The Shinawatra family’s exit from Thailand’s political stage rewrites the script for casino legalisation in the kingdom. The initiative to develop Thai integrated resorts can now be considered separated from the polarising political dynasty that championed them.
Dynasty leader Thaksin Shinawatra, jailed for twelve months on 9 September, tried to introduce casinos during his 2001-2006 tenure as prime minister. That tenure ended with a military coup. In August 2023, after his return from 15 years of self-imposed exile, Thaksin became a principal cheerleader for the IR drive under the new prime minister – his daughter Paetongtarn Shinawatra.
Paetongtarn was suspended as prime minister in July and removed by the Constitutional Court in late August over a fawning phone call with former Cambodian leader Hun Sen amid military conflict between the two nations. Meanwhile, Thaksin’s sister Yingluck Shinawatra, prime minister from 2011-2014, remains in exile.
Fresh beginning … in a coma
“This is a fresh beginning for Thailand,” Bangkok-based hospitality advisor James Kaplan says. “It will be looking at integrated resorts with a fresh perspective, hopefully a balanced and more constructive perspective.”
New Prime Minister Anutin Charnvirakul has declared his opposition to casinos. The leader of the Bhumjaithai Party, Anutin promises parliamentary elections by early next year, although they are not legally required until June 2027.
“Gaming legislation is not dead, but it’s in a coma. It could reawaken after the election,” says Kaplan, a board advisor to Bangkok Land, which owns Impact Convention and Exhibition Center, a potential IR site.
“Some observers suggest the [casino legalisation] agenda might reemerge under revised regulations to protect existing arrangements or create new bargaining space, although it is equally possible that shifting political priorities will push it aside,” Maverick Consulting Group partner Ben Kiatkwankul says. “Either way, the debate around [integrated resorts] is likely to remain a tool of political and economic manoeuvring in the months ahead.”
Too hard to rock
The political maelstrom has cost Thailand at least one top tier global casino operator. In an exclusive interview, Hard Rock International Chairman James Allen told iGB his company has “zero interest” in a Thailand IR at this point due to “instability”. (More from that interview will be provided in upcoming coverage.) Hard Rock had considered options in Thailand including a convention-based IR in Phuket.
With falling tourism numbers, a rising currency and mounting debt, the case for entertainment complexes – Thailand’s chosen term for integrated resorts – has never been more compelling. The challenge amid political polarisation and distrust is to rebuild the consensus that produced near unanimous parliamentary support for casino legalisation in March last year.
In some ways, that proposal became victim of its own success. Citing the Thai proverb “ten fires don’t compare to the harm of a single act of gambling”, Kiatkwankul says, “The near unanimous parliamentary approval in March – we saw some of conservative parties raising hands for the bill – only fuelled speculation about behind the scenes political manoeuvring.”
Family affair
When Paetongtarn Shinawatra replaced Srettha Thavisin as prime minister in August last year, she elevated IRs to a cornerstone policy of her Pheu Thai Party government, even though it had not featured prominently in its election platform. IRs came to be viewed as a Shinawatra family initiative.
“I have found that no matter how the media spun it, 50% of the politicians and 50% of the populace supported the Shinawatras. It’s a shame because this means that the remaining 50% did not,” Checkmate Mitigation senior advisor David Leppo says. “How can there be any political congruency with a landscape like that?”
Public distrust deepened with Paetongtarn’s political troubles and Bhumjaithai’s subsequent withdrawal from the ruling coalition. “Their immediate distancing from the bill only reinforced perceptions of political instability and potential hidden agendas,” Kiatkwankul says.
The new government without Shinawatras up front resets the IR issue. “Thaksin is fatally damaged as is his party, and he was the main [IR] promoter,” longtime Bangkok corporate communications consultant Julian Spindler says. “There’s little the foreign players can do to change this political situation, but they should use this downtime to educate the Thai public as to the required regulatory environment à la Singapore.”
Pokies in every pot
“They’re hearing this idea that Thailand is going to have a pokie machine in every lavatory and every 7-11, à la some other countries – my own Australia being an example,” Silq Law founding partner Paul Crosio says.
Leppo, a longtime sports book operator in North America and Asia, sampled public attitudes at anti-casino demonstrations in Bangkok. “About 70%-75% of the people I spoke to felt that the industry would attract an undesirable demographic, laying the foundation for organised crime to thrive, when in fact, in jurisdictions like Singapore, casinos have had the exact opposite effect.
“These same people also had the misguided opinion that casinos would lead to problem gambling, when in fact, just like Singapore has proven and delivered, programmes like Gamblers Anonymous are funded by Singapore’s casinos, which could be mirrored here in Thailand.”
Striking a balance
“Problem gaming is not a solely Thai phenomenon,” Kaplan says. “Governments such as Singapore recognise the need to strike a balance between tourism relevance, job creation and tax revenue while mitigating the challenge of problem gaming. Just because Thailand delays implementation of the gaming bill doesn’t mean people won’t gamble. They still will, and they’re taking the money outside country.”
A recent study estimates Thailand’s underground gaming economy at more than US$30 billion annually, including domestic underground casinos, border casinos in Cambodia, Laos and Myanmar plus online gambling.
How much of that money legalised Thai gaming would capture depends on the regulatory scheme. Under the Pheu Thai government, cabinet ministers proposed an entry requirement for Thai nationals of 50 million Thai baht (US$1.6 million) in bank deposits alongside a THB5,000 entry tax. The mooted THB50 million entry requirement highlights conflicts in Thailand’s casino legalisation objectives and an under-informed approach to gaming regulation.
