Thailand Set to Become a Global Gaming Powerhouse, Poised to Overtake Singapore in Gross Gaming Revenue

Thailand is on the verge of establishing itself as a significant player in the international gaming market, with new projections from Citigroup suggesting it may surpass Singapore to rank as the world’s third-largest market by gross gaming revenue (GGR). According to Citigroup’s "Super Sector" report, co-authored by analysts George Choi and Preenapa Detchsri, Thailand’s GGR could reach a remarkable $9.1 billion once the industry is fully developed, placing it just behind Macau and Las Vegas.

These projections assume the government will issue two casino licenses in Bangkok, with additional licenses awarded in Pattaya, Phuket, and Chiang Mai. In terms of profitability, Thailand’s gaming industry appears to have a competitive edge. “With a lower gaming tax rate of 17 percent and reduced operational expenses (mainly in wages and utilities) compared to Singapore, we believe EBITDA margins could reach 40 to 50 percent,” the report states. Once fully operational, this would translate to an EBITDA of around $4.1 billion in Thailand’s gaming sector.

Research conducted earlier this year and presented to the Thai parliament suggests that integrated resorts (IRs) featuring casinos could increase average tourist spending by 52 percent, reaching THB65,050 ($1,790) per trip. Additionally, legalizing casinos within entertainment complexes has the potential to significantly enhance tourism revenue, adding approximately $12 billion while also addressing Thailand’s ongoing issue with illicit gambling. The anticipated revenue from legalized casinos could also increase Thailand’s GDP growth by an estimated 1.16 percentage points.

Rapid Progress Towards Gaming Legalization

The Thai government’s proactive stance on gaming legalization is considered key to the market’s rapid expansion. “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,” Citigroup reports. The bank expects the remaining steps for legalization and the request-for-proposals (RFP) process to proceed efficiently, with a timeline similar to Singapore’s gaming expansion two decades ago. The legalization process is expected to conclude by mid-2025.

Deputy Finance Minister Julapun Amornvivat confirmed the government’s intention to present a revised draft law on Entertainment Complexes to the Cabinet by the end of 2024. If the Cabinet approves, the draft law will be sent to parliament for review. The House of Representatives is scheduled to meet from mid-December to April next year.

According to earlier estimates from Maybank Investment Bank, Thailand could see its first Entertainment Complexes by 2029 as the momentum for casino legalization continues. With Thailand moving forward at this pace, it could potentially open its first casino before MGM Osaka’s debut in autumn 2030.

Strategic Partnerships Between Domestic and Global Casino Operators

To strengthen their bids for casino licenses, local companies and international gaming giants are likely to pursue partnerships. Citigroup’s report estimates that if global casino operators secure investments in Bangkok, particularly through 50:50 joint ventures with local firms, their EBITDAs could increase by 15 to 30 percent.

The development of these Entertainment Complexes is also expected to bring considerable benefits to Thailand’s tourism and construction industries. Key companies such as Airports of Thailand, Minor International, and Central Plaza Hotel stand out as potential beneficiaries, given their established presence in the hospitality market. The U-Tapao consortium, which is active in the Eastern Economic Corridor, has already expressed interest in incorporating a gaming complex into its Airport City development.

A Game-Changer for the Global Gaming Landscape

The report emphasizes that Thailand’s move toward gaming legalization could have a significant impact on the global industry. While it may take up to six years for these Entertainment Complexes to reach full operational capacity, the potential for substantial shifts in revenue distribution within the industry is undeniable.

In light of these developments, Citigroup advises investors to “buy into this thesis while it is in the dream phase,” highlighting Las Vegas Sands (LVS), MGM Resorts, and Galaxy Entertainment as the top international gaming operators poised to benefit. Each of these companies has shown public interest in expanding into Thailand.

By fLEXI tEAM