Grey Casinos: A silent threat to Thailand’s gambling dream
Casinos are making headlines in Thailand, where debates over legalising gambling have intensified over the past six months. Plans to legalise casinos have stirred nationwide debate, as the government pushes forward a proposal it claims could boost tourism and economic growth. The wide-reaching plan includes the establishment of integrated entertainment complexes, legal land-based casinos, and the introduction of regulated online gambling.
At first, the move was seen as a bold and modern step to revitalise the tourism sector. Supporters argued that legal gambling would attract foreign investment, create jobs, and raise public revenue through taxation. Yet the proposal quickly ran into political and social headwinds.
Opposition has come not only from religious and civic groups, but also from within the ruling coalition itself. Prime Minister Paetongtarn Shinawatra also had to suffer a no-confidence motion in parliament, though she survived the test.
Bank of Thailand’s major warning
Critics warn that legal gambling could trigger addiction, fuel crime, and damage social cohesion. As a result, the once-ambitious proposal now appears stuck in limbo. One prominent critic recently cautioned that casinos could damage Thailand’s international reputation and pull it back to the place where it was almost a decade ago.
Speaking at a press conference, Governor of the Bank of Thailand (BOT), Sethaput Suthiwartnarueput, warned that legalising gambling risked painting the country as a “grey zone”, one lacking in transparency and ethical clarity, particularly at a time when global investors are becoming more selective.
Instead, Sethaput urged Thailand to concentrate on lower-risk, high-value sectors like wellness tourism and elderly care. He argued that these industries align more closely with the country’s long-term development goals and provide more stable returns. His concerns, however, are not entirely unfounded. He is addressing a deeper issue—Thailand’s long-standing struggle with its grey economy.
Grey economy: A worry for Bangkok
But, firstly, what is a grey economy? The term “grey economy”, also known as the shadow or informal economy, refers to economic activities that operate outside of government regulation.
The World Bank defines it as market-based production that is kept off official records to bypass social security contributions and legal oversight. Thailand’s experience with the grey economy is neither new nor minor—it has long been a significant feature of the country’s economic landscape.
A World Bank report published in 2010 estimated that informal activities accounted for approximately 57 percent of Thailand’s GDP in 2007. Subsequent research by Schneider and Enste (2013) put the figure at 40.9 percent, placing Thailand among the world’s top ten largest shadow economies at the time. In recent years, this share has reportedly declined, but informality remains a major challenge.
At one point, Bloomberg Business ranked Thailand as having the world’s seventh-largest shadow economy, based on the proportion of illicit revenue in its GDP. But why is Thailand once again at grave risk as the debate over casino legalisation intensifies?
From the Expert’s Lens
To gain a comprehensive understanding of this matter, we engaged in a discussion with Riaan van Rooyen, a seasoned expert on the issue. He explained the issue in the simplest way possible.
SiGMA World: From an iGaming perspective, why is it so difficult to trace the origin and ongoing responsibility behind grey-market casino operations? What factors make enforcement and jurisdictional clarity so challenging in these unregulated or semi-regulated environments?
Riaan van Rooyen, CEO of Aria International: “The difficulty lies in a perfect storm of regulatory ambiguity, technological decentralisation, and cross-border digital anonymity. Grey-market operators don’t always hide — they exploit legal grey zones, operating in the gaps between jurisdictions where enforcement is weak or non-existent. Thailand’s lack of a structured legal gambling framework has allowed underground networks to embed themselves culturally, and in some cases, operate with tacit community tolerance.”
He further added, “From iGaming’s perspective, server location, crypto payments, and offshore directors may complicate accountability. Add to that the influence of religious conservatism, royal sensitivities, and gambling’s stigma, and you have a setting where unregulated platforms thrive in silence. Without a central authority, opacity becomes the norm.”
SiGMA World: How do you view Thailand’s current casino legalisation efforts, particularly from a regulatory design and market potential standpoint? Do you believe the government is on the right track in terms of structure & compliance?
Riaan van Rooyen: “I must say I am cautiously optimistic. The government’s proposal to limit gambling to just 10 percent of total resort floor space is both prudent and strategic. It respects public moral concerns while enabling economic gains through a controlled, hospitality-led model. Still, Thailand must learn from markets like Singapore and South Korea, where tourism-driven resorts operate under strict compliance frameworks. Success will depend on three factors: transparent governance with no tolerance for corruption, robust digital compliance tools for iGaming, and a hospitality-first narrative — where gambling is a service, not the centrepiece.”
He further added, “If done right, Thailand could set a regional standard for balancing culture with modernisation.”
SiGMA World: Given past regulatory lapses, do you foresee a risk of Thailand slipping into a grey-market gambling environment again, similar to what was seen in the mid-2000s?
Riaan van Rooyen: “Yes, the risk is there — but it’s manageable. History shows that when public demand meets insufficient legal supply, the underground economy thrives. Thailand must avoid the mid-2000s mistake by focusing on four safeguards: a potent, independent regulator; clear tax and revenue-sharing models; public education that destigmatises legal gaming; and digital oversight using AI for fraud detection and transparency.”
He further added, “Crucially, casinos must be tied to family-friendly, globally compliant resorts. This shifts the narrative from vice to value—promoting tourism, jobs, and infrastructure without compromising cultural dignity.”
Implications for legislation
In this context, Thailand’s approach to gambling regulation becomes even more critical as illegal gambling increasingly embeds itself in Thai society. A 2021 study by GPEC revealed that 59.6 percent of Thais aged 15 and above engaged in gambling, up from 53.3 percent in 2019. Online gambling surged, with users increasing from 800,000 in 2019 to 2 million by 2021, and the market value soaring from THB20 billion (€510 million) to THB100 billion (€2.55 billion).
Youth participation also raised alarms: over 4 million young Thais were involved in online gambling by 2024, prompting concerns about addiction and mental health. A 2023 survey found 99.3 percent of Thais knew someone who gambled, with 21 percent of children and 26 percent of teens tempted.
The iGaming sector, if not clearly defined and tightly regulated, risks falling into the same grey zone that has plagued other sectors. Weak oversight can lead to tax evasion, consumer risks, and increased illegal activity. Legalising casinos may promise revenue, but without strong governance, it could deepen the very informality the country is trying to leave behind.
