Thailand pushing ahead with plan to legalise massive casino 'entertainment complexes'

Thailand's stunning beaches, delicious food, unique cultural heritage and red light districts are already big drawcards for tourists.

Soon the country could add roulette, blackjack, pokies and other forms of currently illegal gambling to its list of attractions.

The Thai government has developed draft legislation to legalise casinos as part of gigantic "entertainment complexes" that must include at least four facilities from a list that includes hotels, restaurants, convention centres, music venues, sports arenas and amusement parks.   

The two-week public exhibition period for the Entertainment Complex Business Operation Bill closed this weekend.

However, the controversial bill's passage through parliament is not assured as critics warn the hope for economic benefits come with "considerable risks".

Hopes to supercharge tourism income

The long-debated proposal comes amid a long period of economic stagnation in Thailand, which already relies heavily on tourism.

It's hoped the casinos will attract more tourists from China, where gambling is banned apart from in Macau.

A study commissioned by Thailand's parliament last year found that the entertainment complexes, which are envisioned to be similar to those already in Singapore and Macau, could boost tourism revenue by at least $US12 billion ($18.1 billion) in the first year.

The Bangkok Post reported that licences were expected to be issued for five casinos with two in Bangkok, one each in Chiang Mai and Phuket and one in the Eastern Economic Corridor (Chachoengsao, Chonburi and Rayong provinces).

Thai citizens will have to pay an entry fee of 5,000 baht ($215) but admission for foreigners will be free.

In a post on X earlier this year, former prime minister Srettha Thavisin said the casinos would have to comprise only 3 per cent to 10 per cent of the entertainment complexes' total area.

"We can regulate the grey economy and collect taxes," Mr Srettha said.

"We do not want to promote gambling, but would rather supervise it and use the investment to create jobs."

Thailand's early casinos

Casinos have a long history in Thailand.

According to James A Warren's book Gambling, the State and Society in Thailand, legal gambling houses were a valuable source of revenue for the country's rulers as far back as the 17th century, mainly catering to the growing Chinese population.

When King Chulalongkom came to the throne in 1868, about 20 per cent of taxes came from gambling.

However, even then gambling was seen by many as a disease with the symptoms "poverty, debt slavery, and crime", and during the late 19th century King Chulalongkom began shutting down the proto-casinos with the last abolished in 1917.

Other forms of gambling were increasingly regulated and restricted until the current Gambling Act was adopted in 1936.

Warren noted that between 1939 and 1945, the government tried opening a series of state-owned casinos, but all were short lived.

Those casinos were in some ways similar to the ones the Thai government is now proposing, with locals charged much more for entry than foreigners.

"Despite the revenue it provided, the casino experiment had been a failure, primarily because the government was unable to attract the 'right' clientele — whether foreign tourists or wealthy Thais — or to exclude the majority of the population that could ill afford to gamble," Warren wrote.

These days, legal gambling in Thailand is restricted to licensed horse racing and the national lottery.

However, other kinds of illegal gambling — including underground casinos and unlicensed sports betting and lotteries — are commonplace.

Thais also often travel to gamble in casinos in Cambodia, Vietnam, Myanmar and Laos.

A survey by Thailand's Centre for Gambling Studies and Centre for Social and Business Development in 2019 found that 57 per cent of Thais had gambled in the previous year with government lotteries the most popular form of gambling, followed by underground lotteries, card games and football betting.

"We have to admit that there is illegal gambling in the country, we are trying to get rid of (it) but it cannot be wiped out, so we have to rethink and see that it is time for this," Deputy Finance Minister Julapun Amornvivat told reporters earlier this year.

Singapore to be the model

A number of international casino operators have flagged interest in establishing operations in Thailand if the law is passed.

Robert Goldstein, the chief executive of casino and resort company Las Vegas Sands which operates casinos in Macau and the Marina Bay Sands in Singapore, earlier this year said the company "absolutely" had interest in Thailand.

"It's a very, very exciting market in a lot of levels," he said on an investor call. 

"Just the sheer size of population, the accessibility and the willingness of people to travel to Thailand. It's obviously, I think, number one resort destination city in Asia.

