Entertainment complex: An economic opportunity or a social risk?

The Thai government’s entertainment complex bill is scheduled for its first reading in Parliament during the ordinary session in July. Prime Minister Paetongtarn Shinawatra has instructed all Cabinet ministers from every political party to ensure that society fully understands the proposal.

The bill aims to promote a new form of tourism by introducing man-made destinations, which could help attract tourists, stimulate investment, and generate revenue for the country. It also seeks to enhance employment opportunities while bringing legalised casino and gambling businesses under a regulated system, ensuring proper revenue and tax collection.

Citing data from Rocket Media Lab, which studied surveys across 195 countries and territories worldwide, the PBO reported that 121 countries (62.05%) have casinos. 

South America has the highest proportion, with 91.67% of its countries hosting casinos (11 out of 12), followed by North America at 73.91% (17 out of 23), and Europe at 73.33% (33 out of 45). Asia, however, has a much lower percentage, with only 36.73% (18 out of 49 countries) allowing casinos.

Religious and cultural factors play a significant role in the decision to permit casinos. Most countries without casinos have a predominantly Muslim population. Among those with casinos, operational models vary:

• Casinos that serve both tourists and local residents, common in Europe and North America.
• Casinos exclusively for foreign tourists, aimed at boosting tourism and tax revenue, such as those in the Dominican Republic, Tunisia, Samoa, and Turkmenistan.
• Casinos in designated areas, such as Goa in India, Macau in China, and Genting Highlands in Malaysia.

Impact on Thailand’s economy

PBO has revealed the short-term economic impacts of the entertainment complex project, based on an economic impact analysis using an input-output model. The initial government investment is expected to be no less than 100 billion baht, with significant economic effects as outlined below:

• Impact on gross domestic output: Total output is expected to rise by 182.19 billion baht. The construction sector will experience the highest impact (100.09 billion baht), followed by non-metallic products (19.61 billion baht), services (12.57 billion baht), and trade (9.44 billion baht).
• Impact on total value added: The total value added is projected to increase by 68.11 billion baht, distributed across wages and salaries (21.38 billion baht), operating profits (27.07 billion baht), depreciation (15.14 billion baht), and net indirect taxes (4.50 billion baht).
• Short-term distribution of economic benefits: The impact will be spread across various sectors, including construction (output: 100.09 billion baht, value added: 31.07 billion baht), non-metallic products (output: 19.61 billion baht, value added: 6.67 billion baht), services (output: 12.57 billion baht, value added: 7.49 billion baht), trade (output: 9.44 billion baht, value added: 6.89 billion baht), and mining (output: 9 billion baht, value added: 5.37 billion baht).

Long-term impact according to government objectives

This investment is expected to bring several long-term benefits, including:

• Continuously attracting large-scale investments from experienced global tourism developers.
• Developing a new form of tourism to draw high-quality visitors.
• Creating permanent employment opportunities in the service sector and supporting industries.
• Ensuring sustainable tax revenue by integrating casino and gambling businesses into the formal economy.
• Elevating Thailand’s status as a regional tourism hub.
• Establishing a new business ecosystem that connects local entrepreneurs with high-quality tourists.

Negative impacts of the entertainment complex

While the entertainment complex project has the potential to drive economic growth, it may also lead to significant negative impacts across multiple dimensions:

• Social issues: Gambling addiction may become a widespread problem, particularly among economically vulnerable groups. This could result in household debt, domestic violence, and associated crimes such as illegal lending and money laundering.
• Economic disparities: The project is likely to be concentrated in economically developed areas, potentially leading to an uneven distribution of investment and public services. Rising land prices and living costs in such areas could exacerbate inequality.
• Regulatory risks: If governance and oversight are ineffective, issues such as corruption, money laundering, and human trafficking could emerge, posing threats to the country’s financial system.
• Cultural and social values: The formalisation of casinos may affect Thai cultural values, influencing youth perceptions on wealth acquisition through gambling rather than traditional means.
• Alcohol consumption: Studies indicate a correlation between casinos and increased alcohol consumption, with reports showing that 20% of young gamblers regularly consume alcohol. This may result in direct and indirect economic and social costs, including health issues, accidents, and violence—factors that should be carefully considered in policy planning.

The government should proceed with caution

Additionally, PBO has recommended that the government prioritise three key considerations:

• Balancing economic benefits and social impacts: One of Thailand’s major challenges is maintaining a balance between economic benefits and social safeguards. While 62.05% of countries worldwide have casinos, not all have successfully managed their social consequences. Therefore, Thailand should study both the success factors of leading models, such as Singapore, and the failures of countries that have struggled to mitigate social impacts effectively. Lessons learned should be adapted to maximise long-term economic benefits for Thailand.
• Strategic planning for entertainment complex development: There should be careful planning to ensure a balanced mix of revenue between casino operations and other entertainment activities. Over-reliance on gambling businesses should be avoided, and strict regulatory measures must be in place to prevent potential social risks.
• Equitable distribution of benefits: Wage and salary proportions account for only 31.3% of total value added, whereas operating profits make up 39.8%. This suggests that investors may benefit significantly more than workers, potentially conflicting with Thailand’s goal of income distribution and reducing inequality.