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Thailand could open first Entertainment Complex by 2029: Maybank

April 3, 2024 Thailand Industry Updates

According to a report by Maybank Investment Bank, Thailand may witness the construction of its first Entertainment Complexes (EC) by 2029 as the country gets closer to potentially legalizing casinos.

This might mean that the first casino in Thailand will open ahead of MGM Osaka, which is scheduled to open in the fall of 2030.

The most recent information indicates that Thailand is making a significant effort to boost the industry by proposing to tax gross gaming revenue (GGR) at 17 percent, which is among the lowest rates in ASEAN after Cambodia.

Thailand is predicted to host five to eighteen economic corridors (ECs), with the most desirable sites in the northeastern provinces, southern regions (Phuket, Phang Nga, Krabi), northern regions (Chiang Mai, Chiang Rai, Lampang), and Eastern Economic Corridor (Rayong, Chonburi, and Chachoengsao).

To attract more tourists to Thailand, these places are also working on infrastructure upgrades, such as high-speed rail projects in the northeast and north, port development in the Eastern Economic Corridor, and airport expansions in the South and East.

The first EC may not open until 2029 because of a likely two-year delay in creating legislative frameworks and a three-year development phase.

Apart from the favorable conditions, Maybank informs that pre-tax revenue will be subject to corporate tax rates that vary from 20 to 30 percent. Locals may be denied entry to casinos by court rulings or pleas from their families, and they may be charged an entrance fee (details to be confirmed).

Applicants seeking licenses must be locally created and have more than THB10 billion ($270 million) in paid-up capital. Four investment levels are envisaged, with the first licenses having a 20-year duration and being renewed every five years. However, the first phase will need a minimum capital expenditure of THB100 billion ($2.7 billion).

The Maybank research team has highlighted Singapore and NagaCorp in Cambodia as particularly vulnerable because of their low tax rates and social safeguards akin to those in Singapore.

However, since less of Resorts World Genting’s revenue comes from outside Malaysia, it could have less of an impact. Given that a significant portion of Genting Singapore’s Resorts World Sentosa’s revenue originates from foreigners, particularly VIP groups, analysts are more worried about this resort.

Given that the bulk of NagaCorp’s funding for Naga 1 and 2 comes from outside the country, the only people who may legally gamble in Cambodia are those who own foreign passports. However, past experience suggests that income drops—like the ones Malaysian GGR suffered after the opening of Singaporean integrated resorts in 1H10—might not happen as expected.

Both Genting Singapore and NagaCorp are making significant investments in property upgrades, and Genting Singapore has shown interest in applying for a Thai EC license. Their eventual outcomes may not be as dire as first believed as a consequence.

Original story by: Asia Gaming Brief

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