Thailand is on the cusp of a significant transformation in the global gaming landscape, according to a detailed analysis by Citigroup in their latest “Super Sector” reportAnalysts George Choi and Preenapa Detchsri forecast that the growing Thailand gaming market may reach the top revenue-generating markets internationally, surpassing Singapore to become the third-largest market worldwide in terms of GGR. Their projections place Thailand’s potential GGR at an impressive $9.1 billion, trailing only behind giants like Macau and Las Vegas once its market reaches full maturity.

Strategic license distribution and financial projections:

The optimistic outlook is based on the Thai government’s expected distribution of casino licenses—two in Bangkok and one each in the major tourist destinations of Pattaya, Phuket, and Chiang Mai. This strategic allocation underpins Thailand’s potential to transform into a pivotal gaming hub in Southeast Asia.

From a financial perspective, Thailand is predicted to have considerable advantages over competitors like Singapore. As Asia Gaming Brief reports, the report notes, “With a lower gaming tax rate of 17 percent and reduced operational expenses, mainly in wages and utilities, we believe EBITDA margins could reach 40 to 50 percent.” Such favorable conditions could generate an EBITDA of around $4.1 billion in Thailand’s gaming sector when fully operational.

An earlier study submitted to the Thai parliament highlighted that the establishment of integrated resorts (IRs) with casinos could increase average tourist spending by 52 percent to THB65,050 (approximately $1,790) per visit. The broader integration of casinos within entertainment complexes is anticipated to significantly enhance tourism revenue by about $12 billion and potentially increase the country’s GDP growth by 1.16 percentage points. This development comes as a countermeasure to the widespread issue of illegal gambling, offering a regulated alternative that could also boost state revenues.

Accelerated legal framework and development timelines:

The Thai government’s proactive and determined approach to legalizing gaming is a major driver behind these forecasts. “The Thai government has shown its determination in creating a major booster to the tourism industry via gaming legalization, and the speedy legalization progress thus far is a testament to that,” according to Citigroup. The streamlined legalization procedures and the anticipated request-for-proposals (RFP) process are expected to mirror the expediency of Singapore’s approach two decades ago, with a completion target set for mid-2025.

Deputy Finance Minister Julapun Amornvivat has indicated plans to present a revised draft law on Entertainment Complexes to the Cabinet by the end of 2024. Following Cabinet approval, this will move to parliamentary deliberation with the House of Representatives reconvening from mid-December to April of the following year.

As per projections by Maybank Investment Bank, Thailand could inaugurate its first Entertainment Complexes by 2029, potentially outpacing the opening of MGM Osaka scheduled for autumn 2030. The formation of partnerships between domestic corporations and global casino operators is seen as crucial for securing licenses. Such collaborations, particularly joint ventures on a 50:50 basis, could boost the EBITDAs of global operators by 15 to 30 percent, especially for those investing in Bangkok.

The development of Entertainment Complexes is also set to benefit Thailand’s tourism and construction sectors substantially. Key players like Airports of Thailand, Minor International, and Central Plaza Hotel are poised to gain from their robust presence in the hospitality sector. Moreover, the U-Tapao consortium has plans to integrate a gaming complex within its Airport City development in the Eastern Economic Corridor, further highlighting the extensive economic benefits anticipated from this sector.

In light of these developments, the Citigroup report advises investors to engage early while the sector is still in the planning phases, recommending stocks like Las Vegas Sands (LVS), MGM Resorts, and Galaxy Entertainment as top picks likely to benefit from Thailand’s gaming sector expansion.