As Thailand considers legal casino resorts, MGM President of Global Development Ed Bowers warns lawmakers to keep the tax rate low and also let local gamblers play.
MGM Resorts International could invest big in the Thailand casino market. But the US gaming giant has a few conditions.
MGM President of Global Development Ed Bowers advises Thai lawmakers to keep the tax rate low — in the Singapore range, about 17% — to attract investment in an increasingly competitive Asian market. Macau imposes a 40% tax rate on casino revenue. And Japan has established a 30% tax rate.
Bowers also warned Thailand to let locals play freely, without undue restrictions. In response to concerns about problem gambling, the government is considering a TBH5,000 ($140) entry fee for Thai nationals.
At one time, it also weighed a “millionaire’s clause” that would require locals to demonstrate THB50 million ($1.5 million) in assets before they could gamble. The latter requirement was dropped when lawmakers realised it would exclude up to 70% of the adult population.
Bowers pointed to Inspire South Korea as a casino at risk of failure because it relies solely on foreign gamblers. The $1.6 billion resort lost $104 million in its first year, sending operator Mohegan Gaming into default. In February, lender Bain Capital seized control of the property, and recently put it up for sale.
Bangkok is prime real estate
In comments to the Bangkok Post, Bowers addressed widespread fears that legal casino resorts will bring gambling addiction and financial crimes, such as money laundering. “Integrated resorts not only have a significant impact on economies and tourism,” he insisted, “they also help eliminate existing problems related to gambling.”
MGM is eyeing the capital of Bangkok for a resort under its brand. The port city benefits from a population of 11.5 million and has sufficient infrastructure to support millions of tourists. Last year, Suvarnabhmi International Airport managed almost 61 million total passengers. Of those, 32.4 million made Bangkok their destination.
For those reasons, two Bangkok resorts could generate sufficient revenue to “surpass Singapore and become one of the largest gaming destinations in Asia”, according to gaming analyst Bo Bernhard.
MGM is already an established player in Asia and one of three US gaming operators in Macau. It is now building the first (and so far only) integrated casino resort in Japan. The sprawling $8 billion complex in Osaka will feature 2,500 hotel rooms, 2,000 slot machines and 200 tables, a 3,500-seat theater, dozens of restaurants and MICE space. Slated to open in 2030, MGM Osaka gives a hint of what the lion may try to bring to a Thailand resort.
But MGM is not the only suitor planning to bid on a Thai casino licence. Melco Resorts and Galaxy Entertainment Group have already opened offices in Bangkok. Wynn Resorts is interested, and so are the Las Vegas Sands Corp, Caesars Entertainment and Hard Rock International.
While Bangkok is the prize, three other locations have been identified as suitable for one of five entertainment complexes: Chiang Mai, Chonburi and Phuket.
