Despite legislative setbacks, MGM committed to Thailand

On 13 March, Hornbuckle and MGM Chief Financial Officer Jonathan Halkyard discussed Thailand on a JP Morgan Gaming, Lodging, Restaurant and Leisure Management webcast.

Hornbuckle acknowledged that passage of the kingdom’s Entertainment Complex bill “won’t go as fast as I would like to think it will” in light of public opposition. But, he added, it “doesn’t need to take as long as it did in Japan”.

The Japanese parliament approved casino legislation in 2018 but did not issue its first (and only) licence to MGM until 2023. Covid interrupted the process, but analysts also blamed the ponderous pace of regulatory debate.

As for Thailand, Hornbuckle said: “I would like to think by the first or second quarter of 2026, there’s real legislation and a real process that’s been identified.”

“An amazing marketplace”

The CEO called Thailand “an amazing marketplace” that would be “cheap to build – 35 cents to 40 cents on the dollar – and even cheaper to operate.

“So if you were lucky enough to get a licence and build something of substance, it’s a meaningful market. And I think the margin in that business would be pretty extensive.”

Estimated gross gaming revenue of up to 308 trillion baht (£7 billion/€8.36 billion/$9.1 billion) per year would make Thailand the world’s third-largest market after Macau and Las Vegas.

That’s got major gaming operators lining up to bid. Melco Resorts & Entertainment has already opened a Bangkok office. Others in the queue include Galaxy Entertainment Group, Wynn Resorts, the Las Vegas Sands Corp and Genting Singapore, as well as MGM.

If the US-based operator gets a nod, the project would likely fall under the MGM China umbrella, said MGM chief financial officer Jonathan Halkyard, according to a transcript published on Investing.com. The unit’s balance sheet “is really under-levered compared to the performance of that business and its prospects”, Halkyard said. “So that’s the appeal potentially of using that balance sheet as a vehicle to develop property in Thailand.”

But obstacles remain

Proponents of the plan originally wanted to open the first entertainment complexes in 2029. That would give Thailand’s industry a head start on Japan, where MGM Osaka will debut in 2030.

That outcome now seems unrealistic. The proposal faces considerable opposition from the public and anti-gambling activists. Even the Council of State, a government advisory body, has complained that the bill is more about gambling than entertainment and that it fails to include safeguards against problem gambling.

Last week, following demonstrations in front of the Government House in Bangkok, Prime Minister Paetongtarn Shinawatra suspended review of the bill, which was to have returned to the cabinet for approval. “Let all issues be thoroughly examined first,” she said. “Because Thailand has never had casinos before.”

The 16 March Bangkok Post quoted Chittawan Chanagul, a gambling researcher at Kasetsart University’s faculty of economics, who said the government should heed public calls for a referendum. “It is a fair way to decide the fate of this project,” she said.

She noted that even supporters of the ruling Pheu Thai Party, helmed by Paetongtarn, oppose legal casino gambling.

The Post article suggested that the issue could prove a tipping point for Pheu Thai and trigger “widespread opposition” to the administration. Paetongtarn is already bracing for a no-confidence vote on 26 March.

The regulatory waltz

Meanwhile, industry expert Muhammad Cohen says Thailand “is on the verge of squandering its extraordinary opportunity to add iconic integrated resorts to its tourism menu and become a top five global gaming market because it is not constructing the necessary legal and regulatory framework to accommodate the world’s top casino operators. 

“Japan regulated too heavily”, according to Cohen, “and wound up with just one successful bidder for three licences. Thailand appears to be regulating too lightly and that could have a similarly chilling impact on potential bidders.”

Despite the pause on legislative review, on 13 March lawmakers announced the selection of four casino host sites: Bangkok, Chiang Mai, Phuket and Chonburi.