Tuesday, June 28, 2022

Operators eye Thai potential


Thailand’s ongoing ban on all forms of gambling is proving a gold mine for casinos elsewhere in the region, with a growing number taking steps to specifically target the Thai VIP base. 

Renowned economist Pasuk Phongpaichit, an economics professor at Chulalongkorn University in Bangkok, estimates that 70 percent of the country’s adult population gamble regularly. 

New generations are also showing an interest. A poll last year by U-Report found that more than half of 2,280 teenagers in the country would be willing to use their own money on a betting website, even though online gambling is not permitted.

As long ago as 2013, the Bangkok Post was reporting that the “underground gambling economy” was larger than the national lottery, which was introduced in 2003 and sits alongside domestic horse racing as one of only two ways to gamble legally in the country.

Sharp growth in mobile and online gambling is also inevitable given the increasingly tech-savvy nature of Thailand’s population.

Internet penetration has rocketed by nearly 250 percent in the country over the past six years and the Global Digital Report 2019 ranked the country at No.1 for mobile banking, No.2 for cryptocurrency ownership and No.3 for mobile commerce.

The lack of casinos in Thailand has led to opportunities for neighbouring markets that embrace such facilities, especially as, according to the World Bank, the number of trips abroad by Thai nationals has doubled over the past 10 years.

Visanu Vongsinsirikul, a lecturer in Economics from the College of Innovative Business and Accountancy at Dhurakij Pundit University in Thailand, says that most VIPs from Thailand “prefer to gamble in Macau, Singapore and Australia.”

Around 15,000 visitors per month visited Macau from Thailand last year, although the number has dropped by nearly one quarter since 2016. 

Meanwhile, growing casino markets like Vietnam have experienced a surge in tourists from Thailand. According to official government statistics, visitors arriving in Vietnam from Thailand in the first six months of 2019 rocketed by 145 percent year-on-year to 245,000 – a higher rise than any other country.

Traditionally, Thais have flooded across the border to dusty Cambodian border towns, such as Poipet to gamble. Though, improved transport links and a higher standard of new properties coming online is attracting a different clientele. 

Donaco International hired five Thai junkets last year to target VIPs for its Star Vegas property in Cambodia, while Macau Legend’s Savan Legend property, a short drive over the border into Laos has a website in both English and Thai. 

Savan Legend reported a drop of HK$4 billion for 2018, with gross gaming revenue of $224 million. It said a total of 185,700 of its guests had crossed the Savan-Mukdahan border from Thailand. 

The resort is being expanded to add a new hotel wing, a pool, spa and gaming facilities, while Macau Legend is exploring further expansion opportunities in Laos.

Malaysia's Genting also recognizes the potential, opening a marketing and public relations office in the Kingdom in 2016.

In the Cambodian border city of Poipet, 95 percent of tourists are from Thailand. According to Forbes, in a good year up to $400 million in revenue has been generated across the city’s casinos.

“I think the number of Thai VIP gamblers is slightly increasing because of the increasing income, on average, and the exchange rate appreciation,” Vongsinsirikul adds. “Around 95 percent of Thai VIP gamblers love to gamble on baccarat.”

However, there appears to be little prospect of Thailand’s political establishment opening up to casinos imminently.

When an attempt was made to push through casino legislation four years ago, Prime Minister General Prayut Chan-O-cha insisted that casinos would not become a reality on his watch. In June 2019, he secured another term.

Moreover, the authorities are continuing to crack down on illegal operations, rather than turn a blind eye. During the 2018 Fifa World Cup, about 10,000 people in Thailand were arrested for gambling on the football tournament, according to Deputy Police Commissioner General Chalermkiat Srivorakhan.

Vongsinsirikul is confident though that, perhaps a decade from now, there will be a legal casino in Thailand.

He believes that a potential casino model that is similar to the UK would work well in Thailand, with “not as many” casinos as Macau, but also venues that are not necessarily linked to entertainment complexes, such as in Singapore.

That said, Thai travel preferences certainly indicate there may also be demand from Thai gamblers for an Integrated Resort (IR) casino like Marina Bay Sands in Singapore. 

Although Marina Bay Sands says that it does not track the nationalities of all visitors to the IR, the city-state welcomed 546,000 visitors from Thailand in 2018 – a 2.7 percent year-on-year rise – and Thai nationals “make up a meaningful segment” at the resort, according to president and chief executive George Tanasijevich.

Tanasijevich, who is also managing director of global development at Las Vegas Sands Corp, acknowledges that Thailand would be an “ideal location for a Las Vegas Sands MICE and entertainment-focused IR”. 

Whilst insisting that “the people of Thailand will decide” when the time is right to enter the increasingly competitive casino market in Southeast Asia, Tanasijevich would favour “a central location in Bangkok near other tourism attractions, hotels and the Central Business District”.

He says: “This would maximise convenience for tourists and the opportunity for existing businesses to benefit from the economic growth generated by our IR.”

Tanasijevich also says that, like any operator seeking to establish a base in Thailand, it would be essential to operate “in a manner that is respectful of local culture and adequately addresses any social and religious sensitivities.”

The opportunity to use such resorts to drive high-spending tourists is difficult to ignore, even for a country that already pulls in nearly 40 million foreign visitors annually.

“Casinos represent a small portion of our properties, typically less than 3 percent, but serve as a significant means of attracting foreign tourists to the markets where we operate,” Tanasijevich says.

“We aspire to develop an IR in Thailand that includes a casino that allows open access to foreign tourists and restricted access to Thai people. If granted this opportunity, foreign tourists would be the primary target customer.

“The addition of a Las Vegas Sands IR would significantly strengthen Thailand’s ability to attract substantially more high-value foreign tourists and grow an industry that is critical to the performance of its economy.”

 

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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