A legalized casino industry in Thailand would make it the third largest gaming market in the world, and bigger than Singapore, according to a new research note from Citi.
According to analysts George Choi, Preenapa Detchsri and Timothy Chau, Thailand is already shaping up as a compelling investment opportunity that will “likely reshape the revenue pie of the global gaming industry” – even with first opening expected to be at least six years from now.
“We estimate Thailand’s gross gaming revenue could reach US$9.1 billion when fully ramped, with the assumption that two licenses will be awarded to Bangkok and one each to Pattaya, Phuket and Chiang Mai. This will rank Thailand ahead of Singapore and only behind Macau and Las Vegas [at current GGR levels].
“In light of the lower gaming tax rate at 17% and the lower opex (mostly wages and utilities) versus. Singapore, we believe EBITDA margin could reach 40% to 50%, which implies that Thailand could see industry EBITDA of US$4.1 billion.”
While then report does not take into account the rise of the Philippines, which some industry commentators believe could reach US$10 billion in GGR in the coming years, Citi expects Thailand’s legislation process to be swift – not unlike the Singapore process of the mid-2000s and “much faster” than Japan.
Las Vegas Sands, MGM Resorts and Macau’s Galaxy Entertainment Group are named as the investment bank’s top operator picks, most likely as part of consortia with domestic corporations.
“We estimate global casino operators could see their EBITDAs increase 15% to 93% if they are approved Entertainment Complex Investments in Bangkok (assuming a 50:50 JV with domestic partners),” the analysts wrote.
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