Lawmakers in Thailand have proposed launching a legal casino industry, with five properties across the country to start. A House panel believes the initiative will help bring an end to illegal operations, take advantage of a strong appetite for gambling in the country, and benefit the government through new taxes. The 60-member casino committee includes 15 cabinet members and 45 representatives of other parties.
According to the news website ThailandTV, a 30 percent tax rate might keep investors on the sidelines, though the addition of online gaming should boost the market’s appeal. Las Vegas Sands is already said to be eying the jurisdiction.
Late last month, Pichet Chuamuangphan, vice chairman of the casino committee, told local media that the proposal is already before government policymakers.
The plan would likely authorize casinos in Greater Bangkok; Chiang Rai or Chiang Mai to the north; Pattaya City to the east; Phuket, Phang-nga or Krabi to the south; and Ubon Ratchathani, Udon Thani or Khon Kaen to the northeast. The government has already chosen one location, Mae Sot, Tak Province, in western Thailand, for an integrated resort (IR) complex.
According to Inside Asian Gaming, a Mae Sot IR would compete for customers with gaming halls across the border in Myanmar. The Bangkok Post quoted a committee member who said Mae Sot is “almost ready” to host such a facility, thanks to recent upgrades to cargo transport and immigration checkpoints, plus a new four-lane highway.
Committee Vice Chairman Boonlue Prasertsopar called casinos part of a broader plan to create an economic corridor along the border. Residents in the vicinity of Mae Sot are reportedly enthusiastic about the idea—meaning one less obstacle for legislators and developers, who often face local opposition to such plans.
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Along with Indonesia and Brunei, Thailand is one of only three ASEAN nations without a legal casino industry, although half of its adult population is said to gamble illegally—with a population of almost 70 million, Thailand is the world’s 20th most populous country in the world. Casinos in Poipet, Cambodia, another border town, host scores of Thai customers who cross over to gamble.
Pichet said the committee has studied the business models of Singapore and Malaysia in their planning. He believes legal gaming halls would draw more tourists to Thailand as well as potentially generate millions of dollars in annual revenue. They would also create jobs and boost local economies.
GGRAsia quizzed several analysts about the wisdom of legal gaming in the country. Ben Lee, managing partner of IGamiX Management and Consulting Ltd., said the most important element is building public support for the concept—a lesson learned the hard way by developers trying to enter Japan.
“Unless done properly and transparently after local sentiments have been addressed, we could see the issue mired in petty politics, just as in Japan,” Lee said.
Michael Zhu, senior vice president for international operations, planning and analysis at The Innovation Group, told the news outlet that “reaction and/or opposition from cultural, religious and other social groups” in Thailand “remains to be seen.” The country’s populace is primarily Buddhist.
Andrew Klebanow, principal at the C3 Gaming Group, told GGRAsia he was “pleased” that the committee looked beyond the capital city of Bangkok to launch the new industry. “By selecting locations in five provinces, they are adhering to their primary goals, which are to create jobs, attract foreign visitors and generate additional tax revenue.”
Lee agreed that “most of the five zones would target the locals,” which would “prevent them from going to the border casinos” in Myanmar and Cambodia.
Of the 30 percent tax—assuming it refers to a tax on gross gaming revenues (GGR)—Zhu said the rate might be “demanding for prospective developers and operators, especially within the context of prevailing tax rates in other emerging markets in the ASEAN countries such as Cambodia and the Philippines: it would be even higher than that in Singapore.”
He added, “A demanding tax regime for legal casinos may become counter-effective in fighting against illegal, underground gaming venues.”
A 30 percent “headline rate” of tax would be “high, but not unreasonable,” said Klebanow.
“It also remains to be seen if certain marketing expenses can be deducted from the headline rate as in some other jurisdictions.”
Klebanow said a feasibility study “will reveal just how large the overall market will be. If there are reasonable regulations, allowing developers to program their facilities to best meet the needs of the market rather than the government telling them what to build, and the ability for adult residents to visit these casinos without onerous restrictions,” Thailand can create a “successful integrated resort industry.”
The tourism website CABI.org notes that Covid-19 has left Thailand “in a state of extremely low cash flow,” and legal casinos would help the country “catch up on much-needed funds.”
Casinos were outlawed in Thailand decades ago, with the passage of the Gambling Act of 1935. Buddhism precepts consider gambling one of four paths to ruin. An old Thai proverb states, “Ten lost to fire is not equivalent to one lost in gambling.”
However, a 2014 survey revealed that close to 43 billion baht (US$1.2 billion) was wagered in Thailand on the World Cup alone.
To enter a Thai casino, gamblers would have to be at least 20 years old, and also offer proof of income. Government officials would be barred from entering casinos unless they carry a special permit.
