There now seems little doubt this government will legalise casino gambling. It's not a question of whether it will do it, just when and how.

That means the government has to be clear why it wants to legalise casino gambling. Because the why dictates the how. There are three possible reasons why government might want to legalise casino gambling: to clean up police corruption; to maximise government revenue; or to make a political pay-off. These three different reasons dictate three different ways of going about it.

Option A: Cleaning up police corruption. It is well known that many Thai gamblers visit the casinos ranged around the borders, and the illegal casinos inside the country. It is also well known that the illegal casinos are a cause of police corruption. Just a few months ago, a police raid on a Bangkok casino was blocked by another police officer who waved his gun at them, and shouted, "Haven't we paid you enough yet."

To clean up this kind of corruption, all currently illegal casino gambling must be converted into legal gambling. That means enough casinos need to be licensed to soak up all the existing demand. If not, the illegal dens will continue to operate, and will continue to pay off the police.

But creating lots of legal casinos runs the risk of making it easier to gamble. Hence more people will gamble, and larger amounts will be spent. Certain measures need to be taken to minimise these results. Casinos should not be too public, too flashy, too glamorous. They should not be allowed to advertise in any way. Government should run education campaigns to discourage people from gambling. It should also impose very strict penalties on illegal gambling dens, and on police taking kickbacks from them. This was the strategy adopted in the UK, and it was very effective in combating police corruption.

Option B: Maximising government revenue. The government needs more revenue to finance its new schemes. It talks every now and then about taxing the rich, but we can be confident it will really tax the poor. Gambling taxes are the best way to do this.

In that case, the best option is to allow a free market. Give out as many licenses as the market will bear. Let the casinos compete to attract customers by advertising and glamour. Encourage them to generate profits which the government can tax. This is the Las Vegas model, with big flashy casinos.

Here the risk is that big profits attract big gangsters. Las Vegas went through that experience. The gangsters spent their time cheating the government, and shooting at one another. Other people got hurt. As a result of this experience, Las Vegas now has very stringent laws for issuing casino licences and controlling their operations. Anyone who wants to own or manage a casino has to go through a long and detailed scrutiny. Any trace of criminal activity or criminal associations, and they are debarred. It's fair to say that most of the people salivating to own a legal casino in Thailand now would not stand a chance of passing the Las Vegas scrutiny. Also, there has to be very close monitoring of the casino operations. One slip - like an under-age person admitted to the casino, a slight mistake on the tax returns, an unfortunate meeting between the owner and a known gangster - and the licence is withdrawn.

Even with these controls, the Las Vegas model has a problem. It attracts more people to gamble, and to gamble more. It creates social havoc because people go bankrupt, parents neglect their children, loan sharks thrive, competing businesses (especially small restaurants and entertainment places) go broke. Because of these problems, the model only works in isolated places, like Las Vegas or Macao. The gamblers have to make some effort to get there. The local population are mostly involved in the gambling industry. The gamblers come on holiday and take their problems away with them.

Other places which have tried this model have later regretted it. This has been the experience of several American and Australian cities. But because the government gets addicted to the gambling revenues, it is very reluctant to give them up. The society suffers for the government's addiction.

Option C: political pay-off. If the real reason for legalising casino gambling is to present a big profit-making opportunity to friends of those in power, then of course the aim will be to maximise the value of this political gift. In this case, the best strategy will be to grant only one or a handful of licences so there is not much competition. Don't be too fussy about scrutinising the background of the owners. Let them build flashy casinos, and advertise to attract more business. Don't worry that the illegal gambling dens continue to operate alongside, and continue to pay their kickbacks. Let someone else take care of the social problems.

Thaksin has said that he wants to have big, flashy, Vegas-style casinos and entertainment complexes. That means he has ruled out Option A. If he allows open competition for licences, imposes a strict scrutiny process, and forces the casinos to locate on islands far out in the sea, then we know he is following Option B. Otherwise, it's just a question of who gets the plum, and when the shooting starts.