Las Vegas Sands eyes Thai casino, but faces uphill battle

Las Vegas Sands’ Chief Executive Officer, Sheldon Adelson, has offered to spend up to US$6.0 billion on a 450-room entertainment and casino complex in central Bangkok, but local support for casinos remains far from certain, even though senior figures have thrown their weight behind legalizing gambling in the Kingdom.

The talks, in mid-June, were the latest efforts by Adelson’s Las Vegas Sands to break into the market, according to sources close to the situation. The plans were presented to senior Thai ministers, including Finance Minister, Sommai Phasee, who was at the centre of previous discussions with the U.S. gaming giant.

Gambling is illegal in Thailand apart from through the state lottery and the Bangkok Turf Club, however, it remains extremely popular with numerous illegal gambling dens spread throughout the country. Thais are also frequent visitors to border casinos in neighbouring Cambodia and Laos where casinos are legal.

According to a study reported in local media by academic Sungsidh Poriyarangsan, who is also a member of National Reform Council, legalizing casinos could generate about 400 billion ($11.8 billion) to 500 billion baht per year. That would create a market almost double the size of Singapore.

Las Vegas Sands’ executives said their latest Thai proposal was part of plans to develop several complexes across Asia, similar to the company’s iconic Marina Bay Sands property in Singapore.

A key part is the promotion of Meeting Incentive conference and Exhibition (MICE) business, a major draw-card in Thailand’s tourism sector, with a development model incorporating a casino, but not dominating the project.

But many Thais remain opposed to legalized casinos. Recent academic surveys indicated 35 percent in strong support for a project similar to that proposed by Las Vegas Sands, but with 55 percent opposed and the remainder uncertain.

 After initially remaining on the sidelines, Prime Minister Prayut Chan-o-cha, has now also come out against the idea, saying the proposal needs further study.

Adelson, now 81, had been in talks with former Thai Prime Minister and telecommunications tycoon Thaksin Shinawatra, who was in office from 2001 until being ousted in a September 2006 coup. The plans then were to build a casino in the seaside resort of Pattaya 150 kilometers from Bangkok at the Ambassador City Jomtien Resort.

Since then Adelson has also approached former Prime Minister Samak Sundaravej, who took office from 2008. Samak was aligned with Thaksin, who fled Thailand in 2008 to avoid a jail term for corruption.

Adelson also held talks during the administration of Thaksin’s younger sister, Yingluck Shinawatra, elected in 2011 and ousted by the military in a coup in May 2014. A key person in the latest talks is the current finance minister, Somai Phasee, also a member of the Samak Cabinet in 2008-2009.

The most recent Bangkok talks included President and CEO of the Marina Bay Sands, George Tanasijevich, according to sources familiar with the negotiations.

The possible location for the casino and entertainment project is land owned by the Finance Ministry and the State Railways Authority of Thailand, which faces heavy debts.

Singapore-based Marina Bay Sands confirmed to Thai reporters the casino operator had expressed an interest in managing a casino and convention complex in Thailand.

The casino, a model of which was presented in talks in Bangkok, would be combined for meetings, incentive travel, conventions and exhibitions (MICE).

“For Thailand we would love to have an integrated resort at a place close to the city centre of financial centre near the airport,” Marina Bay Sands vice president for communications Krist Boo told The Nation newspaper.

Thailand’s latest casino debate has been led by the National Police Chief, General Somyot Paompanmoung. It was also taken up by members of the military-appointed National Reform Council (NRC) aimed at putting forward proposals for social and economic reform.

General Somyot was cited by media as saying a website will be launched on Sept. 1st outlining the pros and cons of casinos. General Prayut has since told his police chief to stop speaking out in favor of casinos.

The underground casinos in Thailand are largely controlled by local station police. Since the Thai Military came to power, there have been stepped up raids on the illegal casinos with small time operators having to close down operations to avoid arrest.

The Thai media has been awash with rumours over the proposals, including suggestions that a senior Thai military figure was behind the push to lift the ban.

In a commentary, “The Nation” newspaper asked whether Thailand needed the funds “to help prop up the economy,” or stop the outflow of money to casinos outside the country, or rid Thailand of bribery from illegal casinos.

“Before we ask the question whether casinos should be legalized, we should ask if we get the expected benefits. If the answer is yes, we could go ahead with legalizing casinos,” the commentary added.

Debate has also centered over the style of casino after the proposal by Las Vegas Sands for an entertainment complex and casino and the extent to which locals would have access.

Dr Visanu Vongsinsirikul, a lecturer in economics at Dhurakij Pundit University, says large entertainment complexes and casinos are less appealing to Thai gamblers. Visanu, who gained his doctorate in the United Kingdom, said if Thailand moved ahead to legalize casinos, the British model of small casinos was more likely to succeed with local gamers.

He says the smaller casinos are in line with Thais of lower income levels. The middle-to-low income gambler prefers to travel to Cambodia and other neighbouring countries. “If they want to set up a legal casino I think the small casino is more suitable than the entertainment complex,” he told AGB.