As the gambling industry looks for new opportunities outside of Macau, two prominent casino operators are exploring the possibility of entering the Thai market. While legal restrictions need to be removed for entry, the industry remains hopeful about the changing landscape. Despite a leadership transition in Thailand, a casino resort proposal has gained bipartisan support and is likely to be approved by the new government.
According to anonymous sources, Galaxy Entertainment Group and MGM Resorts International are studying the potential of opening casino resorts in Thailand. Galaxy, a gaming, retail, and hospitality group controlled by billionaire Lui Che-woo, is also considering gaming operations in the United Arab Emirates.
The move to enter new markets is driven by casino operators’ concerns about the declining outlook for Macau. China has expressed a desire for the enclave to shift its focus from gambling to entertainment, resulting in a crackdown on high-rollers and increased scrutiny of gaming activities.
While the reopening of China has led to a surge in tourism, helping Macau’s gaming revenue reach about 60% of pre-Covid levels in May, it is expected that the boom may fade later this year as pent-up demand subsides and more Chinese travelers head overseas due to increasing flight capacity. It will also take time for Macau to develop additional attractions and non-gaming events to replace the revenue previously generated by VIP gamblers.
With the potential legalization of casinos in both Thailand and the UAE in the coming years, operators are eager to gain an early advantage. Thailand is a popular tourism destination, particularly for visitors from other parts of Asia, with Chinese tourists accounting for a significant portion of foreign arrivals.
The UAE has the potential to generate annual gaming revenue of up to $6.6 billion, potentially surpassing Singapore, which is home to the renowned Marina Bay Sands resort. Galaxy has already established offices in Thailand and the UAE to promote its operations in Macau and gather on-the-ground information. MGM, which is set to manage an entertainment resort in Dubai, has also established a base in Thailand and engaged with a Thai parliamentary committee exploring the legalization of casinos.
While it remains unclear what legislation the new Thai government will enact, the committee’s proposal to establish several casino resorts was approved by the House of Representatives in January. Las Vegas Sands Corp has also expressed interest in Thailand, with CEO Robert Goldstein expressing a desire to have a presence in the market.
Galaxy and MGM are well-positioned financially for expansion. Galaxy has maintained a strong cash position due to its conservative financing and spending strategy, while MGM’s asset-light model has allowed it to generate cash through property sales. Sands’ recent $6.25 billion sale of its Las Vegas properties has also provided the company with ample funds.
While there have been early discussions about legalizing gambling in the UAE, with some operators engaging in informal talks with authorities, there are no immediate plans to allow gambling according to senior government officials. However, the announcement of Wynn Resorts Ltd’s plans for a $3.9 billion “gaming” resort has fueled speculation that the ban in the UAE may be lifted.
In conclusion, Galaxy Entertainment Group and MGM Resorts International are considering entry into the Thai market, as they seek new opportunities outside of Macau. With the potential legalization of casinos in Thailand and the UAE, operators are positioning themselves for expansion and anticipating further developments in the coming months.
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