Senator eager to improve casino plan

Senator eager to improve casino plan

Lawmaker suggests several tweaks to the proposal being vetted

A croupier awaits punters at an illegal casino in Nonthaburi province. Photo courtesy of the Immigration Bureau
A croupier awaits punters at an illegal casino in Nonthaburi province. Photo courtesy of the Immigration Bureau

With the resurgence of interest in legalising casinos to bolster economic growth as the digital wallet and Land Bridge policies remain on hold, the government is being urged to reassess the details of a proposed casino and entertainment complex.

According to Sangsit Piriyarangsan, a senator who has been studying casino legalisation, several aspects should be improved.

OPEN BIDDING

He said the government wants only Thai companies to participate in the bidding for the casino complex project.

However, Mr Sangsit would prefer foreign entities be allowed to bid to address concerns of favouritism, corruption and a lack of transparency.

Opening up the bidding would build public confidence that the project is genuinely for the country's benefit, he said.

Another condition Mr Sangsit would like to tweak is that the proposed casino complex should be located no more than 100 kilometres from an airport. This could restrict the flexibility of potential investment as it is restrictive and lacks transparency, he said.

Setting less rigid parameters would be preferred, said Mr Sangsit.

He recommends following the Singapore model, where casino complexes cater to Mice (meetings, incentives, conferences and exhibitions) groups as well as gamblers.

For this model, it is essential to have convenient transport systems such as electric train service to connect the venue to the airport, said Mr Sangsit.

PREVENTIVE MEASURES

To mitigate the negative impacts of gambling, such as low-income earners betting at the casino, he suggested provisions to prevent their entry for gambling purposes.

For instance, an entrance fee of 2,000 baht per person could be imposed as well as a minimum age requirement to restrict entry to the premises, said Mr Sangsit.

For people who can afford to gamble, but it is causing an adverse economic impact to their families, the families should have the right file a complaint to a gambling control committee, prohibiting the gambler from entering the premises, he said.

In addition, Mr Sangsit said it is crucial to clearly define in the law how much revenue from the casino complex should be allocated directly for public benefit.

For example, funds could be allocated to help care for the elderly or contribute to public health in the country. A fund might need to be established to campaign against young people gambling and offering treatment for gambling addicts, he said.

If the government is serious about promoting this casino complex, Mr Sangsit said it should expedite the bidding process and allow the winning private sector bidder to complete the project within 1-2 years, rather than the 5-10 years in the current timeline.

This would prevent potential delays as market conditions and demand change rapidly, he said.

"In the past, the government failed to push forward a casino complex because of internal issues such as corruption, leading to a loss of public confidence and stability," said Mr Sangsit, the first academic in Thailand to advocate for casino complexes in the country nearly 30 years ago.

"Pushing forward such a policy requires a stable government and fiscal support."

NEW REVENUE DRIVER

Deputy Finance Minister Julapun Amornvivat, chairman of a special House committee tasked with studying the potential of an integrated entertainment complex and casino, said such a complex would combine various types of entertainment in one area, including a five-star hotel, a landmark, an exhibition centre and restaurants with a casino.

"Establishing world-class integrated entertainment complexes and casinos will be allocated to designated areas to facilitate the management, revenue collection and control of locals' access to casino gambling," said Mr Julapun.

"These complexes would promote tourism in a new format to increase state revenue, while addressing illegal gambling issues. The complexes align with the tourism trend of a 'fun economy', creating a comprehensive entertainment experience for tourists."

He said the fun economy is a rapidly growing sector, with a global value of US$13.7 trillion, equivalent to 14% of the world's GDP.

The sector employs many people and is interconnected with other industries, said Mr Julapun.

In 2022, integrated entertainment complexes worldwide were valued at $1.5 trillion, with the value projected to grow to $2.2 trillion by 2028.

Data from Statista indicates the countries and regions with the highest income from this sector are Macau with $32 billion, the US (specifically Las Vegas) with $30 billion, Singapore ($12 billion), South Korea ($9 billion), the Philippines ($6 billion), Vietnam ($5 billion) and Indonesia ($4 billion).

Studies revealed integrated entertainment complexes had a significant economic impact on Singapore, attracting more than 300 billion baht in foreign investment and expanding tourism revenue by 47% compared with before their establishment.

The segment created more than 20,000 high-income jobs, producing tax revenue amounting to $12 billion.

Integrating casino businesses allowed the Singaporean government to collect taxes and allocate funds to rehabilitate gambling addicts, while also combatting illegal gambling.

After integrated entertainment complexes and casinos were legalised, the rate of gambling addiction and illegal gambling decreased from 2.1% in 2005 to 0.2% in 2020, according to the Thai House of Representatives study.

The study was submitted to parliament on March 28.

POTENTIAL BOOST TO GDP

Casino revenues are made up of three key components. The casino tax is calculated from gross gaming revenue (GGR), which is the revenue generated by each gambler's bet after deducting the casino operator's operating expenses.

Each country or region has a different tax rate for this portion of the revenue.

For example, Las Vegas imposes a tax rate of 10% on GGR, in Singapore the levy is 17% on GGR, and in Macau the rate is 35%.

The government also collects revenue from casinos through licensing fees. In Singapore, the licensing fee is S$28.8 million per casino.

The duration of the licence varies by country: in Macau it is 20 years, Singapore 17 years, and Japan 10 years.

Each government has the authority to consider extending the licence.

Another source of revenue is a casino entry fee. For Singaporean residents age 21 or older, the fee is S$150 (about 4,000 baht) per person for a period of 24 hours.

The annual fee is S$2,000 per person.

The revenue collected from this fee is earmarked for the gambling tax and a fund used to mitigate the social impact of gambling.

In Japan, Japanese citizens and foreign residents age 20 or older can enter a casino only three times every 28 days, with an entry fee of ¥6,000 (about 1,440 baht) per person.

According to the Thai House study, the country could increase tourism revenue by about $12 billion by legalising casinos in large entertainment complexes, which includes efforts to tackle chronic illegal gambling.

Average tourist spending could surge 52% to 65,050 baht per trip once the entertainment hubs are established, netting additional earnings of up to 449 billion baht, according to the study.

The extra income generated could bolster the country's GDP growth by 1.16 percentage points, noted the study.

Do you like the content of this article?
COMMENT (15)