Border business highlights Thai gaming revenue loss

A heat map of the casinos clustered around Thailand’s borders are a strong indicator of how much interest there would be if the Kingdom were to legalize gambling.

According to recent research by Rattaphong Sornsuphap, from the College of Social Innovation at Rangsit University, there are at least 32 casinos he would term as “serious” that are seeking to tap the Thai market, with most along the frontiers with Cambodia, Laos and Myanmar. That doesn’t count the many more fly-by-night operations seeking to cash in on the Thai market from dusty border towns.

Estimated total revenue of The Greater Mekong region was almost $50 billion in 2015, that’s up from $34.2 billion in 2010 and includes the IRs in Singapore and Malaysia.

Gambling in Thailand is banned, apart from the state-run lottery and through the Bangkok Turf Club, though foreign investors have expressed strong interest in Thailand as a gaming destination. Some industry insiders have forecast that Thailand could feasibly become of a similar size to Singapore, which currently generates about $4 billion in gross gaming revenue from two integrated resorts.

But in the absence of legislation at home, the border casinos continue to thrive, capitalizing on their political connections to navigate regulatory grey zones.

“In Cambodia, the areas where casinos have been cleared to open are mostly in special economic zones,” Rattaphong told AGB in an interview. He says the casinos are known to have “close ties” to high ranking Cambodian officials including political posts. “Therefore this makes progress and the management of the casinos manageable.”

According to the Cambodian government, there are 22 casinos along its border with Thailand.

The most recent opening there however has raised eyebrows and caused a minor trade dispute between the two neighbors.

The Saitaku Resort and Casino, is located within a 130 metre perimeter behind the Thai border village of Chong Sai Taku, in Ban Kruat district, some 412 kilometres from Bangkok. It is also some 160 km north of Poipet, where the majority of the border casinos with Thailand are to be found, raising questions as to the choice of location.

The casino hit headlines after activist Veera Somkwamkid insisted the property falls within the confines of Thailand in a national park. The border area has been the subject of disputes in the past, but Thailand’s National Parks Department says the property is legally on the Cambodian side of the border line.

Ban Kruat district in the Thai province of Buri Ram is the known stronghold of wealthy former Thai politician and football club owner, Newin Chidchob. He has denied any involvement in the property.

The dispute raised temperatures to the level where Thai officials initially banned all Thai nationals from crossing the border to the casino. Cambodia reciprocated in kind, causing significant economic damage to local traders who ply their wares in the district, according to the mayor of the Tambon Chanthop Phet Municipality.   

The soft opening went ahead on April 7th. Some 300 Thai VIP guests were allowed to cross the checkpoint but other Thai nationals were prevented from joining the event, which included Thai pop singers.

When contacted by AGB, the casino spokesperson said the casino was now “open” seven days a week and was offering gamblers slot machines, roulette and baccarat. She said at present there were no online sports betting games and there were no foreigners visiting the resort. She said most clientele were Cambodian, even though officially Cambodians are banned from gambling at home.

Rattaphong said the majority of patrons to the Cambodian border casinos are Thai nationals with Poipet the most popular destination due to its close proximity – just two hours by tour bus and van from Bangkok.

However, he said there was growing interest among the border casinos in targeting Chinese visitors to Thailand.

Australia-listed Donaco International for one is eyeing the China VIP segment. Earlier this month, it signed an accord with a marketing agency to bring junkets in from around the region to its Star Vegas resort in Poipet.

"We are pleased to confirm the launch of a new era at Star Vegas, with a focus on increasing visitation from international players, in order to supplement the existing healthy Thai-facing business,” CEO Joey Lim, said in a release.

Star Vegas has been strongly focused on the Thai market, signing a partnership accord with U.K. Premier League club Manchester United to pique interest among soccer-mad Thais.

Rattaphong suggested the border casinos should also look at expanding their betting options to offer online sports, especially of major league football, given its popularity. Manchester United alone is estimated to have some 19.5 million followers in the country.

In neighboring Laos, casinos are being upgraded to attract more Thai and Chinese business.

The Kings Roman Casino, just across from the Thai border marked by the Mekong River, has received millions in investment. The Hong Kong-registered Kings Romans Group runs the property in a joint venture with the Lao government and signed a 99-year lease in 2007.

The Dansavanh Nam Ngum Casino near Vientiane has also expanded, offering the types of gaming tables and slot machines that are popular among Thai gamblers, who are able to travel across the Friendship Bridge from the northern Thai town of Nong Khai.

Hong Kong-listed Macau Legend Development took over the Savan Vegas Casino in Savannakhet province last year in a deal worth $42 million. The agreement includes the right to a 50-year monopoly in three Lao provinces, including the present Savan Vegas Casino.

While casinos are banned in Myanmar, two major casinos have been operating off the coast of Tanintharyi. Others are clustered along the border with China, especially Mong La and Muse in Shan State.

But the Tanintharyi casinos came under the elected government’s spotlight in 2016 when both were reviewed under the 1899 Burma Gambling Act, which forbids casinos to operate in Burma.

The resorts, the Victoria Entertainment Resort and the Grand Andaman Resort, are located close to the Thai border with the Grand Andaman accessible by boat from the Thai city of Rayong. Senior executives of Grand Andaman have insisted their operations were legal and say they play a key role in stimulating tourism in the country.

Both casinos have been operating since the 1990s, but the National League for Democracy (NLD) led elected government in 2015 said they were under review. Local officials said they are unlikely to face court action or be closed.