On December 2, Thailand’s House of Representatives OK’d the creation of an “extraordinary committee” to study legal gambling in the country. The 60-member group will study the issue for 90 days and then issue a report.
Michael Zhu of The Innovation Group told GGRAsia that Bangkok would be an optimal location for a large-scale integrated resort (IR), given its “local/domestic base population” and income level. He predicted that locals would generate approximately 30 percent to 40 percent of annual gross gaming revenues.
“I believe these segments would remain solid,” he said.
Bangkok, the capital city of Thailand, is also the most populous, and has “better infrastructure and connectivity than any other city in Thailand … to accommodate more tourist and other business volumes,” Zhu added. The city’s “diversified economy and other resources would likely help mitigate the social impacts of casino gaming should an IR be established in the city.”
Other promising locations are the seaside town of Pattaya, about 90 miles from the capital, and the popular holiday island of Phuket, said Brendan Bussmann of Global Market Advisors. He added that Thailand should not emulate Japan’s “hub-and-spoke mentality,” which strives to “force tourism” in the country. Far better to build on the strong foundation of existing destinations and take advantage of already strong tourism, he said.
A 2016 study from Rangsit University estimated a legal casino industry could generate up to $3 billion a year in tax revenues. But as Bussmann told GGRAsia, “The market opportunity will have shifted since those studies due in part to additional facilities in Southeast Asia and also due to the shifting geopolitical winds from Beijing.”
Zhu cautioned that the market could be at least 20 percent smaller than it might have been pre-2019, due to the Covid-19 pandemic and China’s latest crackdown on cross-border gambling. The latter was recently demonstrated by the arrest and imprisonment of junket operator Alvin Chau and the closure of his Suncity VIP rooms in Macau.
“If I were allowed to take a guess, I would think the market size (post-Covid) is likely to be about 70 percent to 80 percent of the pre-Covid potential, reflecting discounts primarily on the international side,” he said.
If a Thai casino industry plans to court Chinese patrons, “the market needs to be completely above-board to have an opportunity,” Bussmann warned. “Even then you will likely have problems getting [Chinese] money into the market.”
There’s certainly an appetite for gambling in the country, according to 2019 media reports from the country’s Centre for Gambling Studies and Centre for Social and Business Development. Those reports indicated that 57 percent of Thailand’s adult population had taken part in gambling activities over a 12-month period. And prior to the pandemic, casinos in Poipet, Cambodia, relied on Thai nationals who crossed the border to gamble there.
The Covid-19 pandemic may have helped revive the issue of legal casinos; Prime Minister Prayut Chan-o-cha said earlier this year that he would consider it to discourage underground gambling dens, which were seen as potential virus spreaders.
According to news site Thaiger.com, 310 MPs voted in favor of forming the new committee, with nine against and 10 abstaining. The committee will include 15 cabinet members and 45 other lawmakers. They will assess the “moral issues” related to casinos as well as regulation and taxation, Deputy Prime Minister Wissanu Krea-ngam told the Bangkok Post.
“But this is not the first time we have been at this place in Thailand,” Bussmann noted; in 2015, plans for a Pattaya casino went nowhere. “Let’s see if we get the chance for it to move forward.”
