A draft of the Thailand Entertainment Complex Act, which would establish a legal casino industry in the country, is expected to reach the cabinet this year and go to parliament for debate early next year.
The legislation would introduce five or more integrated resorts (IRs) with gaming. Suggested locations include Chiang Mai, Phuket, and the Eastern Economic Corridor. The capital city, Bangkok, could host two IRs.
The plan is touted as a way to boost tourism, increase international investment and add new jobs. Licensed casinos also would collect income now spent underground or at casinos outside the country.
The proposal got high marks during a public comment period, with 82% of participants expressing support.
The criminal element
But opponents say legal casinos could open the door to gambling addiction and financial crimes. A January report from the UN Office on Drugs and Crime said casinos and other “high-cash-volume businesses” have long served as portals for underground banking and money laundering in Southeast Asia.
Opportunistic gangs look for “the point of least resistance,” said UNODC representative Jeremy Douglas. And they’re nimble, pulling up stakes and relocating when the heat is on, as recently seen when offshore gaming operations decamped from the Philippines. Syndicates move on to places where they can “take advantage and not be held to account,” Douglas said.
James Warren, lecturer at Mahidol University International College in Phuttamonthon, told Voice of America (VOA) that critics say “casinos will encourage problem gambling, debt and related crimes. [But] on encouraging criminals to come to Thailand, this largely depends on how well regulated the casinos are”.
But crime is not the sole concern. He conceded that some Thai residents and legislators oppose gambling because it “contravenes Buddhist precepts.”
He added, “Mooted benefits … are that [a regulated industry] would reduce corruption and the underground economy, while creating jobs, encouraging investment and raising tax revenues. The most recent proposal is part of the Pheu Thai government’s stated aim of bringing the underground economy overground.”
A speedy process
A number of global gaming operators are sizing up Thailand, looking for the next greenfield opportunity. The list now includes big guns such as Galaxy Entertainment Group, MGM Resorts, Las Vegas Sands and Wynn Resorts.
The current draft bill would require each applicant to pay 5 billion baht (£113 million/€136 million/$146 million) to register, and annual billion-baht payments. Initial 30-year licences would be renewable in 10-year increments.
In the past, lawmakers have expressed the hope that Thailand could open its first IRs in record time, before Japan’s first casino debuts in 2030.
“If approved, we expect the first such complex to open by fiscal 2029,” tourism expert Boonyakorn Amornsank told the Bangkok Post last spring. He added that the proposed gaming tax rate of 17% is more than competitive with Singapore, Malaysia, the Philippines and Macau, which carry mass-market levies from 25% to 40%.
But deputy finance minister Julapun Amornvivat says the government is in no hurry.
In comments last month to the Post, he laid out a complex approval process that includes review by “all stakeholders […] in line with the legislative process”.
That would be followed by an independent feasability study assessing job creation and the potential impact on host communities. The ministry would then form a policy board to hammer out the final regulatory framework.
Best-case outcomes
“The main purpose of proposed casinos is to boost tourism and, in particular, lure back the Chinese tourists that were instrumental in Thailand attracting 40 million tourists in 2019,” Warren told VOA.
Singapore-style IRs are expected to lure the most patrons. “It’s the experience around gambling,” Omri Morgenshtern, CEO of Asia travel agency Agoda, recently told Reuters. “Think about Macau and Vegas. Usually it comes with crazy shows, food and amazing hotels.”
Meanwhile, a report from the World Bank suggests Thailand can expect gross domestic product growth of 2.4% for 2024, up from 1.9% in 2023, and 36.1 million tourists, a healthy increase from 28.2 million last year. The report expects 41.1 million tourists in the new year, “surpassing the pre-pandemic level as Chinese visitors return in larger numbers.”
“As the clock ticks,” said World Bank Thailand manager Fabrizio Zarcone, “it will be critical to rejuvenate its economic growth. Thailand’s secondary cities hold significant untapped potential. That’s key to getting the country back on the path of sustainable development.”
Tourism, which is vital to the Thai economy, has yet to fully recover from the Covid-19 pandemic. In 2019, tourist arrivals accounted for 11.5% of total GDP. In 2020, according to the United Nations in Thailand, the country forfeited some 1.6 trillion baht in GDP.
Original article: https://igamingbusiness.com/casino/pros-and-cons-of-thailand-casino-plan/
