Thailand Explores Legalizing Casinos for Tourism
BANGKOK – Thailand has taken a significant stride toward the potential legalization of casinos, a move that would position it alongside other regional gambling destinations as the country seeks to reinvigorate its tourism sector.
In the previous month, lawmakers in the lower house approved a report exploring the establishment of an entertainment complex featuring a casino, with potential locations including Bangkok.
Industry giants like Las Vegas Sands have expressed interest in Thailand, where previous attempts by governments to legalize casinos failed.
Thailand’s Tourism Dilemma: Casinos as Remedy?
Thailand’s Tourism
The coronavirus pandemic has reshaped the landscape, with Thailand welcoming only approximately 430,000 foreign tourists in 2021, just 1% of the 2019 total. Before the pandemic, tourism accounted for nearly a fifth of the country’s GDP, and casinos have been suggested as a potential remedy for the sector’s woes.
The report, which also outlines conditions for Thai residents and foreigners to visit casinos, is now set to be considered by the cabinet. Popular games in casinos like baccarat and roulette have drawn a significant number of international tourists in the past.
Currently, nearly all forms of gambling, except for horse racing and a state-administered lottery, are prohibited, reflecting the deep-seated Buddhist values in Thai society. Making an exception for casinos would open the door to international operators.
Gaming Giants Eye Thailand Expansion Plans
Las Vegas Sands CEO Rob Goldstein mentioned, “We’re certainly looking hard at Thailand” during an earnings call in January. He expressed a desire to establish a presence in the country.
MGM Resorts International has also hinted at potential acquisitions to enter the market.
To attract multinational casino operators, the government may introduce incentives. The report from the special legislative committee that drafted the proposal suggests that casinos could generate at least 100 billion baht ($2.89 billion) in annual tax revenue.
Strong Public Opposition to Legalization Continues
Nonetheless, public opposition to legalization remains strong, with only 39% of respondents in favor and 57% against, according to a January 2022 poll by Thailand’s National Institute of Development Administration.
Critics, including the Stop Gambling Foundation lobbying group, argue that the report minimizes the negative aspects of casinos.
Thailand has witnessed the consequences of legalizing activities previously deemed vices, such as the decriminalization of private marijuana cultivation last June.
While recreational marijuana smoking remains prohibited, regulations have not deterred an increase in abuse.
Prosperous Gambling Resorts Thrive in Asia
In contrast, gambling resorts in other parts of Asia have thrived. Genting Singapore reported a roughly 170% year-on-year increase in net profit to SGD 256 million ($191 million) during the second half of last year, with its casino segment’s revenue doubling thanks to an influx of overseas tourists.
In Macao, the only Chinese region where gambling is legal, the casino industry has rebounded significantly, with casino revenue rising 83% year-on-year to around $1.4 billion in January alone. The Lunar New Year holiday saw approximately 450,000 tourists visit Macao, according to government statistics, with 265,000 arriving from mainland China.
Sands China and MGM China Holdings, Macao’s two subsidiaries, were able to renew their casino licenses last year despite tensions between the U.S. and China.
Macao plans to offer tax breaks to casinos catering to foreign visitors, and operators are collaborating with the government’s tourism vision by expanding non-gambling attractions to attract a broader range of guests.
Challenges in Asian Casino Diversification
Meanwhile, China has intensified efforts to crack down on junket operators that bring high rollers to casinos.
For casino operators seeking to diversify beyond Macao, the Asian landscape presents various challenges. Japan is considering allowing casinos in select locations, but progress is slow. Thailand, along with Indonesia and Brunei, is one of only three Southeast Asian countries where casinos are prohibited.
Kenichi Shimomura, head of the Asia Japan desk at consultancy Roland Berger, noted, “There are renowned casino resorts in Asia, and the competitive environment is formidable.”
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