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What Legalisation Of Casinos Means For Thailand? Casino
Mrinal Gujare
Posted on 04 Jul, 2024
By Mrinal Gujare
On 04 Jul, 2024
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By Mrinal Gujare
On 04 Jul, 2024
Share

What Legalisation Of Casinos Means For Thailand?


Under the Gambling Act BE 2478 (1935), gambling is illegal in Thailand, despite betting on horse races, government-sponsored lotteries, and some Muay Thai fights are allowed. For over a decade, there have been ongoing discussions about the potential legalisation of casino gaming in Thailand. Neighbouring countries such as Laos, Cambodia, Malaysia, and Singapore have already legalised casino gaming to attract tourists, diversify their entertainment offerings, and boost government revenue. 

On 12th January 2023, the Thai House of Representatives approved a report by a special committee studying the feasibility and economic benefits of legalising gaming in Thailand, including the introduction of integrated resorts (IRs) with casinos. This comprehensive report not only outlines various gaming modalities for potential legalisation but also addresses social concerns related to gambling’s negative impacts.

The approval of this report could be the initial step towards legalising IRs with casinos under an appropriate legal and regulatory framework in Thailand. The feasibility report suggests that one or more IRs with casinos be located in one of the 22 tourist provinces or the Eastern Economic Corridor (EEC).  Media reports mention five potential regions for these IRs. The report also proposes restricting casino access to foreigners and mature and wealthy Thais, a point likely to be debated during the legislative approval process.

Interestingly, the existence of IRs with casinos is not the primary concern for some sectors of Thai society. Instead, the real concern lies in the report’s recommendation to legalise online gambling, including online bingo, baccarat, betting on government lotteries, the stock exchange index, foreign exchange rates, and the outcomes of international and local sporting events, such as horse races and esports, and even elections.

Thailand’s main civil aviation hubs, such as Bangkok, stand to benefit significantly from legalising casino gaming. Bangkok is already a fully integrated entertainment area, offering hospitality, retail, and leisure activities. Other tourist areas like Phuket, Pattaya, and Chiang Mai, although smaller in scale, also have potential to integrate well with IRs with casinos. Medium-sized cities with international flights could also see increased tourist visitation, particularly from China, if they host IRs with casinos.

If Thailand proceeds with legalising casino gaming, establishing a robust legal and regulatory framework is essential. This framework is necessary not only to comply with international standards and protect citizens but also to attract large casino operators and their investors. 

The Thai market will likely attract both domestic and international visitors, with Asian tourists being a primary target due to their propensity for gambling. Legalising and regulating credit for gaming, as done in other jurisdictions, could make Thailand a significant player in the VIP gaming segment, especially given the recent crackdown on VIP gaming in Macau. 

Thailand has a unique opportunity to capture a substantial portion of the Chinese VIP gaming market, estimated at $1 Trillion in wagers and $30 Billion in gross gaming revenue annually. Thai decision-makers should seize this opportunity while addressing other relevant issues in legalising casino gaming.

ALSO READ: Live Poker Rooms In Thailand

On 28th March 2024, Thailand’s path to regulated casinos took a significant step forward with a vote in the nation’s 500-member House of Representatives. In this vote, 253 out of 257 lawmakers approved a proposal recommending the legalisation of casinos within large entertainment complexes. The plan now moves to the cabinet for final approval.

Prime Minister Srettha Thavisin has expressed strong support for the initiative, emphasising the benefits of attracting foreign investment to Thailand. “The entertainment complexes will enhance the country’s tourism industry,” Srettha announced on X. “We have wasted enough time and opportunity in the past. The government will reclaim lost time and turn it into an economic opportunity for the country and its citizens,” further added the Thai Prime Minister.

What does Thailand’s proposal entail?

The 2023 study on legalising gaming in the country estimates that regulating casinos could boost Thailand’s tourism revenue by nearly $12 Billion. Casinos are expected to be converted into top-of-the-line entertainment complexes or integrated resorts, thereby contributing to regional revenues and reducing unemployment. The proposal suggests a 17% tax on gross gaming revenue, making Thailand one of the lowest tax regimes in the region. It also recommends an initial 20-year license duration, renewable every five years, and requires larger casino complexes to invest a minimum of $2.7 Billion in Thailand for approval.

Experts predict casino approval within three years

Industry experts expect approval for IRs within three years, with major players like MGM, Las Vegas Sands, and Hard Rock Asia expressing interest. In an interview with iGamingBusiness.com in September 2023, Destination Capital CEO James Kaplan expressed optimism about the current legalisation effort, citing Thailand’s need to raise revenue due to public debt reaching 58% of GDP. He emphasised that Thailand could capture money currently lost to border casinos and tax it through legalised and regulated casinos.

Major casino brands eye Thailand

Global casino brands are eager to enter the Thai market. At the JP Morgan Gaming, Lodging, Restaurant and Leisure Management Access Forum, Bill Hornbuckle, president of MGM Resorts International, reiterated MGM’s interest, noting the early stages of the process and the need for a robust regulatory regime. Hard Rock International also expressed strong interest in a multi-billion dollar IR in Thailand, with Hard Rock Asia president Edward Tracy highlighting the potential for convention-based IRs in Bangkok and Phuket.

Tracy noted Hard Rock’s long-standing presence in Thailand since 1991, with cafes in Bangkok, Phuket, and Chiang Mai, and a hotel and cafe in Pattaya, all in partnership with local entities. He believes that a Bangkok IR could have a budget of $3.5 Billion to $6 Billion, with $1.5 Billion to $2.5 Billion for Phuket.

Could Thailand rival the Philippines?

Thailand’s position as a regional business hub and global tourist destination suggests it could become a competitor to the Philippines in the gaming sector. The Philippine Amusement and Gaming Corporation (Pagcor) has ambitious plans to establish the Philippines as Southeast Asia’s primary gaming hub. To surpass the Philippines, Thailand would need to address several challenges, including potential public and business opposition to special zones for IRs and exemptions from Thai ownership requirements.

Despite these obstacles, Thailand has a unique opportunity to become one of the world’s most successful gaming destinations. Crucial hurdles include overcoming corruption (Thailand ranks 101st in Transparency International’s Corruption Perceptions Index), conservative opposition from the Buddhist clergy, and underground casino stakeholders. Recent polling indicates that most Thais support casino legalisation, and the current king and the Thai public back the initiative. 

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