Galaxy Entertainment Group has confirmed its interest in pursuing an integrated resort (IR) project only in Bangkok, despite Thailand’s plans to issue around five gaming licenses across the country, three of which will be located outside of Bangkok.
The reason cited by Galaxy’s management is that Bangkok is seen as one of the world’s top travel destinations, which would provide itself with ‘more certainty on its investment return’.
This information was disclosed by Goldman Sachs following a roadshow in Singapore earlier last week, where Galaxy’s CFO Ted Chan and Senior Vice President of Investor Relations Peter Caveny met with investors.
‘They are open to partnering with local businessmen or companies with strong connections and relationships,’ the report states.
According to previous reports, the Thai government plans to issue five IR licenses, including two in Bangkok, and one each in Phuket, Chiang Mai, and Pattaya. These licenses will be granted for 30 years, with the possibility of renewal for up to an additional 10 years. Gaming taxes are expected to be set at 17 percent, which is relatively low compared to other gaming jurisdictions, except for Cambodia.
Goldman Sachs highlights the strong potential of Thailand’s tourism industry for gaming growth. The country welcomed 28 million international visitors last year, a figure comparable to Macau’s inbound tourism. The majority of these visitors came from ASEAN countries, providing a solid foundation for growth in the gaming sector.
The process for legalizing casinos in Thailand is progressing steadily. The draft bill for the IR initiative is expected to be presented to the Cabinet by the end of this year, with further deliberation in Parliament expected in the first half of 2025. If approved, the government may issue a Request for Proposal (RFP) by mid-FY25.
Galaxy’s Thai IR estimated to contribute up to $300M in EBITDA annually
With a projected $3 billion total capital expenditure (capex) for the project—slightly above the minimum requirement of THB100 billion ($2.9 billion)—Galaxy estimates a potential $0.8 billion initial equity investment.
The brokerage notes that this funding would be supported by Galaxy’s strong balance sheet and cash flow, with half of the investment to be shared with a local partner, following the common 50/50 equity/debt funding model.
In addition, analysts from Goldman Sachs note that, given the scope and complexity of such projects, it could take several years for the casino resort to reach completion. Upon completion, Galaxy anticipates generating $225-300 million in EBITDA annually, assuming a 15-20 percent return on invested capital (ROIC)—a benchmark derived from other regional casino projects. This would represent a substantial contribution to the company’s future earnings, given that projected EBITDA for FY24 is $1.5 billion.
Regarding future market development the brokerage notes that, compared to other Asian markets, Macau remains the largest casino hub in the region, with a projected $28 billion in GGR for 2024. Singapore is the second-largest market, having recorded $5.1 billion in GGR for FY23, followed by the Philippines at $3 billion, and Malaysia and South Korea, each with $1 billion.
