What is the regulatory framework for casinos in Thailand?
September 1, 2024TGM Research Partners with Winamedia on Thai Entertainment Complex Summit
November 12, 2024What is the regulatory framework for casinos in Thailand?
September 1, 2024TGM Research Partners with Winamedia on Thai Entertainment Complex Summit
November 12, 2024Transforming 'underground casinos' into 'legal casinos' is a recurring topic. While the exact number of illegal gambling dens is unclear, they remain common, contributing to a grey economy and various social issues. Discussions about legalizing casinos have surfaced multiple times, notably during the administrations of Prime Ministers Thaksin Shinawatra in 2003, Samak Sundaravej in 2008, and again in 2021 with the Entertainment Complex study plan.
If a casino is to be established in Thailand, the government must amend existing laws and study the potential impacts.
WHY DOES THE GOVERNMENT WANT TO CREATE AN ENTERTAINMENT COMPLEX AND WHAT MIGHT A THAI CASINO LOOK LIKE?
The government plans to establish an Entertainment Complex, expanding on existing venues like pubs, bars and restaurants that sell alcohol. This complex will likely include casinos.
The government believes these law changes will boost tourism, stimulate economic development, create jobs and increase tax revenue, while attracting gamblers back to Thailand.
The term “one-stop service,” as the government envisions, includes hotels, convention centres, department stores, hospitals, banks, theme parks, and sports stadiums.
While many countries like the United States and Singapore have benefited economically from these models, they also pose challenges, such as social issues and potential money laundering.
Consequently, careful planning is crucial.
During the public hearing on the Entertainment Venue Act draft, various opinions were shared, which the NESDB will consider.
Key points include:
Legal Aspects:
– The Integrated Entertainment Policy Committee should be selected transparently.
– The Committee’s power may need to be reduced, delegating some responsibilities to an Executive Committee or setting clear operating criteria.
Casino Business:
– Limit the number of licenses or enforce geographic restrictions.
– Allow foreign investment with a minimum Thai shareholding of 30% to 51%.
– Consider reducing the proposed 30-year license period to 10 years.
– Establish a clear tax rate, potentially exempting VAT.
– Allow online gambling, boxing, and horse racing.
– Require at least 80% of casino employees to be Thai nationals.
Guidelines for Casino Players:
– Set entry fees for Thai gamblers between 1,000 and 2,000 baht, with annual fees of 20,000 to 40,000 baht.
– Only allow foreigners and departing/returning Thais to gamble.
– Require proof of funds (bank statements or cash) from gamblers.
– Introduce a credit service for Thai and foreign gamblers.
These points will inform the NESDB’s next steps in the legislative process.
Recent NESDB discussions highlight diverse opinions on gambling. A survey by Chulalongkorn University’s Gambling Problem Study Center asked Thai citizens if they support legalizing casinos. Results from 2017, 2019, and 2021 show over 50% opposed, about 29-30% in favour, and 16.2-19.6% undecided.
If Thailand establishes an Entertainment Complex, it could significantly benefit the economy. According to Mr. Kraphat Worachet, Senior Director at Krungsri Securities, the complex is expected to boost foreign tourism and enhance the service sector.
The government plans to formalise informal businesses, increasing tax revenue. Investment guidelines outline 3-4 locations in Bangkok and nearby areas, but it may take 1 to 1.5 years to adjust laws and select operators.
If successful, each complex could attract 2 to 2.5 million tourists, positively impacting the service sector. This development may also benefit various stock groups, including:
- Established companies like AWC, U-Tapao International Group (UTA), and STEC are involved.
- Construction stocks, particularly STEC, are linked to large projects.
- Banks such as BBL and KBANK are expected to finance these projects.
- Service sector stocks, focusing on AOT, MINT, and BDMS.
Monitoring the economic impact will be essential, as changes in business conditions will affect tax revenue and other factors.
**How Will Casinos Affect Thai Society?**
While gambling dens are illegal in Thailand, many Thais travel to neighbouring countries for gambling. In 2001, there were 23 gambling dens along the borders, with tens of thousands crossing over each month. It’s estimated that around 40 billion baht was spent yearly in these venues.
Gambling can lead to debt and family issues, serving as a platform for money laundering and increased corruption. This misuse may exacerbate other illegal activities and social problems.
Conversely, an entertainment complex could boost the Thai economy by creating jobs and fostering new businesses. However, it’s crucial to address the potential social impacts that may arise, as they could require significant resources and might ultimately cost citizens more than they gain.