Casinos are considered an important strategy to boost the economy and attract tourists, but global experience shows that without strong regulation, the casino industry can lead to money laundering, transnational crime, and other social issues. Thailand is currently having a heated debate about the "Entertainment Complex" plan, with supporters believing it can drive economic growth, while opponents worry about its social impact.
Neighboring countries' experiences show that casinos can boost economic growth, but are also susceptible to foreign control and can even lead to crime issues. American capital avoids investing in Southeast Asian casinos due to U.S. anti-corruption laws, while Chinese capital dominates the industry in the Philippines, Cambodia, and Myanmar. If Thailand wants to implement casino projects, it must ensure strict regulation to balance economic benefits with social responsibility.
Globally, the casino industry is considered an important means to promote economic growth, increase government revenue, and create jobs. Southeast Asian countries like Singapore, the Philippines, and Cambodia have opened casinos and achieved certain economic benefits in the short term. However, the success of the casino economy is not a universal phenomenon, and some countries lacking effective regulation have fallen into the quagmire of transnational crime, money laundering, and illegal gambling.
Thailand is currently engaged in intense discussions about the "Entertainment Complex" project, which includes casinos and online gambling businesses. Supporters believe this will be a new engine for economic growth, attracting international tourists, increasing government tax revenue, and creating a large number of jobs. It is predicted that the plan could boost Thailand's tourism industry by 5%-10%, bringing in annual tourism revenue of 120 billion to 220 billion Thai baht, and creating tens of thousands of jobs.
However, opponents are concerned about the proliferation of gambling addiction, the deterioration of public security, and the possibility that the casino economy could be monopolized by a few capital groups, leading to further social inequality. Surveys show that 69% of the Thai public opposes online gambling, and 59% do not support the establishment of entertainment complexes that include casinos. This indicates that, despite the potential economic value of the casino economy, social acceptance is still limited.
The casino industry in Southeast Asia is mostly dominated by foreign capital, rather than local enterprises. Here are the developments in the casino economies of the Philippines, Cambodia, and Myanmar:
1 Philippines—Coexistence of Local and Foreign Capital
The Philippine casino industry is relatively mature, with local enterprises like Bloomberry Resorts leading the market, as well as attracting foreign capital, such as from Macau's Galaxy Entertainment Group. The Philippine government gains considerable tax revenue from the casino industry, but at the same time, the country has become a hotbed for money laundering and illegal gambling due to regulatory loopholes.
2 Cambodia—Casino Economy Dominated by Chinese Capital
Cambodia's casino industry heavily relies on Chinese capital, especially in Sihanoukville, which has become a stronghold for Chinese investors. Chinese businessman She Zhijiang entered the Cambodian online gambling market in 2015 and obtained Cambodian citizenship in 2017 to establish a casino company.
However, as the Chinese government strengthens control over overseas gambling, a large amount of Chinese capital has withdrawn, leaving many unfinished casinos and vacant buildings in Sihanoukville, damaging the local economy and putting pressure on government finances.
3 Myanmar—Combination of Casinos and Illegal Economy
In Myanmar, the Shwe Kokko economic zone in Karen State represents the casino economy, developed by Hong Kong-registered Yatai International Holding Group (IHG) and supported by the Myanmar Karen Border Guard Force (BGF).
This area not only involves illegal gambling but has also become a hub for scams, human trafficking, and cybercrime activities, with a large number of Chinese workers being deceived into illegal work, making Shwe Kokko a "dark zone" in the Southeast Asian gambling industry.
Despite the booming casino industry in Southeast Asia, there is little American capital entering. According to Nikkei Asia, the main reason American companies avoid the casino markets in the Philippines, Cambodia, and Myanmar is due to strict legal restrictions on overseas investments by the U.S.
The Foreign Corrupt Practices Act (FCPA), effective since 1977, prohibits American companies from bribing foreign government officials, and any country involved in money laundering or illegal gambling could affect the global operating qualifications of American companies. Additionally, the Foreign Extortion Prevention Act (FEPA), effective in 2024, further strengthens anti-corruption measures, not only punishing bribe-givers but also imposing severe sanctions on bribed foreign government officials.
These regulations mean that if American casino enterprises invest in Southeast Asia, they face high compliance costs and may be subject to investigations by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice. Therefore, compared to the higher-risk Southeast Asian market, American capital is more inclined to invest in regions with more robust regulatory systems, such as Singapore or Las Vegas.
The revenue model of the casino industry varies by country, with different governments adopting different tax policies to manage casino income:
Singapore: Different tax rates for ordinary gamblers and VIP gamblers, and a casino entry fee for local residents to control gambling addiction issues.
Macau: A high casino tax rate of up to 35%, one of the highest in the world.
USA (Las Vegas): A lower tax rate of only 6.75%, with the government relying more on the comprehensive income from tourism, hotels, and dining industries.
If Thailand decides to implement a casino policy, it needs to find a balance between economic benefits and social risks. Casinos are not only engines of economic growth but can also become sources of crime, money laundering, and increased wealth disparity. Without strict regulation, the casino industry could be controlled by foreign capital, rather than truly serving the local economy.
Therefore, if the Thai government wants to advance the "Entertainment Complex" project, it needs to establish a strict regulatory framework, including:
Controlling the proportion of foreign capital to prevent the casino industry from being completely controlled by foreign capital.
Setting high entry fees or a gambler screening system to reduce the risk of gambling addiction among local residents.
Strengthening anti-money laundering regulation to prevent casinos from becoming channels for illegal fund flows.
Enhancing the enforcement of laws to combat transnational crimes related to casinos.
If Thailand can learn from the successful experiences of countries like Singapore and establish a transparent and efficient regulatory system, the casino economy could bring sustainable economic growth to the country. However, without strong regulation, the casino industry could become a source of social problems, ultimately leading to more harm than good.
