In the past two weeks, the prime minister, house speaker, police chief, over 100 MPs, and “influential” people from the north (Se Moi) and East (Kamnan Bo) have come out in support of legalising some forms of gambling. This is a powerful array of force. The issue is launched into public debate. The topic is a minefield. Here are five points to guide the way.

1. Don’t rush to legalise casinos. Snoh Tienthong and others have been pushing for legal casinos for years. They point to the casinos now ringing Thailand’s borders like a siege army. They lament the loss of foreign exchange. But this argument is exaggerated. Many of the investors in these cross-border casinos are Thai. Even the non-Thai among them keep the revenues in Thai banks rather than in places where their own governments could find them. In addition, many tourists (Malaysian, Singaporean, Taiwanese etc.) gamble in the illegal casinos in Bangkok and Hat Yai. The exchange loss is overdone. Most of this pro-casino lobby is salivating at the thought of the profits.

2. Start by reforming the gambling which is already legal. Betting on the government lottery and some horse racing is currently legal. But the sale of government lottery tickets is far less than the turnover of the underground lottery. Racing is no longer profitable for the Royal Bangkok Sports Club because of illegal bookmakers. Newsweek recently described the chicanery at the Turf and Sports Clubs. Before government starts legalising new forms of gambling, it needs to show it can manage the existing ones.

The priority should be reform of the lottery because it is so large. The Lottery Bureau plans to introduce vending machines to offer the same options (two and three digit betting) which are so popular in the underground lottery. This is a silly idea. The underground lottery has a vast sales network based on pyramid-selling. Playing the underground lottery is a well-established subculture based on human relationships. The vending machines will not be able to compete. The finance secretary, who supports this machine scheme, earlier tried to get rid of corruption in the customs department by buying computers. That didn’t work either. Though of course buying all this hardware creates a nice procurement budget.

Rather the government should look for ways to convert the existing sales network of the underground lottery into a legitimate business.

3. Link any reform of gambling with a broader reform of the police. Both the prime minister and the police chief have admitted that gambling results in large-scale corruption of the police. This is not unique to Thailand. Many countries have legalized popular forms of gambling as an integral part of police reform. But legalizing gambling alone will not change the police much and will be a missed opportunity. Thaksin has said that reform of the police is a very difficult task. But it is also very necessary. The prime minister and interior minister are both ex-policemen. They know what needs to be done. They have the inside contacts necessary to be effective. No other Cabinet has been better equipped to embark on police reform.

Currently, the corruption revenue from gambling acts as a subsidy for police wages. It allows the government to go on under-paying the police. Effective reform of the lottery would create additional tax revenue so government could stop incentivising the police to be corrupt.

Only when government has shown it can reform and manage the existing forms of legal gambling (especially the lottery), and only when it has committed to police reform, should it consider legalising further forms of gambling. Then the priority should be football gambling because it has become so widespread in recent years, and is likely to go on expanding.

4. Legalizing casinos should be an all-or-nothing affair. A few years ago Chavalit Yongchaiyudh and Snoh Thientong pushed for a casino on Phuket. Now Kamnan Bo and others are excited about having casinos in Pattaya. But creating one legal casino, or a handful, would not fulfil the aim of bringing the casino business above ground so it can be properly regulated. Illegal casinos would continue to operate. They would get some added legitimacy from the partial legalisation. They would probably also get extra business because of higher awareness of gambling. In other words, partial legalisation would probably increase gangster profits and corruption flows.

If casinos are to be legalised, then the aim should be to redirect all the existing demand for casino gambling into legal casinos. That means licensing enough casinos to meet existing demand. But this has its own risks. It will undoubtedly increase the number of gamblers and the total expenditure on gambling. That will mean an increase in the crime and social problems always associated with casino cultures – loan-sharking, money-laundering, family bankruptcy and so on.

5. Don’t rely on gambling legalisation as a substitute for tax reform. There is no doubt the government’s current interest in gambling legalisation is linked to the need for additional tax revenue. But this is very dangerous. Governments easily get hooked on gambling, and then promote expansion of gambling in order to increase revenue. Government should be clear that the objectives of gambling reform are reducing corruption and gangsterism, not generating lots of new government revenue.

The previous Democrat government promised to undertake tax reforms to meet the extra costs of the crisis bail-out. But in practice it did nothing. The current government has also talked vaguely about tax reform, but has no commitment. The difficulty is that the parliament, the Assembly of the Rich, will always be reluctant to approve measures which tax the wealthy. Gambling is a tax on the poor. It exploits the optimism of the desperate. If this government legalises gambling rather than reforming taxation, this will amount to the rich taxing from the poor in order to keep themselves in power.