Thailand's gaming industry could generate $9.1 billion annually, surpassing Singapore and ranking just behind Macau and Las Vegas in GGR.
Thailand is on track to become the third-largest market in the world for gross gaming revenue (GGR), overtaking Singapore. This marks a significant shift in the global gambling landscape. A new report from Citigroup projects that Thailand could generate a staggering $9.1 billion in gaming revenue annually once its market is fully developed, positioning it just behind Macau and Las Vegas.
The report, which comes from Citigroup analysts George Choi and Preenapa Detchsri, lays out a vision for Thailand's rapid rise in the gaming sector. By tapping into the massive potential of integrated resorts (IRs) and casinos, Thailand could become a key player in the global gambling economy. The analysis is based on the assumption that the government will approve the development of several major casino licenses, including two in Bangkok and one each in Pattaya, Phuket, and Chiang Mai.
A Competitive Edge in Profitability
One of the most striking aspects of Thailand's potential gaming market is its profitability. The Citigroup report highlights that the country offers a competitive advantage in terms of lower taxes and operational costs. The gaming tax rate in Thailand is just 17%, significantly lower than in neighboring Singapore, which gives operators more room for profit. The cost of running gaming operations in Thailand is also expected to be more affordable due to lower wages and utility costs. This, in turn, could lead to EBITDA (earnings before interest, taxes, depreciation, and amortization) margins reaching between 40% and 50% in the coming years, a strong signal of the industry's financial health.
With these favorable conditions, the report estimates that Thailand’s gaming sector could generate around $4.1 billion in EBITDA once fully operational. This would make it a lucrative market for both domestic and international investors, further boosting its appeal as a destination for gaming operations.
Boosting Tourism and the Economy
The implications of legalizing casinos in Thailand go far beyond the gaming industry. According to a study submitted to the Thai parliament earlier this year, the introduction of casinos within integrated entertainment complexes could lead to a dramatic increase in tourist spending. The report suggests that average tourist spending could rise by 52%, from THB 42,710 ($1,140) to THB 65,050 ($1,790) per trip, thanks to the new attractions and amenities brought by casino resorts.
Furthermore, the study points out that legalizing casios could inject around $12 billion into the tourism sector, while also helping to combat the persistent issue of illegal gambling. Beyond tourism, the country’s GDP could see a boost, with estimates suggesting that the sector could contribute up to 1.16 percentage points to GDP growth.
Swift Progress on Legalization
Thailand’s government is moving quickly to bring casinos into the fold, a factor that analysts see as crucial for the country’s rise as a gaming giant. The Thai government has shown a clear commitment to legalizing gaming, with several key milestones already reached. According to Citigroup, the government’s proactive stance and fast-tracked legalization process bode well for the sector's growth.
Deputy Finance Minister Julapun Amornvivat recently reaffirmed that a revised draft law for entertainment complexes would be presented to the Cabinet by the end of 2024. If approved, the draft law will then move to the House of Representatives for further deliberation, with parliamentary sessions set to resume in December. Given the rapid pace of progress, some analysts believe Thailand could see its first fully operational casino resorts as early as 2029, possibly beating Japan’s timeline for MGM Osaka, which is slated to open in 2030.
Partnerships to Drive Growth
As Thailand opens its doors to large-scale casino operations, partnerships between local corporations and global gaming giants will play a key role in the development of this new market. In a competitive bid for casino licenses, major international casino operators are expected to team up with Thai companies to improve their chances of securing approval. Citigroup’s report estimates that these partnerships could significantly boost the profitability of global operators, with potential EBITDA growth of 15% to 30%.
Leading gaming companies such as Las Vegas Sands (LVS), MGM Resorts, and Galaxy Entertainment are already eyeing the Thai market. By forming joint ventures with Thai partners, these operators could benefit from a 50:50 split of profits and capitalize on the growing demand for gaming and entertainment in Thailand.
The development of integrated resorts will also create a ripple effect in other sectors of Thailand’s economy, especially tourism and construction. Companies with strong ties to the hospitality industry, such as Airports of Thailand, Minor International, and Central Plaza Hotel, are expected to be major beneficiaries. Notably, the U-Tapao consortium, a group involved in the development of the Eastern Economic Corridor, has expressed interest in adding a casino complex to its Airport City project.
Long-Term Global Impact
Thailand’s move toward a legalized gaming market is poised to reshape the global gaming industry. As the country opens up to casino developments, the global distribution of gaming revenues will likely shift, with Thailand emerging as a significant player. Though it may take at least six years for the first casinos to open, the potential for long-term growth is considerable.
Citigroup’s analysts suggest that investors should “buy into this thesis while it is still in the dream phase,” signaling that now is the time to invest in companies that are positioning themselves to benefit from Thailand’s gaming boom. With global operators like LVS, MGM, and Galaxy Entertainment already making moves, the race for a stake in Thailand’s gaming sector is on.
As Thailand moves toward full gaming legalization, it is clear that the country is on the cusp of becoming a major force in the global gaming industry. With favorable market conditions, strong government support, and the potential for substantial economic growth, Thailand’s gaming future looks incredibly promising.
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