Thailand Moves to Legalize Casinos; Releases Draft Casino Bill

In a significant move to bolster its tourism and economic sectors, Thailand is advancing plans to legalize casinos within large entertainment complexes. This initiative is part of a broader strategy to rejuvenate the country’s appeal as a premier tourism hotspot and attract substantial foreign investment.

The draft rules for the legalization of casinos, published by the Council of State for public feedback until August 18, outline a comprehensive framework for establishing integrated entertainment venues. These venues will house casinos alongside five-star hotels, convention centers, amusement parks, and other attractions. The initial casino licenses will be valid for 30 years, with an option for a 10-year renewal.

Prime Minister Srettha Thavisin, who assumed office less than a year ago, has been a driving force behind this push. His administration aims to harness the potential of legalized gambling to generate significant tax revenue and foreign investment. The Thai House of Representatives has already endorsed a study supporting the creation of legalized casinos to attract high-spending tourists, potentially boosting tourism revenue by approximately USD$12 billion.

Key Provisions of the Entertainment Complex Bill

The proposed Entertainment Complex Bill provides a detailed framework for the operation of these multifaceted venues. Key components of the bill include:

– Licensing and Investment: Operators must be Thai-incorporated entities with a minimum registered capital of 10 billion baht (USD$276.4 million). Licenses will initially be available for extra-large complexes, requiring a minimum investment of 100 billion baht (USD$2.764 billion). The licensing process will involve a competitive bidding system.

– Casino Area Limitations: The casino area within an entertainment complex is expected to be limited to 5% of the total space, ensuring that these venues offer a diverse range of attractions beyond gambling.

– Entry Regulations and Taxation: Entry to casinos will be restricted to individuals over 20 years old and those not barred by court orders. Thai nationals will need to register and pay an entry levy. The bill proposes a 17% tax on gross gaming revenue, alongside other potential excise taxes on various entertainment services.

Strategic Locations and Industry Interest

Thai officials have identified key tourist destinations such as Greater Bangkok, Phuket, Chiang Mai, and Chonburi (home to Pattaya) as potential sites for these entertainment complexes. This strategic placement aims to maximize tourist influx and economic benefits.

The global casino industry, which generated $263 billion in revenue last year according to IBIS World, is closely watching Thailand’s developments. Major players like Galaxy Entertainment Group Ltd, MGM Resorts International, and Las Vegas Sands Corp. have expressed interest in exploring opportunities in Thailand, viewing it as a hedge against the uncertainties in Macau.

Tourism and Economic Revival

Tourism, a critical sector for Thailand, contributes about 12% to the nation’s $500 billion economy and supports 20% of total jobs. The country has seen a 34% increase in foreign arrivals through July 2024 compared to the same period in 2023, highlighting the sector’s recovery momentum post-pandemic. Legalizing casinos is expected to further enhance this revival by attracting a new segment of high-spending tourists and investors.

Source: NRF