Amid an accelerating move towards casino legalization in Thailand, the country could see its first Entertainment Complexes (EC) by 2029, according to research by Maybank Investment Bank.
In this context, Thailand could open its first casino before MGM Osaka, which is scheduled to open in Autumn 2030.
According to the most updated information, in addition to Thailand proposing gross gaming revenue (GGR) be taxed at 17 percent, the second lowest in ASEAN after Cambodia, the country is expected to develop the industry on a large scale. As Japan has only issued one casino license, according to initial planning, Thailand may house 5-8 ECs.
Analyst Samuel Yin Shao Yang from Maybank notes that favored locations are in the Eastern Economic Corridor (Rayong, Chonburi, and Chachoengsao), the south (Phuket, Phang Nga, Krabi), the north (Chiang Mai, Chiang Rai, Lampang), and the northeast (Nong Khai, Udon Thani, Khon Kaen, Nakhon Ratchasima).
These locations are also in the midst of building/upgrading their airports (Eastern Economic Corridor, south), ports (Eastern Economic Corridor), and high-speed rail (north and northeast). The whole idea of ECs is to attract more tourists to Thailand. Assuming 2 years to finalize a regulatory framework and 3 years to construct, the first EC may only open in 2029.
In addition to the attractive conditions, Maybank notes that corporate tax rates of 20-30 percent will be levied on pre-tax profit. Locals will be subject to a yet-to-be-determined casino entry levy and will be prohibited from entering casinos if requested by court orders or family members. License bidders must be locally incorporated and have paid-up capital above THB10 billion ($270 million).
The initial license duration is 20 years but renewable every 5 years. Four different investment sizes are envisioned, but the first phase of licenses will be for the largest, commanding a minimum capex of THB100b ($2.7 billion).
Genting Singapore and NagaCorp most at risk
The research team from Maybank considers that Genting Singapore and Cambodia’s NagaCorp are ‘most at risk,’ citing the low tax rates and social safeguards à la Singapore will be proposed.
Meanwhile, Genting Malaysia’s Resorts World Genting could be less impacted, citing less than 20 percent of their GGR is derived from foreigners.
‘We are more concerned for Genting Singapore’s Resorts World Sentosa where we estimate that 60 percent of GGR is derived from foreigners, when VIP is about 80 percent, mass market with 40 percent.’
Regarding NagaCorp’s Naga 1 and 2, where almost all their GGR is derived from foreigners, currently only Cambodians who hold foreign passports can gamble in Cambodia.
‘Yet, recall that many who had believed that Malaysian GGR would fall after the Singaporean integrated resorts opened in 1H10 were proven wrong.’notes an analyst.
Meanwhile, both Genting Singapore and NagaCorp are investing heavily to upgrade their properties, with Genting Singapore even expressing interest in bidding for a Thai EC license. Thus, their eventual fates may be a lot less dire.
