Not new

Government’s economic diversification plan

Challenges ahead

Table of Contents

Macau’s gross gaming revenue (GGR) amounted to MOP19.75 billion ($2.46 billion) in August, reflecting a 14.8 percent increase from the same month last year’s MOP17.21 billion ($2.14 billion).

Table of Contents

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Okada Manila operator Universal Entertainment has announced that its former President and CEO Jun Fujimoto has resigned from his position as Director of the company, effective from August 30^th, ahead of a September 19^th meeting set to oust the official from the role.