GGRAsia – Thai assembly backs casinos, Maybank thinks 2029 for first

Thai assembly backs casinos, Maybank thinks 2029 for first

Mar 29, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck

Members of Thailand’s House of Representatives voted overwhelmingly on Thursday in support of a study recommending casinos be permitted in large entertainment complexes proposed for that nation.

A total of 253 out of 257 lawmakers present in the National Assembly’s lower chamber voted in favour of the plan, reported multiple media outlets. Previous reports had mentioned the possibility of a “bill” on the matter being voted on that day.

Deputy Finance Minister, Julapun Amornvivat, was cited as saying the study would be forwarded to the national government’s cabinet for a decision on whether legalising casinos is “suitable for the nation.”

Maybank Investment Bank Bhd said in a Friday note, citing information it had gathered: “Assuming two years to finalise a regulatory framework and three years to construct, the first entertainment centre may only open in 2029.”

That could still potentially be before the 2030 projected opening date of Japan’s first casino resort, MGM Osaka. In 2018, Japan’s parliament enacted a law to allow the creation of Integrated Resorts (IRs) in that country.

Maybank analyst Samuel Yin Shao Yang stated regarding Thailand’s potential competitive threat regionally: “Genting Singapore Ltd and Naga[Corp Ltd] are most exposed, but five years is a long time.”

That was a reference first to the promoter of Resorts World Sentosa in Singapore, and second to the Hong Kong-listed promoter of NagaWorld, the monopoly casino operator in Cambodia’s capital, Phnom Penh.

Maybank stated, regarding business elements of Thailand’s plan: “Proposed gaming tax rates are low at 17 percent and social safeguards à la [in the manner of] Singapore will be proposed.”

The latter was a reference to the casino duopoly of Singapore, Thailand’s regional neighbour, which emphasises social safeguards for its citizens and permanent residents, against problem gambling.

Maybank’s Mr Yin said, regarding details emerging about Thailand’s proposal: “It is envisioned that licences will be awarded in phases, and up to eight entertainment centres will be built.”

Previous reports had mentioned the possibility that an aggregate of five regions within Thailand might be permitted to host casino resorts.

17pct GGR tax, 20-year licences

Maybank said the Thailand casino study’s proposed 17 percent tax on gross gaming revenue (GGR) would be the “the second lowest in ASEAN after Cambodia”.

The latter was a reference to a club of Southeast Asia nations that includes the casino jurisdictions of Cambodia, Laos, Malaysia, the Philippines, Singapore, and Vietnam.

Maybank further noted: “Corporate tax rates of 20 percent to 30 percent will be levied on pre-tax profit.

“Locals will be subject to a yet-to-be-determined casino entry levy and will be prohibited from entering casinos if requested by court orders or family members.”

The Malaysian investment bank also observed that licence bidders in the Thailand market would need to be “locally incorporated and have paid up capital of more than THB10 billion (US$270 million)”.

Analyst Mr Yin added: “The initial licence duration is 20 years but renewable every five years. Four different investment sizes are envisioned but the first phase of licences will be for the largest, commanding minimum capex of THB100 billion (US$2.7 billion).”

Licence bidders would be evaluated by a committee headed by the nation’s prime minister.

Mr Yin wrote: “We understand that favoured locations are in the Eastern Economic Corridor (Rayong, Chonburi, and Chachoengsao); south (Phuket, Phang Nga, Krabi); north (Chiang Mai, Chiang Rai, Lampang); and northeast (Nong Khai, Udon Thani, Khon Kaen, Nakhon Ratchasima).

“These locations are also in the midst of building/upgrading their airports (Eastern Economic Corridor, south), ports (Eastern Economic Corridor) and high-speed rail (north and north east).

“The whole idea of entertainment centres is to attract more tourists to Thailand,” he added.

Average spending of tourists in Thailand could increase by 52 percent, to THB65,050 per trip, were casino resorts to be built in that nation, recently reported Bloomberg, citing information in a casino legalisation study

Thailand’s National Economic and Social Development Council has set a target of 80 million arrivals by foreign tourists annually by the year 2027, which would be a greater number than Thailand’s current population.