16-4-2024 (BANGKOK) In a city where gambling holds an intricate place in the cultural fabric, the story of Somporn, a 73-year-old devout Buddhist, offers a intriguing glimpse into Thailand’s complex relationship with the multibillion-dollar shadow economy of illicit betting.
Despite her unwavering commitment to Buddhist principles and her aversion to vices like drinking and smoking, Somporn harbors a singular passion – gambling. Though illegal, this vice is a rampant phenomenon in Thailand, encompassing a vast array of underground activities, from streetside lotteries and clandestine casinos to online poker, Muay Thai bouts, cockfights, and even wagers on the English Premier League.
“This country has around 70 million people, and I am certain that at least half of them are gambling,” Somporn confided to This Week in Asia, choosing to withhold her full name owing to the illegality of her modest, few-dollars-a-day habit.
Thailand’s tightly regulated gambling landscape offers few legal avenues for its citizens to indulge in this age-old pastime, with the state lottery and horse racing at licensed tracks being the only sanctioned outlets. However, this landscape is poised for a seismic shift as the Thai government wagers on legalised casinos as a potential windfall for tourism, job creation, and tax revenue.
Prime Minister Srettha Thavisin, acutely aware of the lengthy process involved in establishing a robust regulatory framework, approving bids, and constructing the envisioned “integrated resorts” – complete with hotels, concert halls, conference centres, and licensed gaming areas – is keen to expedite the legislation process.
“We do not want to promote gambling, but would rather supervise it and use the investment to create jobs,” Srettha wrote on the social media platform X on March 29. “We can regulate the grey economy and collect taxes.”
If Singapore provides the Southeast Asian model of a well-run, efficiently-taxed casino industry – exemplified by the iconic Marina Bay Sands resort – then Thailand’s initial aspiration appears to align more closely with the Philippines, boasting a substantial domestic customer base, a thriving tourism sector, and an anticipated gross gaming revenue exceeding US$6 billion this year.
The potential Thai casino boom could prove detrimental to Malaysia – with its sole land-based integrated resort for non-Muslims in the Genting Highlands – and Cambodia, where citizens are legally barred from gambling, yet dozens of casinos have sprouted up in border areas catering to tourists.
Last month, Thailand’s lower house overwhelmingly approved a study recommending the development of entertainment complexes – with casinos at their heart – to be funded and built by private capital and regulated, with revenues taxed at around 17 percent. The cabinet endorsed the casino plan on Tuesday, paving the way for formal legislation to be introduced to parliament for a comprehensive debate.
Srettha’s administration has prescribed a potent cocktail of state spending and foreign investment to revitalize Thailand’s sluggish growth rate, forecasted by the World Bank to barely reach 2.8 percent this year – a figure lagging behind the kingdom’s regional rivals.
Thai officials speculate that casinos could eventually bolster the gross domestic product by 2 percent annually, while industry insiders predict that the gaming sector may rake in US$5 billion a year by the end of the decade, buoyed by Thailand’s robust tourist numbers.
“It’s early days,” remarked Samuel Yin, an analyst at Maybank Investment Banking Group, but the signs are promising, as the opening of an entirely new market for gambling “is a once in a decade event.”
Thailand’s recent moves have already captured the attention of major integrated-resort players, including Las Vegas Sands Corp., the operator of Singapore’s Marina Bay, MGM, and Asia’s largest casino operator, Genting. During a January earnings call, Las Vegas Sands Chairman and CEO Robert Goldstein expressed keen interest, stating: “we’d love to have a presence [there] in the future.”
However, others remain cautious, uncertain whether the ambitious casino push will truly be the ace in the hole that Thailand’s government anticipates. Any revamp of the Buddhist kingdom’s Gambling Act must carefully navigate the concerns of health advocates worried about addiction rates, religious conservatives apprehensive about breaches of morality, and clean-government advocates skeptical about who will ultimately reap the bounty of a new multibillion-dollar market in Thailand’s top-down economy.
“Some politicians say we should have one or two casinos only, some say for foreigners only,” said Taopiphop Limjittrakorn, a lawmaker for the opposition Move Forward Party and a former member of the committee examining the gambling laws.
His party advocates for complete liberalization, with clear safeguards to protect minors and rehabilitate addicts, allowing new legal revenues to flow across the country.
“If you have strict rule of law, if you enforce the law and minimize the social problems, I think we should deregulate fully and not let the gambling industry become another monopoly,” he said.
With Thailand’s first legal casino unlikely to open before 2028, Somporn still has a long wait before she can make her first lawful bet in a lifetime of gambling – and she is not alone.
“There are hundreds of people in the [gambling] groups I am in … and there are hundreds of groups,” she said, flicking through a notebook filled with numbers she’d picked for unlicensed lotteries run by Thais but hosted in the lawless border areas of neighboring Vietnam, Laos, and crisis-torn Myanmar.
At her level, the stakes are small. Somporn says she usually bets less than 200 baht (US$5) a day – tempted by the prospect of winning up to 100 times that amount.
This represents but a drop in the vast ocean of unregulated and untaxed money that flows through the kingdom each year, stewarded by mafia figures and corrupt police who take turns to be the scapegoat whenever the television cameras are invited in for choreographed casino busts.
Prime Minister Srettha says it is time to transform Thailand’s penchant for gambling into an asset rather than a criminal slush fund.
“We want to get rid of the ‘influential people’ who come with this illegal business and bring the income to develop the country,” he said on X.
Asians are the world’s biggest gamblers, with Macau generating the most gaming revenue globally – upwards of US$22 billion last year, well over double that of the casinos on Las Vegas’ famous Strip. However, the region maintains an uneasy relationship with betting, partly due to religious and political sensitivities, as well as the plethora of associated social ills – addiction, corruption, drugs, prostitution, trafficking, and loan sharking – that have accompanied the emergence of shady entertainment complexes of questionable legality now dotting the borders of Laos, Cambodia, and Myanmar – many established by shadowy, super-rich figures from China.
Asia’s casinos already play a central role in laundering dirty money, global security experts say – a role that has only expanded in recent years with the advent of a cyber fraud “scamdemic” in the lawless casino zones of the Mekong, which offer criminals a “parallel banking system” to launder billions of dollars a year in illicit gains, according to the UN.
The spectacular downfall of Macau’s ‘junket king’ Alvin Chau – who was jailed for 18 years in 2023 for fraud, illegal gaming, and criminal association – carries further warnings for Thailand if it wants to make organized trips for Chinese high rollers part of its casino master plan. Getting the regulations right – and then properly enforcing them – is the real challenge, observers say.
“It’s exciting because Thailand is already Southeast Asia’s tourism juggernaut,” said Maybank IB analyst Yin, of a country expecting 40 million visitors this year.
“But the prime minister has to spend his political capital properly … will Thailand try to employ the junket model which supercharged Macau’s growth but led to a lot of money laundering, or will there be a local Thai entry levy similar to that in Singapore?”
Singapore is the regional gold standard for new casino markets, pulling in billions of dollars in gaming revenue since launching in 2010. It enforces strict entry rules: gamblers must be over 21, and any Singaporean or person with permanent residency has to pay S$150 (US$111) per 24 hours to play. It also operates an exclusion policy for problem gamblers, which can be activated by concerned family members or the casinos themselves.
Both of the city-state’s casinos are spending heavily on upgrades to their non-gaming offerings, as Asia’s post-pandemic tourism rebound looks set to continue throughout 2024.
