Four out of Macau’s six casino operators are exploring investment opportunities in Thailand, according to a Monday report from brokerage CLSA Ltd. With Thailand considering the legalization of casinos, this move could open new revenue streams for these gaming giants.
CLSA projects that Thailand’s casino industry could generate annual gross gaming revenue (GGR) between $8.5 billion and $30.8 billion, with a base case of $15.1 billion. The report mentions that Galaxy Entertainment Group Ltd, Las Vegas Sands Corp, MGM Resorts International, and Wynn Resorts Ltd have shown interest in this potential market.
“Among Macau gaming concessionaires, we believe Galaxy [Entertainment Group Ltd], Las Vegas Sands [Corp], MGM Resorts [International] and Wynn Resorts [Ltd] have expressed interest in investing in Thailand,” stated the report.
Expansion Plans and Economic Revival
Las Vegas Sands already has a strong presence in Asia through Marina Bay Sands in Singapore, while MGM Resorts is developing the MGM Osaka casino in Japan. Wynn Resorts is expanding with Wynn Al Marjan Island in the UAE. Galaxy Entertainment, despite previously exploring Japan, is still keen on overseas expansion, backed by a robust cash reserve.
Thailand’s lawmakers, burdened by mounting debt from Covid-19, see casino legalization as a means to revive the economy. They have voted to legalize gaming, bringing land-based casinos closer to reality. The proposed gaming licenses would target foreign visitors, valid for 20 years with a 17% tax rate. Investors would need to commit at least $2.7 billion.
CLSA analysts Jeffrey Kiang, Leo Pan, and Naphat Chantaraserekul predict a phased process: one to two years for legalization procedures, followed by three to four years of construction. The first entertainment complex could open by 2029.
On an anticipated $15.1 billion GGR, a 17% gaming tax would bring in almost $2.6 billion a year in gaming tax revenue. In line with margins in Singapore and the Philippines, CLSA anticipates property-level earnings before interest, taxation, depreciation, and amortization (EBITDA) margins to surpass 40%.
There have been five proposed locations for these casinos, including two in Bangkok, one each in Phuket, Chiang Mai, and the Eastern Economic Corridor. At the Global Gaming Expo (G2E) Asia 2024 in Macau, several industry experts, however, issue a warning that Thailand’s casino sector may fall short of the government’s high standards.
Leading casino operators in Macau have expressed interest in Thailand, indicating that the country has the potential to be a profitable market given the right political and economic circumstances.
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