Thailand Casinos Inch Closer to Reality, Could Open before MGM Osaka

Thailand is getting closer to legalizing casino resorts after its House of Representatives on Thursday easily passed legislation allowing entertainment complexes, which would include gaming venues.

Of the 257 House members in attendance, 253 voted in favor of the casino gaming legislation. Deputy Finance Minister Julapun Amornvivat said a casino feasibility study could now be advanced to national government’s cabinet. Assuming momentum continues building, it’s possible the first gaming venue in Thailand could open its doors before MGM Resorts International’s (NYSE: MGM) Osaka integrated resort. The is expected to open in 2030.

Assuming two years to finalise a regulatory framework and three years to construct, the first entertainment centre may only open in 2029 (in Thailand),” said Maybank Investment Bank in a note to clients today.

Should Thailand’s national cabinet formally approve entertainment complexes, it’s possible that up to eight such venues will be permitted and it’s likely that awarding of gaming licenses will occur in phases.

Owing to its reputation as major tourist destination in Southeast Asia and its penchant for attracting visitors from China and the West, Thailand was already expected to attract some of the gaming industry’s biggest names in terms of bidding for casino permits.

That scenario could be amplified should the Thai government continue displaying efficiency in the legalization and regulatory process. Delays and lack of clarity on those fronts are why so many of the industry’s largest operators eventually , leaving that country with just the MGM Osaka venue to start its move into casino gaming.

Analysts also expect Thailand’s casino framework will be closer to that of Singapore than Macau and low tax rates could be another draw to international operators.

“Proposed gaming tax rates are low at 17 percent and social safeguards à la [in the manner of] Singapore will be proposed,” noted Maybank analysts.

Singapore is home to just two integrated resorts, which are operated by Genting Singapore and a unit of Las Vegas Sands (NYSE: LVS).

Should the country proceed with the 17% tax rate on gross gaming revenue (GGR), Thailand would have the second-lowest casino taxes in region after only Cambodia. That plus expected 20-year license terms with renewals possible every five years could be to the liking of operators. There’s also talk that the largest required investments could be in the $2.5 billion to $3 billion range easily approachable for any number of operators that could be interested in Thailand.

Maybank said the Thai government likely has preferences for the initial entertainment complexes to be located in some of 13 desired locations in the eastern, northern, northeastern, and southern parts of the country. The country’s prime minister will steer a committee to evaluate casino bids.

It’s expected that Thai entertainment complexes featuring casinos could boost tourism spending in the country by as much as 52% annually. That’s one reason why the country will likely draw bids from some of in the gaming industry.