Thailand gets closer to casino legalisation

I think the PI is reaching 'just a little bit' when this guy says the PI could overtake MBS, Sentosa, and Singapore. They just are not that upscale. It's sort of like Mexico's Cancun saying they can beat Orlando's tourism.  

And now this...

Philippines Chief Gaming Regulator Thinks Country Can Overtake Singapore

Posted on: March 15, 2024, Devin O'Connor
www.casino.org/news/philippines-regulator-thinks-county-can-overtake-singapore/

The top official at the Philippine Amusement and Gaming Corporation (PAGCOR) thinks the country’s gaming industry can surpass Singapore’s in the coming years.

Alejandro Tengco, chairman of the Philippine Amusement and Gaming Corporation, works in his office. Tengco thinks the Philippines’ gaming industry can overtake Singapore’s in terms of annual gaming revenue. (Image: Reuters)

PAGCOR Chair and CEO Alejandro Tengco told reporters this week during a media conference that he believes the Philippines’ casinos will eventually generate more annual gross gaming revenue (GGR) than Singapore’s duopoly.

Singapore is home to Marina Bay Sands and Resorts World Sentosa, two integrated resorts respectively owned and operated by Las Vegas Sands and Malaysia-based Genting. Tengco’s forecast is something he sees coming in the not-so-distant future.

If Singapore doesn’t expand, they will plateau. Don’t be surprised if next year we surpass them,” said the chief PAGCOR official.

PAGCOR regulates commercial casinos across the country and in special economic areas like the Clark Freeport Zone in Central Luzon. PAGCOR also operates casinos on the state’s behalf under the Casino Filipino brand.

Already Neck-and-Neck

PAGCOR expects gross gaming revenue to reach a new high of 336 billion pesos (US$6.1 billion) this year, up from last year’s record of approximately $5.1 billion.

Marina Bay Sands generated gross gaming revenue last year of $2.7 billion. Resorts World won about $2.4 billion for a combined haul of around of $5.1 billion. However, Singapore remained under COVID-19 restrictions until Feb. 13, 2023, with foreigner entries before that date allowed only for work and emergency reasons.

Sands and Genting are investing billions of dollars into enlarging, updating, and improving their resorts, capital investments each resort operator pledged in 2019 to the Singaporean government in exchange for their gaming licenses being extended through 2030.

The Philippines gaming industry will benefit from the introduction of several new casinos in the coming years.

The growth is highlighted by Solaire North, a more than $1 billion development in Quezon City. Solaire North, the sister property to Solaire in Manila’s Entertainment City, will come with 550 hotel rooms and a casino floor with 3,000 slots and 200 table games. Bloomberry Resorts is behind the Solaire casinos.

Along with Solaire North, new casinos are being built or considered in Manila, the Clark Freeport, and tourist hotspots like Boracay and Cebu.

Gaming stakeholders in the Philippines are placing big financial bets that the country will gain some of the VIP market share lost by Macau after the Chinese enclave forced out junket groups. Junkets cater to high-end gamblers and work with casinos to bring the high rollers to their private gaming rooms.

PAGCOR Overhaul

After over a decade of consideration, PAGCOR is finally moving to a regulator-only capacity in the coming years.

Tengco plans to divest the state-owned Casino Filipino business by early 2026. PAGCOR currently manages nine casinos and 33 smaller “satellite” casinos.

The Casino Filipino selloff will only happen if PAGCOR’s lofty asking prices are met. The state agency initially said it would seek to raise more than $1.4 billion from selling the properties and gaming licenses.

After little interest emerged from casino companies, Tengco said last summer that the agency would seek $1 billion for the 41 casino properties.

PAGCOR is currently the only gaming regulator in the world that also operates casinos. The conflict of interest has been scrutinized for many years. Tengco says selling the Casino Filipino venues will satisfy ethics concerns.

With MBS as a glowing example, it's hard for me to understand why others would not want to emulate that success model. My guess is fear related to corruption and other vice crime issues outweighs logic and empirical evidence indicating the fears are exaggerated. I would guess Thailand would offer favorable terms. Maybe not overly generous, but still terms good enough to entice the biggest casino-IR companies to opt-in.

Japan is off the table for LVS. It's too bad Japan takes an eternity to try new things. I lived in Osaka for a year and I always thought it was the best spot for a casino-IR. LVS would have built another MBS-like iconic masterpiece there. Nagasaki was going to get a casino-IR but has just 'opted-out' of the lengthy process due to fighting to many battles with government and civic groups. MGM looks to be the only player getting through the process of actually breaking ground for a casino-IR.  I recall, LVS/Sheldon Adelson starting the ball rolling in Japan over 10 years ago... and still not a single piling has gone in to actually begin building the resort.

