Pattaya, Thailand, could see an influx of tourists if a casino gets in-built town.
Boonchai Wedmakawand | Moment | Getty Images
Thailand is working on a latest game plan to spice up foreigner arrivals and increase tourism spending: casinos.
The strategy has worked for Macao — which has overtaken Las Vegas because the world’s largest gambling hub — and Singapore, with two successful 14-year-old casinos.
If Thailand’s draft bill gets passed into law, the country may very well be Macao and Singapore’s largest competitor by the top of the last decade, industry watchers told CNBC.
“They’ve seen what constructing casinos did for Singapore, and the facility of the gaming dollar in Macau. If Thailand does it right, this might boost its appeal as a tourist destination,” said Ben Lee, managing partner of IGamiX Management and Consulting.
Tourism is a key driver of Thailand’s economy, but growth stays sluggish. Tourist arrivals haven’t fully rebounded from the Covid-19 pandemic, and that may unlikely occur until Chinese travelers — specifically — return in full force.
Southeast Asia’s second-largest economy welcomed around 28 million foreign visitors in 2023, removed from the virtually 40 million tourists in 2019.
“Thailand is a tourism juggernaut, it is the one tourism market within the region everyone fears. However the country remains to be struggling to get well its economy from the pandemic” said Lee.
In June, former Thai Prime Minister Srettha Thavisin ordered the drafting of a bill to legalize entertainment complexes within the country, a move that would boost tourism spending, increase employment, and revive the economy again.
Aside from state lottery or licensed horse betting, gambling is currently illegal in Thailand.Â
Although Paetongtarn Shinawatra has now replaced him as Thailand’s latest prime minister, experts said the bill will still likely be carried out.
“Thailand’s political situation has been fluid, but that may unlikely take momentum away from plans to construct casinos,” Maybank Investment Bank analyst Yin Shao Yang said.
If the law gets passed, Thailand’s casinos could generate 187 billion Thai baht ($5.5 billion) in revenues, or 1% of the country’s GDP, in response to Maybank research. Â
The Thai economy grew 1.9% in 2023, and is anticipated to grow 2.7% this yr, the finance ministry said.
“If Thailand casinos are arrange properly, it’ll certainly have the potential to overtake every other gaming jurisdiction in Asia.”
Ben Lee
Managing partner of IGamiX Management and Consulting
“Tourism in Southeast Asia is competitive, and countries within the region are how they’ll position tourism as a pillar of economic diversification,” said Gary Bowerman, director of travel and consumer intelligence firm Check-in Asia.
“Legalizing casinos will give Thailand a stronger positioning going forward, just because its tourism economy is already so large and has so many visitors,” Bowerman said.
What to anticipate
Probably the most asked query by industry watchers are which Thai cities these casinos could potentially be in.
Although the federal government has not publicly announced proposed locations, analysts predict they may not be in the guts of capital Bangkok.
“Bangkok is already developed and there is no such thing as a need for more development. I can not imagine there being any more empty land in Bangkok,” Maybank’s Yin said.
He added that casinos could be in-built lesser populated areas, resembling along Thailand’s Eastern Economic Corridor where Rayong, Chonburi and Chachoengsao are.Â
That is unlike Macau’s model, where “you have various casinos clustered together like Vegas,” Allan Zeman, chairman of property developer Lan Kwai Fong Group told CNBC.
“Many governments prefer to have casinos in underdeveloped places because they think it’ll help development,” he said. “But when you’ve a single casino in a developing city, it doesn’t work the identical.”
Aerial view of Phucket’s coastline.
Somnuk Krobkum | Moment | Getty Images
Other known tourist spots like Phuket, Krabi, Chiang Mai and Pattaya are expected to have casinos as well, Maybank’s Yin added.
“The federal government would need to squeeze out the best capex [capital expenditure] out of the Pattaya project,” Yin said, expecting $5 billion to be spent there.Â
In a broader push to increase capability for tourists flying to Pattaya, the U-Tapao Rayong Pattaya International Airport announced in March that it’ll construct a second runway, local media reported.
Check-in Asia’s Bowerman added that Thailand will likely follow Singapore’s model of constructing an integrated resort with activities catered for non-gamblers too.
“Take a look at Marina Bay Sands, you have a superb bar on top, the infinity pool, hotels, museums, restaurants. Young people who aren’t coming to gamble can profit too.”
A draft of the Entertainment Complex Act published by local media Bangkok Post in August stated that Thai residents wishing to enter casinos of their country must pay an entrance fee of 5,000 Thai Baht ($147). This is analogous to Singapore’s casinos where locals need to pay 150 Singapore dollars ($115) to enter. Admission for foreigners will reportedly be free.
Among the many proposed rules, casinos must also acquire a legitimate license to operate for as much as 30 years, and operators must pay $5 billion baht to register, as well as of an annual $1 billion baht payment.
Bowerman emphasized that the Thai government might stipulate that U.S. operators keen to enter Thailand’s gambling industry could have to work with Thai firms.
“There will likely be vested local interest and Thai firms will need to be involved,” he said.
Will Macao remain No.1?
Casino experts share the identical view that if Thailand successfully builds five to eight casinos across the country, it could eventually overtake Singapore’s market in popularity and total revenue.
But Macao’s casinos will still remain top, they are saying.
Revenue from casinos in Macao amounted to 114 billion Macanese Pataca ($14.16 billion) in the primary half of the yr, while the 2 casinos in Singapore brought in $2.53 billion in the identical time, earnings statements from respective operators showed.
Macao’s government relies on casinos for over 80% of its income, with many of the population employed directly or not directly by the casino industry.
Dragon For Real | Moment | Getty Images
“If Thailand casinos are arrange properly, it’ll certainly have the potential to overtake every other gaming jurisdiction in Asia, except for Macao,” IGamiX’s Lee said, adding that “it may well come very close” to Macao if Thai casinos are well-managed.
Bowerman echoed his comments, saying that Thailand is starting with a “blank piece of paper,” and will definitely attract big U.S. investors.
“The casino industry may be very lucrative and can usher in quite a lot of money. That may generate quite a lot of revenues and tax revenues to fund different elements of tourism,” he told CNBC.
