MK Sports-Thailand’s gaming market is expected to reach $15 billion in annual gaming revenue

Thailand’s legalized casino market could eventually generate $15.1 billion in gross gaming revenue annually in the long term, making it the world’s third-largest gaming market, according to an in-depth study by brokerage CLSA.

The study, conducted by analysts Jeffrey Kiang, Naphat Chantaraserekul and Leo Pan, sees an increase in visitors from China and India, as well as the government’s tolerance of the number of table games and slot machines, as positives for the Thai gaming market.

The study is based on an estimated 39 million visitors to the Southeast Asian country each year – expected to reach 35.5 million this year – who spend an average of $386 per person per year, roughly comparable to Singapore.

“Comparing these figures to other markets, Thailand would be the third largest gaming market based on 2023 levels,” CLSA said. “We view Singapore as a good comparison for Thailand given the similarities in terms of location, visitor mix and overall attractiveness as a destination.”

The agency also sees strong returns on investment, predicting that Thailand’s business-friendly environment, relatively low 17% gaming tax rate and uncapped table games will enable it to achieve EBITDA margins of 40% or more when fully operational – in line with margins observed at Marina Bay Sands and Resorts World Sentosa. CLSA said this represents $2.1 billion in gross gaming revenue and $805 million in EBITDA per year for each integrated resort, or a 23.9% return on investment, with a payback period of about four years when fully operational.

CLSA analysts said the Thai government’s efforts to improve tourism infrastructure will pay off in the long term as it will enhance its appeal to key tourism markets such as China and India. Travel penetration in these source markets is currently 0.1% to 0.2%.

Despite this, CLSA does not believe Thai casinos pose a real threat to Macau’s global gaming dominance.

“Macau is likely to remain resilient given its proximity to China and much shorter stays than Thailand (different travel purposes). The key issue for Macau remains a lack of new land and hotel supply rather than a lack of demand,” the brokerage noted.

“While Chinese tourists are likely to be the primary source of Thailand’s post-pandemic tourism rebound, we see significant differences between Macau and Thailand tourism, which will ensure the resilience of Macau’s gaming sector.”-MK Sports