Buoyed by a low casino tax rate, a solid base of foreign tourists and hefty supply of local workers, Thailand’s entertainment complexes could generate EBITDA margins as high as 48% according to Maybank Securities – easily among the highest in all of Asia.
The forecast formed part of a bullish note from analyst Boonyakorn Amornsank, who also said Maybank remains positive about the progress of efforts to legalize casino gaming even as in-fighting threatens to derail the coalition government’s plans.
Thailand’s entertainment complexes would, Boonyakorn explained, enjoy a strong competitive advantage due in part to a proposed 17% casino tax rate that compares favorably to regional peers. By comparison, Singapore’s casinos pay 18% on their first SG$3.1 billion in mass GGR each year and 22% thereafter, and Philippine casinos a flat 25% on mass GGR. Macau casinos pay a hefty 35% special gaming tax although mandatory levies and contributions push the effective rate even higher to around 40%.
“There are multiple factors affecting EBITDA margins, but the largest is generally the casino tax rate,” said Boonyakorn. “All else being equal, we would not be surprised if Thai complex EBITDA margins are higher than Asian integrated resorts at around 35-48%.
“Thailand also has a solid base of foreign tourists and plenty of service-minded workers to support the operation of the complexes.”
Maybank maintains a more conservative revenue estimate for Thai entertainment complexes of THB278 billion (US$8.3 billion) – likely fourth highest in Asia by the time they are operational but with considerable upside depending on the rate of migration from the country’s many underground casinos.
“Taking into account [this upside], Thailand has the potential to rank second behind Macau in terms of the highest GGR,” Boonyakorn wrote.
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