Thailand’s potential to develop a substantial casino market is drawing significant attention from investors and industry analysts. According to a recent comprehensive study by brokerage CLSA, the country’s legalized casino sector could evolve into the third largest globally based on annual Gross Gaming Revenues (GGR), reaching an impressive $15.1 billion in the long-term.
Study Overview and Market Projections
CLSA’s 100-page study, authored by analysts Jeffrey Kiang, Naphat Chantaraserekul, and Leo Pan, provides an in-depth examination of Thailand’s future casino market. The study anticipates a significant increase in visitation, with annual tourist numbers projected to rise to 39 million from the 35.5 million expected this year. The average annual expenditure per visitor is estimated at $386, a figure comparable to that of Singaporean tourists.
According to CLSA, these projections position Thailand as a formidable contender in the global casino market. Based on current GGR levels, the study estimates Thailand would rank as the third-largest gaming market in 2023. This forecast positions Thailand as a strong competitor, given its similarities with Singapore in terms of geography, visitor demographics, and overall appeal as a travel destination.
Investment Opportunities and Market Dynamics
The CLSA report highlights several factors that contribute to the strong return on investment (ROI) potential for Thailand’s casino sector. Key among these factors are the country’s business-friendly environment, a relatively low gaming tax rate of 17%, and the absence of a table cap. These elements are anticipated to result in impressive EBITDA margins of 40% or higher, aligning with the margins observed at Singapore’s Marina Bay Sands and Resorts World Sentosa.
The study forecasts that each casino complex could achieve annual GGR of $2.1 billion and EBITDA of $805 million, with a Return on Invested Capital (ROIC) of 23.9% and a payback period of approximately four years once the market reaches full ramp. These figures underscore the lucrative opportunities available for investors in Thailand’s burgeoning casino sector.
Tourism Infrastructure and Market Growth
CLSA also emphasizes that improvements in Thailand’s tourism infrastructure will be crucial for maximizing the sector’s growth. The government’s efforts to enhance tourism facilities are expected to boost the country’s appeal among key tourist markets, particularly China and India. Currently, travel penetration from these markets is relatively low, at just 0.1% to 0.2%, suggesting significant potential for growth.
Comparison with Other Gaming Markets
While the projections for Thailand’s casino market are optimistic, CLSA does not foresee a direct threat to Macau’s dominance in the global gaming industry. Macau’s resilience is attributed to its proximity to China and the different purposes of travel compared to Thailand. Macau continues to face challenges related to limited land and hotel supply, rather than insufficient demand.
The study suggests that while Thailand’s market growth is significant, it will not overshadow Macau’s position due to the unique characteristics and challenges faced by each market.
Thailand’s emerging casino market presents a promising opportunity for investors and industry stakeholders. With projected GGR of $15.1 billion and strong ROI potential, the sector is poised to become a major player in the global gaming industry. The country’s strategic improvements in tourism infrastructure and favorable regulatory environment further bolster its attractiveness. However, while Thailand’s growth trajectory is impressive, Macau is expected to maintain its leading position due to its established infrastructure and strategic advantages.