Post by Blitz on Nov 13, 2024 9:26:48 GMT -5
Thailand set to outpace Singapore as world’s third-largest gaming hub: Citigroup
By Viviana Chan - November 13, 2024
agbrief.com/intel/deep-dive/13/11/2024/thailand-set-to-outpace-singapore-as-worlds-third-largest-gaming-hub-citigroup/
Thailand is on the brink of becoming a major player in the global gaming industry, with projections suggesting it could surpass Singapore to become the third-largest market in terms of gross gaming revenue (GGR), according to a new “Super Sector” report from Citigroup.
The report, authored by analysts George Choi and Preenapa Detchsri, estimates that Thailand’s GGR could reach a staggering $9.1 billion once the market is fully developed. This would place Thailand behind only Macau and Las Vegas in the global rankings.
The projections are based on the assumption that the government will award two casino licenses in Bangkok and one each in Pattaya, Phuket, and Chiang Mai.
In terms of profitability, Thailand appears to have a competitive edge. ‘With a lower gaming tax rate of 17 percent and reduced operational expenses (mainly in wages and utilities) compared to Singapore, we believe EBITDA margins could reach 40 to 50 percent,’ the report highlights. This indicates that the industry could generate EBITDA of approximately $4.1 billion in Thailand once the sector is fully ramped up.
A study released earlier this year and submitted to the Thai parliament suggests that once integrated resorts (IRs) with casinos are established, average tourist spending could increase significantly, potentially rising by 52 percent to THB65,050 ($1,790) per trip.
The study also indicates that legalizing casinos within entertainment complexes in Thailand has the potential to boost tourism revenue by approximately $12 billion while addressing the persistent issue of illicit gambling. Additionally, the extra income generated could enhance the country’s gross domestic product (GDP) growth by 1.16 percentage points.
Swift progress on legalization
The Thai government’s proactive approach toward legalizing gaming is seen as a crucial driver for this rapid market expansion. According to Citigroup, ‘the Thai government has shown its determination in creating a major booster to the tourism industry via gaming legalization, and the speedy legalization progress thus far is a testament to that.’
Citigroup expects the remaining legalization procedures and subsequent request-for-proposals (RFP) process to be managed efficiently at the national level. The timeline for this process is expected to be as fast as Singapore’s two decades ago, with completion likely by mid-2025.
Julapun Amornvivat, Thailand’s Deputy Finance Minister
Deputy Finance Minister Julapun Amornvivat has reiterated the government’s intention to present a revised draft law on Entertainment Complexes to the Cabinet by the end of 2024.
Following Cabinet approval, the administration will forward the draft law for parliamentary deliberation. The House of Representatives is scheduled to reconvene from mid-December until April next year.
According to a previous projection by Maybank Investment Bank, given the accelerating move towards casino legalization, Thailand could see its first Entertainment Complexes by 2029. In this context, Thailand might open its first casino before MGM Osaka, which is scheduled to open in autumn 2030.
Thailand, casino law, casino bill, casino legislation, Integrated Entertainment Business Act
Partnerships between domestic corporations and global casino operators
To increase their chances of securing licenses, both local corporations and global casino giants are expected to form partnerships. The report estimates that global casino operators could see their EBITDAs increase by 15 to 30 percent if they secure investments in Bangkok, particularly through joint ventures with local partners on a 50:50 basis.
Additionally, the development of Entertainment Complexes is expected to provide significant benefits to Thailand’s tourism and construction sectors. Companies such as Airports of Thailand, Minor International, and Central Plaza Hotel are identified as potential beneficiaries due to their strong presence in the hospitality sector. Notably, the U-Tapao consortium has expressed interest in integrating a gaming complex within its Airport City development in the Eastern Economic Corridor.
AI driving significant transformation in the casino industry
Potential game-changer for global gaming
The report underscores the long-term impact of Thailand’s gaming legalization on the global industry. While it may take at least six years for these entertainment complexes to become fully operational, the potential shift in revenue distribution within the industry is substantial.
The report recommends investors to ‘buy into this thesis while it is in the dream phase,’ highlighting Las Vegas Sands (LVS), MGM Resorts, and Galaxy Entertainment as top global picks poised to benefit. All the aforementioned gaming operators have publicly demonstrated interest in Thailand.
