Sunday, June 26, 2022

Casino reform push gathers steam

The push to legalize casinos in Thailand appears to be gathering momentum, though experts say any reforms are unlikely to have much of an impact on the thriving illegal market, which is estimated at more than $5 billion a year.

Academics in the country, who focus on gaming, say there is increasing confidence that the issue of casinos will be raised again after the next general election, expected in late 2018. It would be the  most significant step in gaming industry reforms since Thailand became a constitutional monarchy in 1932.

Visanu Vongsinsirikul, a lecturer in economics at Dhurakij Pundit University, says after the election the government will have a mandate from the people that will help it push through reforms. “I'm quite sure that Thailand will have a legal casino, they will have it in the near future."

Rattaphong Sonsuphap, an associate professor at the College of Social Innovation at Rangsit University, agrees there is an increasing push for legalizing casinos. "So you ask, one year, two years? It could be one year, it could be two," he told AGB.

Apart from the state lottery and wagering through the Royal Turf Club, gambling is banned in Thailand. Prior governments have flirted with the idea of legalizing casinos, but have not succeeded, in part because they have been ousted in coup attempts or have not had a strong enough majority to implement reforms.

Since 2014, the country has been run by a military junta which has taken an increasingly pro-casino stance as it seeks to stamp out illegal gambling.

Under Thailand's new constitution the military is set to remain a major influence, with control over the Senate. A joint sitting of both the Senate and House of Representatives will have the power to select the next Prime Minister. Analysts are currently tipping present incumbent, former Army chief Prayut Chan-o-cha, to be selected as the next government leader.  

The junta is already trying to overhaul the state lottery system with the introduction of a super jackpot aimed at undercutting the illegal underground lotteries. It is now considering a payout of up to 600 million baht (US$16.6 million), about ten times the current winnings of $166,600 for a pair of 80 baht tickets, according to media reports.

The reports said a remodeled lotto is being designed to draw punters away from underground gambling activities "estimated to be worth several hundred billion baht a year."

However, reports added it was unlikely the new scheme would come into being in the near term. Major General Chalongrat Nakartit said the scheme would be put to the board of the Government Lottery Office (GLO) in September. The GLO is required by law to forward 28 percent of revenue to the Finance Ministry, according to local media reports.

But for the reforms to go forward, it will require an amendment to the 1974 Lottery Act that presently disallows "rollovers". Draft amendments to the legislation have been forwarded to the Thai Cabinet and are awaiting approval.

The new proposal has the backing of Sungsidh Piriyarangsan, dean of the College of Social Innovation at Rangsit University and also a member of the National Reform Steering Committee. Sungsidh said the government should move ahead with the proposals or see more Thai gamers travelling outside the country. But he also acknowledged there remains some social divisions over the wider reforms, where there remains a strong undercurrent against gambling in the largely Buddhist country.  

In terms of casinos, Visanu says early planning has placed at least one casino in the greater Bangkok area and another in the resort island of Phuket.

Las Vegas Sands has been studying the market for several years, with CEO Sheldon Adelson and senior executives from Marina Bay Sands Singapore visiting in 2015 with an offer to develop a US$5.0/6.0 billion dollar casino and hotel and entertainment complex in Bangkok.

The company has engaged in talks with several Thai governments dating back to the former Prime Minister Thaksin Shinawatra, before he was ousted in a coup in 2006. At that time the focus for a casino was a hotel complex in Jomtien Beach 150 kilometres from Bangkok on the eastern coast.

Analysts said Adelson also held talks during the administration of Prime Minister Yingluck Shinawatra - the younger sister of Thaksin, before her government was overthrown in the May 2014 coup.

Rattaphong said in the most recent negotiations Las Vegas Sands was in talks over a vacant property in central Bangkok currently owned by the debt ridden State Railway Authority of Thailand (SRT).

The SRT-owned land located at Makasan is well placed to draw the foreign tourism market through easy access from Bangkok's international airports - Suvhanabhumi International and Don Muaeng Airport.

However analysts, who are also acting as advisers to the Thai government, said the company is facing some push back in government circles as it is seeking a monopoly license.

A spokesperson for Marina Bay Sands in Singapore told AGB the casino operator was "continuing to monitor the situation in Thailand".

Other plans may include up to three casinos in Thailand; on the outskirts of Bangkok, in the  Pattaya Beach Resort area and in Phuket.

Rattaphong says the new casino, hotel and entertainment complexes would largely be tailored to the tourist market, which will not help shrink Thailand's thriving traditional underground  market. The final model to be adopted and whether it will restrict local access is still to be determined, however traditional underground gambling is largely focused on board and card games.

Sungsidh of Rangsit University's College of Social Innovation, who says legalizing casinos in Thailand could generate up to $11.8 billion per year, says there are as many as 170 underground casinos operating in Bangkok. These range from 10 "permanent" operating locations, to more than 100 mobile casinos that open for a few days before relocating.

Sungsidh estimates turnover from the underground casinos at between $5.0 billion and $5.56 billion, earning profits of more than $1.05 billion and paying bribes of between 5.0 percent and 20 percent of turnover.

Rattaphong says the underground casino operations, largely targeting Thai customers, would be expected to continue.

A gaming industry analyst, on background, said the moves to legalize casinos requires the backing of the most senior members in the Thai government. "It depends on the government [over] the right time to introduce this policy," he said.

The late monarch King Bhumipol Adulyadej, who passed away last year, opposed an expansion in the gaming sector.

But analysts say the new monarch, 64 year old Maha Vajiralongkorn, may be more supportive of reform.

The three casino models under review include looking at a monopoly such as Genting’s integrated resort in Malaysia, or that of Singapore, which has two IRs. There is also study of a  Macau-style model offering an entertainment complex and several casinos.

The Thai public, in surveys, has shown increasing support for casinos. But the issue remains divisive with vocal groups opposed to gambling also effective at lobbying government against reform.

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

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