Thailand is moving closer to legalizing casino gaming, and if that occurs, the market could exceed $15 billion in yearly gross gaming revenue (GGR) once fully developed.
According to CLSA, the Thai casino sector could grow to $15.1 billion in annual GGR in the long run. If that prediction comes to pass, Thailand would rank as the third-largest gaming region globally, following Macau and Nevada. Regarding attendance, CLSA views Thailand's gaming venues as competing with those in Singapore.
"We consider Singapore a good proxy for Thailand due to similarities in geography, visitor mix and overall appeal as a travel destination,” according to the brokerage firm.
Similar to Singapore, Thailand has historically been a popular choice for Chinese travelers — a reputation that may grow with the introduction of casinos. If the Southeast Asian country introduces regulated gaming establishments, the average annual expenditure per visitor might increase to $386, aligning with the amount tourists spend each year in Singapore, as reported by CLSA.
In Thailand, Increased Comparisons to Singapore Casinos
Thailand is presently working to expedite the approval of entertainment zones, which will encompass gaming facilities. Prime Minister Srettha Thavisin is said to desire that policymakers and the Ministry of Finance hasten the process to allow the first casinos in the country to launch before the anticipated 2030 opening of MGM Osaka.
In the past, certain analysts speculated that Thailand's gaming regulations might not attract major US operators like Las Vegas Sands, MGM Resorts International, and Wynn Resorts, yet the country's suggested tax rate of 17% may be too tempting to overlook.
If that percentage is applied to GGR in the nation, it might suggest EBITDA margins of 40% or higher. CLSA observed that this is similar to the margins produced by Marina Bay Sands and Resorts World Sentosa — the two integrated resorts in Singapore.
With 40% EBITDA margins, this suggests $805 million in EBITDA for each entertainment complex that includes a gaming venue, indicating that a return on invested capital of almost 24% could be achievable within a four-year ramp-up period, according to the research firm.
Macau is Capable of Withstanding Competition from Thai Casinos
Although Chinese travelers frequently visit Thailand, CLSA is confident that Macau's geographic benefits will keep it resilient against emerging competition in Southeast Asia.
"Macau will likely remain resilient considering its close proximity to China and much shorter length of stay than Thailand (different purposes of travelling),” concluded the research firm. “The key issue for Macau is still the lack of new land and hotel supply, rather than insufficient demand.”
CLSA noted that India will be an additional key factor in boosting international travel to Thailand. At present, there are almost 400 weekly flights operating from Delhi to Bangkok. The duration of the flight from Bangalore to Bangkok is two hours and ten minutes, while it takes three hours and thirty-five minutes to fly from Beijing to Macau.
