Thailand proposes approval of casinos and entertainment complexes

The Cabinet has issued a draft bill in relation to the regulation of entertainment complex businesses, including casinos and other entertainment venues. The draft, entitled the “Entertainment Complex Business Bill”, is under review by the Ministry of Finance.

Current law: At present gambling is regulated by the Gambling Act (1935).

Under this Act, gambling activities are divided into two lists

• List A includes e.g. poker, roulette-like games, baccarat and slot machines. Gambling activities in List A are prohibited, unless conducted in a casino established under the Gambling Act,
• List B includes card games, lottery, bingo and billiards. Gambling activities in List B are permitted if the licensing officer deems them appropriate and issues licenses for them, or if authorized by a ministerial regulation to not require licenses.

Key provisions: The key provisions of the bill are outlined below.

• Entertainment Complex Business: The draft defines an entertainment complex business as a combination of the entertainment businesses listed below, with casinos.

1. Department stores;
2. Hotels;
3. Restaurants, nightclubs, discos, pubs, or bars;
4. Sports stadiums;
5. Yachts and cruising clubs;
6. Gaming venues;
7. Swimming pools and water parks;
8. Amusement parks;
9. Areas for promoting Thai culture and OTOP (One Tambon One Product) goods; and
10. Other businesses as specified by the regulatory committee.

• Further requirements: An entertainment complex must be established in a specified area and must consist of at least four types of the aforementioned entertainment businesses, including a casino.
• An Entertainment Complex should be situated in an area in close proximity to major transportation hubs, such as major airports, ports and public transportation, tourist attractions, and in a tourist-friendly province.
• An Entertainment Complex should be situated away from residential areas and religious sites.

Who may operate an Entertainment Complex? Only private or public companies registered in Thailand, with a paid-up capital of at least 10 billion Baht, may operate entertainment complexes.

Regarding directors, there are no restrictions on the nationality of the directors

Public companies that are granted an operating license will be exempt from:

• the Foreign Business Act (1999) (this regulates foreign ownership of business activities in general), and
• a section of the Public Companies Act (1992), which requires the board of directors of a public company to consist of five members, with at least half residing in Thailand.
• They will also be exempt from the Civil and Commercial Code provision requiring that at least 25% of the nominal share value to be paid up upon issue of shares.

Applying for a licence and fees: Companies that wish to operate an entertainment complex must apply for a license from the newly established regulator called the Office of Entertainment Complex Commission, with authority to charge fees as prescribed by national or local law. Licenses will be valid for 30 years from the date of issue, with a right to renewal for periods not exceeding 10 years at a time.

License holders are required to pay an initial licensing fee and annual fees as determined by the Policy Committee, subject to maximum rates outlined in the annex to the bill.

Procedure and compliance: Licensees must commence operations within a specified timeframe, in accordance with the approved business model and plan.

They must implement effective casino control systems and appropriate measures to prevent and address any issues, at a minimum as submitted at the time of application.

If the licensee does not conform to such business model and plan, the regulator may order the licensee to correct such failure within a specified timeframe. Failure to make the necessary corrections within the specified timeframe may result in license revocation.

Will gambling debts be enforceable? It has been long established law that agreements to gamble are not enforceable. But the draft bill specifies that debts incurred from gambling or playing games within an entertainment complex are considered legally enforceable.

Regulatory control: The draft outlines the regulatory controls for the operation of an entertainment complex.

• Casinos: Casinos may operate within an entertainment complex as licensed operators, limited to the types specified in the draft. The draft prohibits online or electronic connections for gambling activities that would allow external individuals to participate in gambling remotely via the internet.
• Designated casino areas: The draft requires a clearly defined area for casino operations within an entertainment venue.
• Age and nationality restrictions: Individuals aged under 20, those who are banned from entering, and Thai nationals who have not registered and paid the casino entry fee, are prohibited from entering a casino.
• Employment nationality quotas: Casinos must maintain a ratio of Thai to foreign employees as determined by the regulator.
• Marketing restrictions: The draft prohibits licensees from inviting, advertising, promoting, or conducting sales promotion activities related to a casino. It also forbids any third parties from carrying out such activities on behalf of a licensee
• Penalties for non-compliance: Failure by a licensee to comply with regulations may result in fines and the potential revocation of their operating license.

Property law aspects: Certain provisions of:

• the Civil and Commercial Code,
• the Act on Leasing of Immovable Property for Commerce and Industry, (1999), and
• Ministerial Regulation on the Use of State Property (2021)

will not apply to a lease, sublease, or rental of land or property for the operation of an entertainment complex. Lease agreements may not exceed 50 years, with renewals permitted not extending beyond 49 years from the end of the initial 50-year term.

Regulatory authority: The draft establishes a Policy Committee and an Executive Committee to oversee and manage entertainment complexes, and an office to support and monitor the industry.

The draft also includes provisions for the control and prevention of negative social impact, such as restricting access to casinos for certain individuals, imposing registration requirements and fees for casino entry, and regulating advertising and promotional activities.

The draft Bill is currently has undergone a public hearing which ended on 18 August 2024.

Following this period, the draft will be submitted to the Cabinet for approval. After that it will be reviewed by the Council of State before being presented to the House of Representatives for approval as an Act.