Here's some background information:

Construction on Japan’s First Casino Begins Five Years After Gambling Legalized

Posted on: December 6, 2023, Devin O'Connor
www.casino.org/news/construction-on-japans-first-casino-begins-osaka/

Japan legalized commercial gambling with as many as three integrated resort (IR) casinos in July 2018. Nearly 2,000 days later, construction on the first project is officially underway.


An aerial view of Yumeshima Island in Osaka Bay where MGM Resorts is beginning site work for its multibillion-dollar integrated resort casino. Construction is to take several years, with MGM officials targeting a 2030 opening. (Image: City of Osaka)

MGM Resorts International, through its joint venture with Japanese financial services conglomerate Orix Corporation, signed its formal IR development with the City of Osaka and Osaka Prefecture in late September. MGM and Orix are equal 42.5% partners in Osaka IR Corporation, with the remaining 15% stake controlled by minor investors, including Panasonic, Kansai Electric, and West Japan Railway.

Osaka IR Corporation officially began construction of its JPY1.27 trillion (US$8.6 billion) scheme on Wednesday with site prep on Yumeshima, an artificial island in Osaka Bay where the 52-acre casino resort will stand, The Japan Times reported. The island spans nearly 700 acres and has been primarily used as a container port.

Before the first piece of steel goes down, some 230 feet to reach bedrock, workers are solidifying the land above to support such a project. The site prep costs are forecasted at $173 million. Osaka IR Corp. is funding the land readiness work, but the Osaka city government has pledged to reimburse the company upon completion of the resort.

Years of Delay

When Japan passed its casino law in July 2018, the country had the attention of nearly every major casino operator around the world. The Land of the Rising Sun was, at the time, considered the biggest market opening since China’s Macau around the turn of the century.

Along with MGM, casino giants that expressed interest in landing one of the three casino licenses included Las Vegas Sands, Caesars Entertainment, Wynn Resorts, Hard Rock International, and Mohegan. Japan’s lengthy rulemaking progressions following the passage of the casino bill led to those companies losing much of their excitement.

The COVID-19 pandemic further slowed Japan’s National Diet in finalizing casino regulations and bidding processes. Sands and its founder and CEO Sheldon Adelson finally had enough, and in May 2020, shocked the global gaming industry by announcing its withdrawal from consideration in Japan.

Sands was, at the time, the world’s largest casino operator by gaming revenue and was strongly believed to be a front-runner for one of the three licenses in Japan. Adelson, who died in January 2021, said at the time that Japan’s framework “made our goals there unreachable.”

Many others followed Sands’ lead in folding on Japan, but MGM stood firm in its unwavering commitment to Osaka.

MGM Osaka

MGM’s Osaka IR will open with three hotels from three distinct brands offering about 2,500 guestrooms. The complex will feature 730,000 square feet of convention space and attractions that “showcase the best of Osaka and Japan.”

The MGM Osaka gaming floor will be limited to 3% of the IR’s total indoor square footage, as dictated by the 2018 gaming bill. Osaka IR Corp. is targeting an opening in 2030.

Japan has only one other outstanding IR bid. It comes from Casinos Austria in Nagasaki. The gaming firm wants to build an approximately $3 billion IR casino destination at Huis Ten Bosch theme park in Sasebo.

Thailand Casinos Inch Closer to Reality, Could Open before MGM Osaka
Posted on: March 29, 2024, Todd Shriber
www.casino.org/news/thailand-could-see-its-first-casino-before-mgm-osaka-opens/

Thailand is getting closer to legalizing casino resorts after its House of Representatives on Thursday easily passed legislation allowing entertainment complexes, which would include gaming venues.

Legislators meet in Thailand’s National Assembly. The country is getting closer to approving casinos and it could see its first before Japan. (Image: South China Morning Post)

Of the 257 House members in attendance, 253 voted in favor of the casino gaming legislation. Deputy Finance Minister Julapun Amornvivat said a casino feasibility study could now be advanced to national government’s cabinet. Assuming momentum continues building, it’s possible the first gaming venue in Thailand could open its doors before MGM Resorts International’s (NYSE: MGM) Osaka integrated resort. The first Japanese casino hotel is expected to open in 2030.

Assuming two years to finalise a regulatory framework and three years to construct, the first entertainment centre may only open in 2029 (in Thailand),” said Maybank Investment Bank in a note to clients today.

Should Thailand’s national cabinet formally approve entertainment complexes, it’s possible that up to eight such venues will be permitted and it’s likely that awarding of gaming licenses will occur in phases.

Thailand Casinos Could Beat Japan Efficiency, Emulate Singapore Model

Owing to its reputation as major tourist destination in Southeast Asia and its penchant for attracting visitors from China and the West, Thailand was already expected to attract some of the gaming industry’s biggest names in terms of bidding for casino permits.

