Gambling with Phuket

16 July 1997

Last week, Chavalit announced he wants to turn the south into Las Vegas. Did he mean building casinos? No, said Bokhin Polakula, he meant making the south a business hub, like Singapore. No, said Snoh Thienthong, he was referring to a business district, with lots of lights, like Hong Kong. No said Samak Sundaravej, he just meant a land of prosperity. No, said the prime minister himself, he meant lots of shrimp farms, decked with lights, which seen from the air look as bright as the Vegas strip.

Spin control so frantic suggests only one interpretation: he wants to build casinos in Phuket. According to the Thai press, Chavalit has already given Bokhin the task of smoothing the legal side of this project.

This is not the first time that politicians have launched ambitious plans to legalize casinos. The Ambassador City complex in Jomthien is said to have been planned initially as a gambling resort. The owner was well-connected politically in the 1980s. More recently, two MPs are said to have invested heavily in Chiang Rai in connection with plans for a casino on the Thai or Burmese side of the border.

Casino gambling is illegal, but huge. There are gambling dens, big and small, scattered through every part of Bangkok and the provincial towns. Estimates of the profits made in the business run up to 160 billion baht. Because casinos are illegal, they need the protection of powerful people, both police and politicians.

So far, projects to legalize casinos have failed. Chavalit may have a smarter strategy. He can present the Phuket casino as a project to boost tourism in Amazing Thailand Year, to help the current account deficit at a time of economic crisis, and to boost government revenue when the budget is slipping into the red. It is possible the Tourism Authority will be brought in to champion the project.

For Chavalit, this project could be a winner three ways - fiscally, financially and politically.

* Foreign exchange leaks out of the country when Thais go to gamble in Malaysia, Macao, Perth and elsewhere. The Phuket casino should reverse this flow and pull in tourist dollars.

* Gangsters, police and other influential figures levy "informal taxes" from Thailand’s illegal casinos in return for protection. With a legal casino, some of that revenue will be diverted to the government coffers.

* Legal casinos are very lucrative. The company owning the Genting Highlands gambling resort is one of the biggest in Malaysia in terms of turnover and profit.

* The choice of Phuket as the location is politically smart. The south is the heartland of the Democrats. The casino project will be a big money-spinner which should attract supporters like bears to honey.

But Chavalit is likely to face opposition on three counts.

First, why Phuket? The island has outstanding natural beauty. Despite the worst efforts of the developers over the past two decades, much of that beauty remains. Converting Phuket into a gambling centre (and also a free port) will bring a new wave of development. If Las Vegas is anything to go by, natural beauty is not something which will survive this wave. Why not choose Pattaya, which is already an environmental disaster. Perhaps locate it on Ko Larn. The strip of sea between Pattaya and Ko Larn would make the project easier to control. It would also create some ancillary employment for boatmen and smugglers. Chavalit should send Bokhin to look at the casino on Victoria Point opposite Ranong as a model.

Second, why promote gambling? In Australia, governments have promoted gambling as a tax earner very successfully in recent years. Now there is now a growing public reaction. Parents complain that young people are attracted into the casinos. Families complain when they are reduced to poverty by gambling losses. The Chavalit government has made a point of combating ya ba, and forcing early closing of entertainment outlets. Is it consistent to encourage a different form of wasteful and risky indulgence? At a time when the government is muttering about belt-tightening, should it be seen supporting gambling?

Third, how will Chavalit manage the opposition to the project. The study by Chulalongkorn University showed that opinion is very divided over the question of legalizing gambling. Around half support legalization, on grounds that casino gambling is already widespread, and that government may as well make tax and foreign-exchange gains from it. The other half bitterly oppose. They argue that gambling is against Buddhist principles. Legalization would make it more accessible and more legitimate. Young people would have more chance to get hooked on gambling, just like they are now getting hooked on ya ba. More families would be broken and bankrupt by gambling losses.

Many support legalization in the belief that it would it bring gambling under better control, divert the profits going to gangsters and people of influence, and reduce crime. But that will only happen if legalized gambling replaces the illegal version, and is well managed. Many doubt that will be the case, because they don’t trust the current politicians and policemen. They fear that a legal casino will just be another money-maker for a few politicians and their friends. And the illegal gambling dens will continue as ever, but with a little more legitimacy. Then there would be no net social benefit. Only private gain.

Maybe Chang Noi is wrong about all this. Maybe there is no plan for a Phuket casino. Maybe Chavalit is just flying a kite to test the atmosphere. Maybe he really does want to promote, in deepest Satul, the Caesar’s Palace Shrimp Farm and Aquaculture Centre, blazing with neon and fairy lights. Maybe.