If a casino were built in Pattaya, Thailand, the city would likely see a large number of tourists.
Boonchai Wedmakawad | Moment | Getty Images
Thailand is developing a new game plan to boost foreign arrivals and boost tourism spending: casinos.
The strategy worked for Macau— Beyond Las Vegas As the world’s largest gambling center, Singapore has two successful casinos with a 14-year history.
Industry observers told CNBC that if Thailand’s draft bill is passed into law, the country could become Macau and Singapore’s biggest rival by the end of the decade.
“They’ve seen the impact of casino construction in Singapore, and the power of gaming dollars in Macau,” said Ben Lee, managing partner at IGamiX Management and Consulting. “If Thailand does it right, this could increase its appeal as a tourist destination.” .
Tourism is the main driver of Thailand’s economy, but growth remains sluggish. Visitor numbers have yet to fully rebound from the Covid-19 pandemic, and this is unlikely to happen unless Chinese tourists, especially Chinese tourists, return in full force.
Southeast Asia’s second-largest economy welcomed about 28 million foreign tourists in 2023, down from nearly 40 million in 2019.
“Thailand is a tourism giant and the tourism market that everyone in the region is worried about. But the country is still trying to recover economically from the pandemic,” Lee said.
In June, Thailand’s former Prime Minister Srettha Thavisin ordered the drafting of a bill to legalize entertainment centers in the country, a move that could spur tourism spending, increase employment and revive the economy again.
Gambling is currently illegal in Thailand, except for betting on the national lottery or licensed horse racing.
Although his daughter Paetongtarn Shinawatra has now succeeded him as Thailand’s new prime minister, experts say the bill is still likely to be implemented.
“Thailand’s political situation has been unstable, but this is unlikely to dampen the impetus for plans to build casinos,” said Yoon Siew Yang, an analyst at Maybank Investment Bank.
If the law is passed, Thailand’s casinos will generate 187 billion baht ($5.5 billion) in revenue, or 1% of the country’s GDP, according to Maybank research.
Thailand’s economy will grow by 1.9% in 2023, and is expected to grow by 2.7% this year the Ministry of Finance said.
Gary Bowerman, director of travel and consumer intelligence company Check-in Asia, said: “Tourism in Southeast Asia is competitive and countries in the region are considering how to position tourism as a pillar of economic diversification.”
“Legalizing casinos will put Thailand in a stronger position in the future because its tourism economy is already so large and has so many tourists,” Bowerman said.
what happens
The question asked most by industry observers is in which cities in Thailand these casinos might be located.
Although the government has not publicly announced the proposed locations, analysts predict they may not be centrally located in the capital Bangkok.
“Bangkok is already developed and there is no need for further development. I can’t imagine there will be any vacant land in Bangkok,” said Maybank’s Yoon.
He added that casinos would be built in less populated areas such as along Thailand’s Eastern Economic Corridor, where Rayong, Chonburi and Chachoengsao provinces are located.
That’s different from the model in Macau, which is “like Vegas with a lot of casinos,” Allan Zeman, chairman of real estate developer Lan Kwai Fong Group, told CNBC, adding that he was optimistic about the future success of Thailand’s casinos Be skeptical.
“Many governments like to set up casinos in less developed areas because they think it will help development,” he warned. “But if you only have one casino in a growing city, it works differently.”
Aerial view of Phuket coastline.
Somnuk Klobkum | Moment | Getty Images
Maybank’s Yoon added that other popular tourist spots such as Phuket, Krabi, Chiang Mai and Pattaya are also expected to have casinos.
“The government hopes to squeeze the highest capex (capital expenditure) out of the Pattaya project,” said Yoon, who estimated the project would cost $5 billion.
In a broader push to expand capacity for tourists flying to Pattaya, U-Tapao Rayong Pattaya International Airport announced in March that it would build a second runway, local media the report said.
Check-in Asia’s Bowerman added that Thailand may follow Singapore’s example and build integrated resorts with activities suitable for non-gamblers.
“Look at Marina Bay Sands, it has a great bar, infinity pool, hotel, museum, restaurants. Young people who don’t come to gamble can also benefit.”
Draft “Entertainment Complexes Bill” released by local media bangkok post Thai citizens wishing to enter the country’s casinos must pay an entrance fee of 5,000 baht ($147), it said in August. This is similar to casinos in Singapore, where locals have to pay 150 Singapore dollars ($115) to enter. Admission is reportedly free for foreigners.
Under the proposed rules, casinos must also obtain a valid operating license for up to 30 years, and operators must pay 5 billion baht to register in addition to 1 billion baht per year.
Bowerman stressed that the Thai government may stipulate that American players keen to enter Thailand’s gaming industry must cooperate with Thai companies.
“This will be in line with local vested interests and Thai companies will also want to participate,” he said.
Will Macau remain number one?
Casino experts also believe that if Thailand succeeds in establishing five to eight casinos across the country, it could eventually surpass the Singapore market in terms of popularity and total revenue.
But they said Macau casinos will remain in the lead.
The profit statements of the respective operators show that in the first half of this year, Macau casinos generated revenue of 114 billion patacas (US$14.16 billion), while the two casinos in Singapore generated US$2.53 billion in the same period.
More than 80% of the Macau government’s revenue relies on casinos, and most of the population is directly or indirectly employed by the casino industry.
Real Dragons | Moment | Getty Images
“If a Thai casino is set up properly, there is no doubt that it has the potential to surpass all other gaming jurisdictions in Asia except Macau,” said IGamiX’s Lee. He added that if a Thai casino can open a casino in Thailand, then “it can Very close to” Macau. The casino is well managed.
Bowerman echoed his comments, saying Thailand was starting with a “blank slate” and would surely attract big American investors.
“The casino industry is very profitable and brings in a lot of money. It’s going to generate a lot of revenue and tax revenue to fund different areas of the tourism industry,” he told CNBC.
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