Wednesday, November 06, 2024 - Login

Casinos still seen as a pipedream


News last month that Thailand may consider legalizing gambling has been met with scepticism by those who know the market well, with most saying casinos are not likely to open in at least the next decade.








Prime Minister General Prayut Chan-o-cha raised the prospect of liberalizing what could potentially be one of Asia’s most promising gaming destinations as a way to solve rampant illegal gambling.




Several Covid-19 outbreaks have been blamed on illegal gambling dens and Prayut announced the formation of two committees to study the situation in Thailand. One will focus on authorities’ investigations of illegal gambling and the other will investigate how illegal border crossings are handled.




Some politicians from minority parties have also in the past year called for the market to be opened as a way to rebuild the Covid-19 shattered economy. 




Mongkolkit Suksintharanon, leader Thai Civilized Party, last summer suggested that legalization could bring in about THB5-6 billion ($167.4 million) in tax revenue. 




Thailand has long been on the radar of global casino companies, including giants such as Las Vegas Sands. The country attracts some 40 million tourists every year, making it one of the most visited in the world. It also has a local population of almost 70 million and the eighth-largest economy in Asia. Almost a fifth of its gross domestic product comes from tourism.




Talk of potential legalization has been on the cards for several decades, in particular under former Prime Minister Thaksin Shinawatra. However, the proposals never progressed and industry insiders say this time around is unlikely to be any different. 




“Thailand is an enigma, it’s a very conservative society,” said James Kaplan, CEO of Destination Capital. “The whole religious conservative family side really pervades the culture and Buddhism is the fundamental base of their education and belief system. Gaming is really a bad thing for them.”




Kaplan, who has more than 30 years of experience in the hospitality industry, with a focus on Asia, said it was likely Prayut was throwing out the comments as a trial balloon to test public reaction. The immediate feedback from the public has been negative.




There is a section of the Thai population who like to gamble and are travelling overseas and across into neighbouring countries to do so. There is also a large illegal market, put at THB122.5 billion a year in a 2019 Chulalongkorn University Study, but the majority of people are still opposed to casinos.




Another executive said he didn’t believe there was enough political willpower to risk inflaming public opinion on the issue.




Beyond conservatism, the issues get more complicated. Many of the illegal gambling dens are known to be under the protection of local police and powerful figures who are making too much money to want to see them shut down. 




Academics quoted in a recent Bangkok Post article claimed that the police force needs a fundamental overhaul if there is to be any success in clamping down on illegal activity. 




Thais also control many of the border casinos and their interests would be hurt by opening legal casinos at home. 




There is also scepticism over how foreign investors would be able to participate in the market were it to open to outside investment. At present, foreigners cannot own land and foreign investors are restricted to owning 49 percent of a Thai company in most circumstances. That’s not a business model that suits many international operators. 




thailand, casinos, gambling




“Money is going out of the country so from that perspective it makes sense if you regulate it and control it,”




Another issue the government would need to consider is the rationale for having casinos, which would play a major part in deciding the shape of the market. If they are seeking to regulate and stamp out illegal activity, as Prayut seems to be suggesting, building multi-billion dollar integrated resorts aimed at tourists is unlikely to be effective. 




If however, the government is seeking to refresh its tourism offering and avoid losing ground to other jurisdictions in Asia, then IRs would be the way forward.




“Money is going out of the country so from that perspective it makes sense if you regulate it and control it,” Kaplan said.  




“Thailand needs to reinvent itself. You need gaming as a way of bringing in fresh activities and a fresh new market, as well as spending on infrastructure so it rises the tide for everyone.” 




In the past, projects have been mooted for areas such as Pattaya, on the coast a few hours drive from Bangkok, the island of Phuket and Chiang Mai in the north. 




Although industry sources contacted by Asia Gaming Brief said there was a very low probability of Prayut moving ahead, some also acknowledged that unlikely government changes of heart had happened in the past and post-Covid there are few sacred cows. 





Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

Contact us

ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264

Asia Gaming Brief