Legalization of casinos — Will Thailand finally roll the dice?
Thailand took a major step towards legalizing casinos after the House of Representatives voted on December 2 to undertake a feasibility study on allowing gambling dens.
Both the government and opposition MPs have expressed their support to set up entertainment complexes, as new sources of revenue are being eyed after COVID-19 weakened the country’s fiscal position.
Deputy Transport Minister Atirat Ratanasate was picked to lead the extraordinary House committee looking into the pros and cons of legalizing casinos.
Atirat said that three to five sub-panels would look into various aspects. Their study is expected to be concluded within 90 days.
“It is the best chance in 50 years to legalize casinos,” said Sangsit Piriyarangsan, chairman of the Senate standing committee on poverty and inequality reduction.
Sangsit, an economist, has done plenty of research on the gambling issue and has long advocated the opening of casinos in Thailand.
A survey from December 6-8 by NIDA Poll suggested that the majority of 1,318 respondents were opposed to the move.
According to the poll, 46.51 percent of respondents did not agree with the idea of legalizing casinos, as they were worried about people getting tempted to engage in gambling, family conflicts, rise in household debt, and increase in crime.
Some respondents were opposed to casinos being legalized on religious grounds, as they see it conflicting with Buddhist values. However, 21.25 percent supported setting up casinos as a means to generate more revenue for the country and to discourage Thais from making overseas trips for gambling.
Sangsit, however, believes that this time it is different as both government and opposition MPs are backing the move.
“I don’t think the survey by NIDA Poll represents the opinion of the majority of people. MPs have a better idea of popular opinion as they are elected by the people,” said Sangsit.
To address the concerns of people, he suggested strict regulations such as age restrictions and annual income requirements, which could prevent youths and low-income earners from gambling at casinos.
A long wait
Opposition from the public is one of the key factors for the delay in legalizing casinos despite several attempts in the past. The idea of legalizing casinos was floated by the past governments of Thaksin Shinawatra, Samak Sundaravej and Yingluck Shinawatra.
Nattapong Samphaokaew, the coordinator of the youth network against gambling, petitioned House speaker Chuan Leekpai voicing opposition to the legalization of casinos.
Nattapong called for the government to seriously crackdown on illegal gambling and reform the police who allegedly receive bribes from illegal gambling dens.
Potential gains for state coffers
Proponents of the casino legalization move estimate potential revenue of close to Bt200 billion a year.
Nobody really knows until we legalize underground activities, says Sangsit. He estimates at least Bt50 billion to Bt60 billion additional annual revenue for the government.
The government can collect excise tax, corporate tax and value-added tax from the casino activities.
Governments in other countries usually get about 35 to 40 percent of revenue generated by casinos, he said.
Tourism is expected to benefit too, generating more revenue for related businesses besides creating jobs.
Thailand has run fiscal deficits since the 1997 financial crisis due to slower economic growth, resulting in a revenue shortfall for expenditure.
The pandemic has worsened the country’s finances as the government has had to borrow more funds to finance relief packages. Fiscal deficit was as high as 8.7 percent of gross domestic product (GDP) in fiscal 2021. Government revenue in the same fiscal year was 17.7 percent of GDP, while expenditure was 26.4 percent of GDP, up from 23.5 percent of GDP in fiscal 2020. Public debt rose to 58.2 percent of GDP in fiscal 2021, according to the World Bank report.
To increase revenue from casino licensing, the government should invite international bidding for licenses, Sangsit suggested.
While other countries have targeted a niche group of customers who love gambling, Singapore has expanded its customer base to MICE (meetings, incentives, conferences and exhibitions) tourists who attend meetings in Singapore, said Sangsit. Tourists visiting Singapore had doubled after the opening of the casino, he added. Many tourists visit casinos just for fun while they are on business trips in Singapore, he said.
Sangsit suggested that Thailand should learn from Singapore’s experience and take advantage of the large number of tourists visiting the country each year. Close to 40 million tourists visited Thailand in 2019 before the COVID pandemic.
Thailand has several five-star hotels and could build more conference and exhibition centers, he said.
Ideal location of casinos
Bangkok could be the best location as visitors could reach by mass transit trains connecting with international airports. Trains connecting Bangkok with the nearby resort town of Pattaya in the east and Hua Hin in the west will attract more tourists who may want to visit for a few days, said Sangsit.
Thailand declared gambling dens illegal in 1917 to prevent a large section of the population from getting addicted and indebted. Risk takers now have to go to casinos in neighboring countries like Cambodia, Laos, Myanmar, Malaysia, and Singapore. Global gambling hubs, such as Macau and Las Vegas, are household names in Thailand.
Gambling situation in Thailand
A nationwide survey in 2019 by the Center for Gambling Studies at Chulalongkorn University estimated that 76.3 percent of Thai population, or 40.69 million people, was engaging in gambling activities.
The center surveyed 44,050 people and estimated that 57 percent of the population, or 30.42 million people, was involved in gambling in 2019, up 1.49 million from the 2017 survey.
Though the majority of gamblers were in the working-age group, it was a matter of concern that 733,000 youths aged between 15 and 18 were also customers of gambling operators with money in circulation of Bt10.2 billion, according to the report of the center for gambling studies.\
The top five gambling activities were: government lottery, underground lottery, card games, football bets, and high-low and other dice games.
Football betting topped the list in terms of money in circulation, estimated at Bt160.5 billion, followed by underground lottery Bt153.2 billion, and government lottery Bt150.5 billion.
The center estimated that about 5 million people had tried their luck at casinos and 97.2 percent were customers of illegal gambling dens at homes, funeral events, or moving dens — roving from one place to another to escape the police — and 1.2 percent betted at illegal permanent gambling dens in the country. Those who visited casinos in neighboring countries along Thailand’s border represented 0.5 percent, while 0.3 percent flew to casinos in other countries. Total money in circulation is estimated at Bt122.6 billion, according to the center for gambling studies.
The number of people engaged in online gambling in 2019 was estimated at 826,925 with Bt20.2 billion cash in circulation. The report found that 2.9 million gamblers had admitted to suffering daily from running out of cash, stress, indebtedness, family conflicts, health problems, and having less time for job and learning.
By Thai PBS World’s Business Desk