Integrated Resorts of Thailand - Authentic Surprises, Part IV

IGF Special Columnist Muhammad Cohen delves into the ongoing discussions surrounding the legalization of casinos in Thailand. The potential development of Thailand's unique regulatory framework and its departure from conventional integrated casino (IC) models are central to Cohen's analysis.

In "Dance Me Until the End of Time," Bangkok author Christopher G Moore envisions a striking casino tower dominating the Thai capital's skyline. This fictional portrayal inches closer to reality as Thailand's push to legalize gambling gains traction. However, much like in Moore's narrative, the realization of an actual integrated resort in Bangkok remains a distant prospect.

Thailand seems poised to approve "entertainment complexes"—a term encompassing integrated resorts with both casinos and non-gaming attractions. Yet, the specifics of these complexes, including their formats, locations, and potential operators, remain uncertain. 

IC: Licensing Rules and Foreign Investors

A preliminary draft approved by Prime Minister Srettha Thavisin's office in April 2024 outlines the framework for integrated resort (IR) licensing in Thailand. The draft provides for up to five IR licenses, each located within 100 kilometers of international airports. Licenses will be valid for 20 years, with a minimum investment requirement of 100 billion Thai baht (approximately $2.8 billion / £2.17 billion / €2.52 billion) and a 17% tax rate on gambling revenue. The primary objective of establishing integrated resorts in Thailand is to boost tourism.

Several of the world's largest casino operators are eager to enter the Thai market. Las Vegas Sands Chairman and CEO Robert Goldstein reaffirmed the company's interest in expanding into Thailand in its first-quarter earnings report. Similarly, Wynn Resorts CEO Craig Billings expressed enthusiasm for the opportunity. MGM Resorts and Hard Rock International also show strong interest in investing in Thailand, a country with a population of 66 million that welcomed 40 million foreign visitors in 2019, making it the eighth most visited country in the world. Last year, Thailand saw a rebound with 28 million international tourists.

Capital Growth in Thailand: Potential Integrated Resorts Near Bangkok

International operators have set their sights on Bangkok, which has topped Mastercard's World City ranking for the past two years. In 2019, Bangkok welcomed 22.8 million foreign visitors, surpassing Paris and London by 3.7 million. Despite this, current legalization proposals recommend developing integrated resorts (IRs) outside the capital and in "adjacent to Bangkok" areas.

"I have no idea what 'adjacent' means," remarks Destination Capital CEO James Kaplan. "On one hand, the government specifies that IRs should be within 100 kilometers of international airports, but on the other, it mentions surrounding areas. I hope further clarifications and details will be provided over the next six months."

"There is no problem with location restrictions, but let's choose the best locations available that will maximize tourism development and generate high income," urges B Global managing partner Brendan Bussmann.

Despite the commercial appeal of central Bangkok, there seems to be a consensus against licensing IRs in the city center. Promising potential locations outside the city limits, accessible by public transport, include Bang Na in the south, known for its large shopping mall, and Muang Thong Thani in the north. Muang Thong Thani hosts Impact, a vast commercial complex featuring an arena, exhibition and conference halls, two shopping centers, and nearly 1,000 hotel rooms, attracting up to 10 million visitors annually.

These areas, adjacent to Bangkok, offer commercially viable options for developing integrated resorts.

Pattaya: The Thai Las Vegas?

The beach resort city of Pattaya, located 150 kilometers south of Bangkok, emerges as a highly attractive option for constructing integrated resorts (IRs). Situated within Thailand's Eastern Economic Corridor, which is slated for further development, Pattaya was ranked 15th globally in 2019, with 9.4 million international visitors. Notable initiatives are already underway to enhance Pattaya's potential as a hub for IRs.

Suranand Vejjajiva, former chief of staff to Prime Minister Yingluck Shinawatra, highlights that Pattaya "has all the necessary infrastructure." With existing entertainment centers and ongoing development, the city could evolve into a Las Vegas-style destination, serving as a major entertainment and tourism hub for gamblers.

The local U-Tapao Airport supports charter flights and complements Bangkok's main Suvarnabhumi Airport, which is a 90-minute drive from Pattaya. In 2022, the government approved plans to expand U-Tapao's capacity to accommodate 60 million passengers annually, further boosting Pattaya's appeal as a prime location for integrated resorts. 

Phuket and Chiang Mai: Integrated Resorts or Family Getaways?

Suranand Vejjajiva suggests that Phuket and Chiang Mai could also be suitable locations for integrated resorts (IRs) due to their existing infrastructure. However, he acknowledges that opposition to casinos in these cities might be stronger than in Pattaya.

Chiang Mai, nestled in the mountains of northwestern Thailand, attracted 5.6 million foreign tourists in 2019 and 3.9 million last year. The majority of flights to Chiang Mai are direct routes from China. Although the number of tourists dropped from 878,984 in 2019 to 200,982 in 2023, the city remains a significant destination. Prime Minister Srettha Thavisin, who also serves as Minister of Finance, has appointed Deputy Finance Minister Julapun Amornwiwat, a Chiang Mai representative in Parliament, to oversee the legalization of casinos. Julapun's strong regional ties and political influence make experts optimistic about the city's potential for IR development.

Phuket, a renowned beach destination, and Chiang Mai, a cultural and historical hub, traditionally cater to family-friendly tourism. These locations are popular for their family-oriented attractions and activities, which could pose challenges in gaining local approval for IR construction. While both cities have the necessary infrastructure to support IRs, shifting their image from family resorts to gambling hubs may not be straightforward.

In conclusion, while Phuket and Chiang Mai have the potential for integrated resort development, overcoming the regions' family-friendly reputations and local opposition will be crucial for any future IR projects.