Southeastern Asia tourism powerhouse Thailand is edging closer to the launch of its casino industry following the release of a draft casino bill. Casino operation juggernauts are already showing interest in the market, including the likes of MGM, Caesars, Wynn, Sands and Galaxy.
Thailand’s efforts to legalize casinos have reached a promising juncture after the Council of State took a transformative step by releasing a 22-page draft casino bill with a call for a public feedback period that will end on 18th August 2024. If the draft is to be enacted, casinos will be part of a larger Entertainment Complex, which is expected to boost the country’s revenue by $5.14 billion (187 billion baht) every year. According to a Maybank Securities report published in April, the expected annual casino revenue input is about 1% of the nation’s GDP.
But before it’s enacted, the draft casino bill will undergo a further review process that could involve amendments before being debated in the Thai parliament. The draft proposals include casinos having a 30-year licensing period plus a possible ten-year renewal extension. This broader strategy targets large-scale entertainment venues that will expand the tourism sector and establish Thailand as an essential contributor to the global casino market.
The potential locations that will host these entertainment complexes include popular tourist destinations in the country, such as Greater Bangkok, Chiang Mai, Chonburi (Pattaya), and Phuket. Additionally, the bill states that the selected establishments areas must have four or more entertainment businesses. The cited areas have beautiful resorts, amusement parks, beaches, cultural promotions, and convention centers.
Among the critical components of the draft casino bill is that establishments will be strategically established approximately 100 km near airports by Thailand-registered operators with a paid-up capital of a minimum of $283 million (10 billion baht). This is intended to maximize accessibility and hence attract an international clientele.
The Southeast Asian country plans to create a regulatory body that will have its headquarters in Bangkok, where it will operate under the strict supervision of a policy committee with the Prime Minister as the chairperson. The outlined tasks of the proposed committee will be regulation, supervision, promotion, control, and support of Thailand’s casino sector.
Per the Act, the regulatory committee will oversee the establishment and management of these entertainment venues countrywide. The committee will see to it that key casino policies are formed. They will include the issuance of licenses, tax rates, management guidelines, size of the casino floor space, type of permitted businesses, entry levies, and the criteria of employees running the facilities.
Following this legalization of casinos, the country will create many job and business opportunities for the locals and generate significant revenues of up to $12 billion annually in the Thai tourism scene, which is essential for long-term economic growth and stability. Such a windfall will be a much-needed shot in the arm to Thailand’s enormous $500 billion economy, of which the tourism sector makes up 12%.
Thailand’s new casinos will compete with other international tourist destinations like Japan and emerging markets in the UAE, whose casino industries are expected to make their debut in the next couple of years.
On the brighter side, major global casino operators have already expressed interest in participating in the Thailand casino market. The draft casino bill proposes a 17% tax on Gross Gaming Revenue (GGR) and an entry levy for citizens similar to the Singapore model. This is seen as a promising chance to potentially have a higher ROI. The interested global leading companies looking to have a piece of the casino action in Thailand include:
These interested companies are already in contact with government agencies and are working with various Thai conglomerates to understand potential investment opportunities. Hong Kong-headquartered Galaxy Entertainment Group Ltd is also among the casino industry giants seeking entry into the country as it prepares to unveil its market.
So far, none of the potential investors have any issues with the investment conditions in the proposal. The contenders have also not expressed any concern about the proposed requirement, which states the entertainment business must include at least four other types of entertainment besides the casino. Based on the proposals for the planned entertainment complexes, only up to 5% of the total real estate area may be casino gaming. Still, the gambling part of the business is projected to generate 80% of the collected revenue.
After the public consultation and feedback period is over, the bill will go through the cabinet’s approval and then be debated in Thailand’s parliament. It may undergo some amendments before receiving the final green light. The policy committee led by the Prime Minister will oversee the implementation process, which will include gambling regulations.
Operators will be expected to fulfill financial requirements such as an initial license fee of 141.9 million dollars, an application fee of 100,000 baht, and an annual operation fee of 1 billion baht. For nationals, a 5000 baht fee will be required for each casino entry.
Based on a report presented in the Thai parliament, the presence of casinos in the Southeastern Asian nation would boost the average expenditure per tourist by 52%. Additionally, the new casino sector could create 30,000 employment opportunities for locals in each integrated casino resort.
Blackjack
Slots
Roulette
Baccarat
Craps
Poker