That scenario could be amplified should the Thai government continue displaying efficiency in the legalization and regulatory process. Delays and lack of clarity on those fronts are why so many of the industry’s largest operators eventually threw in the towel on Japan, leaving that country with just the MGM Osaka venue to start its move into casino gaming.

Analysts also expect Thailand’s casino framework will be closer to that of Singapore than Macau and low tax rates could be another draw to international operators.

“Proposed gaming tax rates are low at 17 percent and social safeguards à la [in the manner of] Singapore will be proposed,” noted Maybank analysts.

Singapore is home to just two integrated resorts, which are operated by Genting Singapore and a unit of Las Vegas Sands (NYSE: LVS).

Other Thailand Casino Details

Should the country proceed with the 17% tax rate on gross gaming revenue (GGR), Thailand would have the second-lowest casino taxes in region after only Cambodia. That plus expected 20-year license terms with renewals possible every five years could be to the liking of operators. There’s also talk that the largest required investments could be in the $2.5 billion to $3 billion range — easily approachable for any number of operators that could be interested in Thailand.

Maybank said the Thai government likely has preferences for the initial entertainment complexes to be located in some of 13 desired locations in the eastern, northern, northeastern, and southern parts of the country. The country’s prime minister will steer a committee to evaluate casino bids.

It’s expected that Thai entertainment complexes featuring casinos could boost tourism spending in the country by as much as 52% annually. That’s one reason why the country will likely draw bids from some of the biggest names in the gaming industry.

Thailand could open first casino by 2029 ahead of MGM Osaka

By Viviana Chan - April 2, 2024
agbrief.com/news/thailand/02/04/2024/thailand-could-open-first-casino-by-2029-ahead-of-mgm-osaka/

Amid an accelerating move towards casino legalization in Thailand, the country could see its first Entertainment Complexes (EC) by 2029, according to research by Maybank Investment Bank.
In this context, Thailand could open its first casino before MGM Osaka, which is scheduled to open in Autumn 2030.

According to the most updated information, in addition to Thailand proposing gross gaming revenue (GGR) be taxed at 17 percent, the second lowest in ASEAN after Cambodia, the country is expected to develop the industry on a large scale. As Japan has only issued one casino license, according to initial planning, Thailand may house 5-8 ECs.

Analyst Samuel Yin Shao Yang from Maybank notes that favored locations are in the Eastern Economic Corridor (Rayong, Chonburi, and Chachoengsao), the south (Phuket, Phang Nga, Krabi), the north (Chiang Mai, Chiang Rai, Lampang), and the northeast (Nong Khai, Udon Thani, Khon Kaen, Nakhon Ratchasima).

These locations are also in the midst of building/upgrading their airports (Eastern Economic Corridor, south), ports (Eastern Economic Corridor), and high-speed rail (north and northeast). The whole idea of ECs is to attract more tourists to Thailand. Assuming 2 years to finalize a regulatory framework and 3 years to construct, the first EC may only open in 2029.

In addition to the attractive conditions, Maybank notes that corporate tax rates of 20-30 percent will be levied on pre-tax profit. Locals will be subject to a yet-to-be-determined casino entry levy and will be prohibited from entering casinos if requested by court orders or family members. License bidders must be locally incorporated and have paid-up capital above THB10 billion ($270 million).

The initial license duration is 20 years but renewable every 5 years. Four different investment sizes are envisioned, but the first phase of licenses will be for the largest, commanding a minimum capex of THB100b ($2.7 billion).

Genting Singapore and NagaCorp most at risk

The research team from Maybank considers that Genting Singapore and Cambodia’s NagaCorp are ‘most at risk,’ citing the low tax rates and social safeguards à la Singapore will be proposed.

Meanwhile, Genting Malaysia’s Resorts World Genting could be less impacted, citing less than 20 percent of their GGR is derived from foreigners.

‘We are more concerned for Genting Singapore’s Resorts World Sentosa where we estimate that 60 percent of GGR is derived from foreigners, when VIP is about 80 percent, mass market with 40 percent.’

Regarding NagaCorp’s Naga 1 and 2, where almost all their GGR is derived from foreigners, currently only Cambodians who hold foreign passports can gamble in Cambodia.

‘Yet, recall that many who had believed that Malaysian GGR would fall after the Singaporean integrated resorts opened in 1H10 were proven wrong', notes an analyst.

Meanwhile, both Genting Singapore and NagaCorp are investing heavily to upgrade their properties, with Genting Singapore even expressing interest in bidding for a Thai EC license. Thus, their eventual fates may be a lot less dire.