JP Morgan Foresees $2.5bn-$5bn Annual Revenue for Bangkok’s IRs

Thailand, a country that strictly bans gambling except for state-controlled horse races and an official state lottery, will soon hit the refresh button in this department thanks to an important preliminary framework from the Parliament endorsed by Prime Minister Srettha Thavisin’s cabinet in April. 

The daring framework, which included up to five licenses for IRs across Thailand located within 100km of international airports for a minimum investment of 100 billion Thai baht ($2.8 billion), was primarily aimed at boosting tourism. 

According to JP Morgan’s latest assessment, Bangkok’s upcoming IRs are expected to generate anywhere between $2.5 billion and $3 billion annually, with potential earnings reaching as high as $5 billion. 

Foreign Tourists, the Driving Force 
The fact that IRs serve as powerful drivers of development, providing a dynamic mix of tourism, job creation, and economic growth opportunities is of no news to anyone nowadays.

Moreover, it is well known that, attracted by the luxurious amenities and unique experiences that IRs provide, tourists are inclined to spend more, contributing to a substantial boost in the local economy.

Following this train of thought, the investment bank argued that the driving force behind their projected revenue surge in Thailand is expected to be foreign tourists, who are forecasted to contribute more than half of the revenue.

The analysis, released on Wednesday, offers a detailed outlook on the revenue potential for IRs, referred to locally as “entertainment complexes,” based on three key demographic groups: Bangkok residents, regional Thai visitors from outside the capital, and foreign tourists. 

The report suggests that annual revenue could range from $2.5 billion to $3 billion provided one or two licenses for IRs are issued in Bangkok. 

However, in case the city boosts the number of awarded licenses to three, revenue could soar to $5 billion.

“Unsurprisingly, gross gaming revenue (GGR) from casinos—despite occupying only ~5% of gross floor area—will likely drive 90%+ of total revenues, and we estimate 50%+ of revenues to be from foreign tourists,” the report states.

The Thai Gaming Market to Reach Up to $5bn in Size in 2033
The analysis also projects the size of Thailand’s gaming market in 2033 to be between $1.5 billion and $5 billion annually. 

For comparison, in 2023, Macau casinos generated $27 billion in revenue, with $4 billion from non-gaming activities. 

Singapore, which recently gave the green light to cashless gambling in casinos, followed with $7 billion (including $1.8 billion from non-gaming), while the Philippines generated $5 billion. South Korea brought in $2 billion.

Just last month, it was announced that the Philippines was awaiting the construction of a new integrated resort, set to begin in 2025 under Alliance Global Inc’s Travellers International Hotel Group Inc. 

Singapore, a Valuable Model for Bangkok
JP Morgan benchmarked Bangkok against Singapore, citing similarities in population and urban scale but also highlighting key differences. 

“Thailand may offer more diverse tourist attractions than Singapore, potentially resulting in lower casino conversion rates among tourists and locals,” the bank noted. 

Additionally, lower income levels among Thai locals compared to Singaporeans could reduce local spending, especially given the higher entrance fees proposed for Thai casinos.

Despite these challenges, JP Morgan considers Singapore’s successful integration of casinos into its entertainment and tourism sectors as a valuable model for Bangkok.

What to Expect from Thai IRs 
Currently, a draft casino bill working its way through Thailand’s parliament proposes entertainment complexes that would feature a maximum gaming area of 5% of the total floor space. 

They would also offer 30-year licenses to operators. The latter would generate annual EBITDA of $400 million to $1.5 billion, with profit margins ranging between 25% and 35%. 

Such developments could also boost Thailand’s GDP by up to 1%.

The IRs would also likely attract international investors including a variety of global gaming giants like Las Vegas Sands, MGM Resorts, Wynn Resorts, and Galaxy Entertainment Group.