"I think it's conceivable. It's early days, although we still have work to do with the numbers and understanding it."

The government has said Thailand would emulate Singapore, which legalised casinos in 2005.

Two huge "integrated resorts" — Resorts World Sentosa and the Marina Bay Sands — opened there in 2010 and together now employ tens of thousands of workers and contribute 1 or 2 per cent to the city state's annual GDP.

However, attempts to harness the revenue generating potential of casinos have fared less well in other parts of South-East Asia.

In Cambodia, a rush of Chinese-backed casino resort developments in the late 2010s intended to turn the beach side town of Sihanoukville into the country's version of Macau disenfranchised the local population, failing to provide them work opportunities while forcing up property prices and living costs.

The development boom spiralled into a nightmare of violence and crime and eventually led to the proliferation of online scam operations that have since metastasised across the region.

Legislation still faces big hurdles

Adam Simpson, a senior lecturer in International Studies at the University of South Australia, said the law's passage still faced significant challenges, especially following the surprise removal of Srettha Thavisin as prime minister by the country's Constitutional Court this week.

The court ruled on Wednesday Mr Srettha had violated the constitution over a cabinet appointment.

He was replaced as prime minister on Friday after Thailand's parliament voted in Pheu Thai party leader Paetongtarn Shinawatra, the daughter of billionaire former prime minister Thaksin Shinawatra.

Dr Simpson said the vast majority of the population, including the former king, had in the past opposed legalising gambling.

"Thai society is changing but it's not clear that there is majority support for legalising casinos," he said.

Critics argue that legalising casinos would not eliminate illegal gambling, while also exacerbating problem gambling.

"At present the bill excludes Thais unless they pay around $200 to enter the casino, however once the casinos are established there will be constant pressure from the casinos and their political backers to make it easier for Thais to enter the casinos to expand the revenue base," said Dr Simpson.

Dr Simpson said the Bhumjaithai Party, which is the junior party in the governing coalition, opposed the legislation, arguing the benefits will not outweigh the negative impact.

"There has also been opposition from the Democrat Party," he said.

"It is not clear whether the People's Party (Prachachon), the successor to the MFP [Move Forward Party], will support the legislation but it seems unlikely."

Dr Simpson said the big push for the legalisation of casinos had come from Mr Srettha, a property developer and businessman who always took a pro-business approach to policy.

"Srettha being removed from office may well impact on the legislation," he said.

"Thailand already has a thriving tourism industry and there are plenty of avenues for increasing foreign exchange from tourism without resorting to this socially harmful policy."

'Considerable risks'

Richard Horsey, a senior adviser to the Crisis Group thinktank, said the move to legalise casinos came with other "considerable risks" — including providing opportunities for criminal syndicates and irritating Beijing.

"Casinos are attractive to criminal syndicates not only as a lucrative revenue stream in their own right – for example by providing online gambling services to mainland Chinese punters, illegal in China – but also because they are an attractive means to launder profits from other criminal activities, from drug trafficking to scam centres," he said.

"Given that a large proportion of the revenues of Thai casinos are likely to come from visitors from mainland China, Thailand also faces the risk that Beijing may take a dim view of this development.

"China is concerned not only about the moral and social consequences of gambling, but also that junkets and other overseas gambling have been a key conduit for capital flight."

Mr Horsey said that even Singapore was struggling to deal with money laundering and other activities by transnational criminal organisations.

"Thailand will hope to emulate Singapore by putting in place a fairly credible and effective regulatory infrastructure for casinos," he said.

"But the risk is that it ends up being more like some other jurisdictions in the region that have struggled to control rampant criminality in the gaming sector."

He said that criminal syndicates generally gravitated to the least well-regulated jurisdictions.

"So the question is not only whether Thailand can emulate Singapore, but also whether it can do better than Cambodia, the Philippines, Laos and Myanmar," he said.

"It probably can, but one thing is clear from the recent history of transnational crime in the region, which is that these syndicates try to diversify as much as possible across multiple jurisdictions, so that they are more resilient to crackdowns.

"This means that Thailand will inevitably have to grapple with these difficult challenges."