By Viviana Chan - November 13, 2024
agbrief.com/intel/deep-dive/13/11/2024/thailand-set-to-outpace-singapore-as-worlds-third-largest-gaming-hub-citigroup/
Thailand is on the brink of becoming a major player in the global gaming industry, with projections suggesting it could surpass Singapore to become the third-largest market in terms of gross gaming revenue (GGR), according to a new “Super Sector” report from Citigroup.
The report, authored by analysts George Choi and Preenapa Detchsri, estimates that Thailand’s GGR could reach a staggering $9.1 billion once the market is fully developed. This would place Thailand behind only Macau and Las Vegas in the global rankings.
The projections are based on the assumption that the government will award two casino licenses in Bangkok and one each in Pattaya, Phuket, and Chiang Mai.
In terms of profitability, Thailand appears to have a competitive edge. ‘With a lower gaming tax rate of 17 percent and reduced operational expenses (mainly in wages and utilities) compared to Singapore, we believe EBITDA margins could reach 40 to 50 percent,’ the report highlights. This indicates that the industry could generate EBITDA of approximately $4.1 billion in Thailand once the sector is fully ramped up.
A study released earlier this year and submitted to the Thai parliament suggests that once integrated resorts (IRs) with casinos are established, average tourist spending could increase significantly, potentially rising by 52 percent to THB65,050 ($1,790) per trip.
The study also indicates that legalizing casinos within entertainment complexes in Thailand has the potential to boost tourism revenue by approximately $12 billion while addressing the persistent issue of illicit gambling. Additionally, the extra income generated could enhance the country’s gross domestic product (GDP) growth by 1.16 percentage points.
Swift progress on legalization
The Thai government’s proactive approach toward legalizing gaming is seen as a crucial driver for this rapid market expansion. According to Citigroup, ‘the Thai government has shown its determination in creating a major booster to the tourism industry via gaming legalization, and the speedy legalization progress thus far is a testament to that.’
Citigroup expects the remaining legalization procedures and subsequent request-for-proposals (RFP) process to be managed efficiently at the national level. The timeline for this process is expected to be as fast as Singapore’s two decades ago, with completion likely by mid-2025.
Julapun Amornvivat, Thailand’s Deputy Finance Minister
Deputy Finance Minister Julapun Amornvivat has reiterated the government’s intention to present a revised draft law on Entertainment Complexes to the Cabinet by the end of 2024.
Following Cabinet approval, the administration will forward the draft law for parliamentary deliberation. The House of Representatives is scheduled to reconvene from mid-December until April next year.
According to a previous projection by Maybank Investment Bank, given the accelerating move towards casino legalization, Thailand could see its first Entertainment Complexes by 2029. In this context, Thailand might open its first casino before MGM Osaka, which is scheduled to open in autumn 2030.
Thailand, casino law, casino bill, casino legislation, Integrated Entertainment Business Act
Partnerships between domestic corporations and global casino operators
To increase their chances of securing licenses, both local corporations and global casino giants are expected to form partnerships. The report estimates that global casino operators could see their EBITDAs increase by 15 to 30 percent if they secure investments in Bangkok, particularly through joint ventures with local partners on a 50:50 basis.
Additionally, the development of Entertainment Complexes is expected to provide significant benefits to Thailand’s tourism and construction sectors. Companies such as Airports of Thailand, Minor International, and Central Plaza Hotel are identified as potential beneficiaries due to their strong presence in the hospitality sector. Notably, the U-Tapao consortium has expressed interest in integrating a gaming complex within its Airport City development in the Eastern Economic Corridor.
AI driving significant transformation in the casino industry
Potential game-changer for global gaming
The report underscores the long-term impact of Thailand’s gaming legalization on the global industry. While it may take at least six years for these entertainment complexes to become fully operational, the potential shift in revenue distribution within the industry is substantial.
The report recommends investors to ‘buy into this thesis while it is in the dream phase,’ highlighting Las Vegas Sands (LVS), MGM Resorts, and Galaxy Entertainment as top global picks poised to benefit. All the aforementioned gaming operators have publicly demonstrated interest in Thailand.