Recently proposed entertainment complex legislation marks a significant step toward the potential legalization and regulation of integrated resorts in Thailand, Fredric Gushin, Managing Director of global gaming consultancy Spectrum Gaming Group, told AGB.
This month the Thai government released the Draft Integrated Entertainment Business Act for public consultation until August 19th. The legislation seeks to modernize outdated laws and create a comprehensive framework to support and regulate the industry’s growth.
According to Gushin, there are three key stakeholders whose interests must be addressed to ensure the success of these projects: the government and the general public, potential operators of Entertainment Centers, and the financial community that will fund these ventures.
“The draft law appears to be a positive step forward that addresses the concerns of all three major stakeholders”, Gushin highlighted
The consultant emphasized the need for public confidence in the government’s approach, noting that “the public needs to be assured that the government will take the legalization of Entertainment Centers seriously” and “develop social safeguards and security procedures that meet international standards for Integrated Resorts, which have been successfully adopted in other jurisdictions”.
He underlined that for potential operators, the transparency and comprehensiveness of the regulatory process will be critical.
The liberalization of the gaming industry is expected to boost Thailand’s tourism revenue by $12 billion, according to studies, with the new draft allowing for 30-year licenses with 10-year extensions.
Potential locations to host the Entertainment Complexes include Greater Bangkok, Phuket, Chiang Mai, and Chonburi (Pataya), to be established within 100 kilometers of major airports, and with a paid-up capital of at least $283 million. Thailand will be competing with the emerging market of the UAE and, to some extent, Japan.
Galaxy Entertainment Group, MGM Resorts and Las Vegas Sands are among the operators who have already declared interest in the market.
Gushin explained that operators need “assurance that the regulatory process will be transparent and comprehensive, protecting their investments.”
The bill – which the report says is already completed – aims to promote and regulate integrated entertainment complexes that meet standard requirements, as a measure to encourage domestic investment and support sustainable tourism.
Under the bill’s provisions, an entertainment complex must acquire a license to operate, valid for up to 30 years. Operators must pay a THB5 billion ($142.7 million) registration fee and an annual payment of THB1 billion ($28.3 million).
The complexes will be assessed every five years, and the license can be renewed for another 10 years after the initial 30-year period.
While many technical details, such as gaming tax rates and the number of licenses, will be determined by the Policy and Executive Committees, Gushin believes “the draft law appears to provide sufficient discretionary authority to effectively regulate the Entertainment Centers.”
Financial investors also play a crucial role in the success of future IR projects, with Gushin pointing out that investors “will need assurance that their investment will yield a positive return, justifying their participation in the Entertainment Centers.”
In the end, the enactment of the law, Gushin noted, is merely the first step in a larger process.
“Subsequent decisions by the Policy Board and Executive Committee, based on the law, will lead to the promulgation of regulations,” he points out. These decisions will include complex and challenging determinations, such as the locations and number of Entertainment Centers.
“The enactment of the law is the first step in the process. Subsequent decisions by the Policy Board and Executive Committee, based on the law, will lead to the promulgation of regulations. Complex and difficult decisions, such as the locations and number of Entertainment Centers, will be made”, he told AGB
“While not addressed in full at this time, Section 55 delineates the baseline from which the government will tackle socially responsible gaming issues, given that local participation will be permitted, with an entry fee for locals and an exclusion program”.
Reports have pointed out that the Thai government is determined to press ahead with the legislation, with the issue being discussed in recent monthly meeting at Government House between leaders and representatives of the coalition parties.
Addressing the possible timeline for the opening of the country’s first IR, Gushin posited that this will ultimately be determined by several factors yet to be decided.
“However, setting a goal for the opening of the first Entertainment Centers by 2029 is not unreasonable. Once licensees are determined, they should be held to a construction schedule that ensures the opening of the casinos within an agreed-upon timeframe with the Policy Committee”, he stated.
