Pattaya, Thailand could see an influx of tourists if a casino is built in the city.
Boonchai Wedmakawand | Moment | Getty Images
Thailand is working on a new game plan to boost foreign arrivals and boost tourism spending: casinos.
The strategy worked for Macau β which it has beat las vegas as the world’s largest gambling hub β and Singapore, with two successful 14-year-old casinos.
If Thailand’s draft law is passed into law, the country could become Macau and Singapore’s biggest competitor by the end of the decade, industry observers told CNBC.
“They’ve seen what casinos have done for Singapore and the power of the gaming dollar in Macau. If Thailand gets it right, it could boost its appeal as a tourist destination,” said Ben Lee, chief executive of IGamiX Management. and Consulting.
Tourism is a key driver of Thailand’s economy, but growth remains subdued. Tourist arrivals have not fully recovered from the Covid-19 pandemic and this is unlikely to happen until Chinese travelers – in particular – return in force.
Southeast Asia’s second-largest economy welcomed about 28 million foreign visitors in 2023, a far cry from nearly 40 million tourists in 2019.
“Thailand is a tourist market, it’s the only tourist market in the region that everyone fears. But the country is still struggling to recover its economy from the pandemic,” Lee said.
In June, former Thai Prime Minister Srettha Thavisin ordered the drafting of a bill to legalize entertainment complexes in the country, a move that could boost tourism spending, increase employment and reinvigorate the economy.
Apart from the state lottery or licensed horse betting, gambling is currently illegal in Thailand.
Although Paetongtarn Shinawatra has now replaced him as Thailand’s new prime minister, experts said the bill would continue to be implemented.
“Thailand’s political situation has been fluid, but this is unlikely to take away momentum from plans to build casinos,” said Maybank Investment Bank analyst Yin Shao Yang.
If the law is passed, Thailand’s casinos could generate 187 billion Thai baht ($5.5 billion) in revenue, or 1 percent of the country’s GDP, according to Maybank research.
Thailand’s economy grew by 1.9% in 2023 and is expected to grow by 2.7% this year. said the finance ministry.
“If Thailand’s casinos are built right, they will undoubtedly have the potential to outperform any other gaming jurisdiction in Asia.”
Ben Lee
CEO of IGamiX Management and Consulting
“Tourism in Southeast Asia is competitive and countries in the region are looking at how they can position tourism as a pillar of economic diversification,” said Gary Bowerman, director of travel and consumer information company Check-in Asia.
“Legalizing casinos will put Thailand in a stronger position going forward simply because its tourism economy is already so large and has so many visitors,” Bowerman said.
What can we expect?
The most frequently asked question by industry watchers is in which cities in Thailand these casinos could potentially be located.
Although the government has not publicly announced proposed locations, analysts predict they may not be in the heart of the capital Bangkok.
“Bangkok is already developed and there is no need for more development. I can’t imagine there is any more vacant land in Bangkok,” Maybank’s Yin said.
He added that the casinos would be built in less populated areas, such as along Thailand’s Eastern Economic Corridor, where Rayong, Chonburi and Chachoengsao are located.
That’s in contrast to the Macau model, where “you have a lot of casinos clustered together like Vegas,” Allan Zeman, chairman of real estate developer Lan Kwai Fong Group, told CNBC.
“A lot of governments like to have casinos in underdeveloped places because they think it will help development,” he said. “But if you have a single casino in a growing city, it doesn’t work the same way.”
Aerial view of Phuket’s coastline.
Somnuk Krobkum | Moment | Getty Images
Other well-known tourist spots such as Phuket, Krabi, Chiang Mai and Pattaya are also expected to have casinos, Maybank’s Yin added.
βThe government would like to extract the highest capital [capital expenditure] out of the Pattaya project,β Yin said, expecting $5 billion to be spent there.
In a broader push to expand tourist capacity flying into Pattaya, U-Tapao Rayong Pattaya International Airport announced in March that it would build a second runway. local media was mentioned.
Asia’s Bowerman added that Thailand will likely follow Singapore’s model of building an integrated resort with activities aimed at non-gamers as well.
“Look at Marina Bay Sands, you have a great bar at the top, the infinity pool, hotels, museums, restaurants. Young people who don’t come to play can also benefit.”
A draft law on entertainment complexes published by local media Bangkok Post in August said that Thai citizens wishing to enter casinos in their country must pay an entry fee of 5,000 Thai baht ($147). This is similar to Singapore casinos where locals have to pay S$150 ($115) to enter. According to information, entry for foreigners will be free.
Among 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, on top of an annual payment of 1 billion baht.
Bowerman stressed that the Thai government may stipulate that American operators wishing to enter the Thai gaming industry must partner with Thai companies.
“There will be a vested local interest and Thai companies will want to be involved,” he said.
Will Macau remain No.1?
Casino experts share the same view that if Thailand successfully builds five to eight casinos across the country, it could eventually surpass the Singapore market in popularity and overall revenue.
But Macau’s casinos will remain top, they say.
Revenue from casinos in Macau totaled 114 billion Macanese Pataca ($14.16 billion) in the first half of the year, while the two casinos in Singapore brought in $2.53 billion in the same period, according to earnings reports from the respective companies.
The Macau government relies on casinos for over 80% of its income, with most of the population directly or indirectly employed by the casino industry.
Dragon For Real | Moment | Getty Images
“If Thailand’s casinos are built right, it will without a doubt have the potential to surpass every other gaming jurisdiction in Asia with the exception of Macau,” said IGamiX’s Lee, adding that it “may come very close” to Macau if Thai casinos are well managed.
Bowerman echoed his comments, saying Thailand is starting with a “blank piece of paper” and is sure to attract major U.S. investors.
“The casino industry is very lucrative and will bring in a lot of money. This will generate a lot of revenue and tax revenue to fund different elements of tourism,” he told CNBC.