Only a handful of Thailand’s 70 million citizens would qualify for casino entry under the THB50 million rule. That scenario would satisfy underground gaming interests currently catering to Thai gamblers, while placating groups that don’t want more Thais (openly) gambling. However, making Thailand a virtual foreigner-only casino market would limit international operator interest and IR investment, paradoxically making any IRs less tempting for tourists, decreasing potential tax revenue and employment.
Regulatory irregularity
The draft regulatory scheme placing the prime minister and cabinet members at top of the pyramid ignores international best practices and lacks social safeguards. Thai officials reportedly did not consult with other jurisdictions or international experts when drafting gaming regulations.
“The regulations need to be sound and transparent. They need controlled and trusted supervision of a gaming board,” Global Chain Ltd managing partner Harmen Brenninkmeijer says. “There are enough examples around the world of what makes IRs work. Investors know the potential, but the regulatory and judicial climate need to support their investments, and they need to feel protected. If not via the judiciary, the gaming board can take that role solely.”
“They need to establish a regulatory committee of gaming professionals and gaming legal scholars to outline and deliver a legal mantra that will ensure groups like Sands, Wynn, Genting, MGM, Galaxy, et al feel comfortable investing here in Thailand,” Leppo says.
Simultaneously, Thailand needs to placate current stakeholders in its underground and cross-border gaming sector, as well as ease public concerns over problem gambling and other social impacts.
Lonely in the middle
This challenging agenda amid political turmoil has convinced many that Thailand will abandon casino legalisation. However, the conditions that led the kingdom to consider and, at least briefly, embrace IRs have become more acute.
On the tourism front, Thailand now sees itself occupying uncomfortable middle ground between cheaper alternatives such as Cambodia and Indonesia – particularly as the baht rises to post-Covid highs – and upmarket destinations like Singapore, South Korea and Japan.
As of 7 September, foreign visitor arrivals had fallen 7.1% from a year earlier to 22.3 million, 25% below 2019 figures. Visitor expenditure has fallen more sharply with the drop in high-spending Chinese tourists; Chinese arrivals this year are nearly 1.5 million below last year’s level.
Thai tourism ‘sliding downhill’
“The Thai tourism industry is going in reverse, sliding downhill with increasing speed, which should worry policymakers, especially as this industry makes up roughly 18% of direct GDP,” Kaplan says. “The knock-on effect to the broader already weak economy is a serious concern. The situation is expected to become worse during the high season due to the irrationally strong baht, regional instability with Thailand’s neighbours and call centre scams putting people off visiting the country.”
Thailand’s economy is projected to grow 2% this year. That is half the rate of fellow ASEAN members Philippines and Indonesia. Ahead of Anutin forming his government, Thailand’s main stock market index was Asia’s worst performer this year, down 10% versus a 17% rise in the regional benchmark.
Gaming taxes would provide the Thai treasury with much-needed revenue amid ambitious economic stimulus plans following Covid relief spending. Thailand’s tax revenue is estimated at 15% of GDP, three percentage points below the ASEAN average.
Human face of debt
Thailand’s public debt, 67.9% of GDP, has drawn a warning from the International Monetary Fund. The spending plan approved by parliament early this month projects a THB860 billion budget deficit, 4.3% of GDP.
“Integrated resorts are part of a broader solution needed to stimulate the Thai economy with significant direct foreign investment, employment and tax revenue,” Kaplan says. “If you look at the big picture, household debt and public debt are totally out of control. Car loan defaults are at new records, shops are vacant and businesses are closing down at increasing levels. It’s bad. You can see it on people’s faces.
“I am not saying legalised and regulated gaming is the solution to this economic malaise, but instead IRs should be viewed as part of the solution in the context of rejuvenating, stimulating and, most importantly, sustaining the critical tourism industry in a competitive world.”
Polishing the gem
An IR “is something that Phuket needs to stay the gem in the crown of Thai tourism,” says Crosio, who splits time between Bangkok and Phuket. “The client base in Phuket is much more upscale than it would be in other locations. So it’s ideal here.”
Crucially, leading Thai business groups remain enthusiastic about investing in IRs. “I firmly believe that Thailand can be compared with Mexico and what I believe will be eventually Brazil: the casinos and ownership – surely the majority – is to be in the hands of locals to keep the money within the country,” says Brenninkmeijer, a senior advisor on SkyH’s IR proposal near Bangkok’s gateway Suvarnabhumi Airport.
He describes SkyH as “an entertainment complex designed to attract local investment, with every aspect of its design and planning tailored to meet Thai expectations. The complex will feature a central, unified theme that blends luxury with a wide array of entertainment options. It is poised to become a major attraction for tourists, driving increased visitor numbers.”
Electoral elephant
Whether IRs get beyond the drawing board soon awaits the outcome of the next election. Casino legalisation will likely be the elephant in the ballot box, with no party making IRs a major plank in its platform.
In 2023 lower house elections, the progressive Move Forward Party won the most seats but was thwarted by conservative forces in its attempt to form a government. Move Forward was subsequently ordered to disband and its leader barred from politics, leading to public outcry and reduced faith in the political process. The upcoming election, with Move Forward reconstituted as the People’s Party, could yield similar results with comparable controversy.
It’s worth noting that despite the discord surrounding the 2023 vote, lawmakers across party lines did join hands to embrace IRs, at least momentarily. The same thing could happen again. After all, every major Thai political party was for integrated resorts before it was against them.
Full disclosure: Author Muhammad Cohen has signed client referral agreements with Maverick Consulting Group and Checkmate Mitigation.
Muhammad Cohen is a former US diplomat and current iGB Asia editor at large. He has covered the casino business in Asia since 2006, most recently for Forbes, and wrote Hong Kong On Air, a novel set during the 1997 handover about TV news, love, betrayal, high finance and cheap lingerie.
The case for Thai integrated resorts strengthens as kingdom’s economy, tourism weaken.