Inside Asian Gaming

April 2008 | INSIDE ASIAN GAMING 7 Market Outlook kingdom is ranked joint 84th inTransparency International’s index of corruption (ranking countries from least to most corrupt), alongside such examples of fiscal rectitude as Swaziland, Lesotho and The Maldives. For the record, Macau is joint 34th with Taiwan and the United Arab Emirates. Singapore is ranked fourth. Controversy Thailand’s latest gambling wrangle is eerily reminiscent of the troubled history of the country’s legal lottery. It began life in 1974 with the aim of helping charity. Today, around 60% of its revenues are distributed as prize money. Where the cash actually ends up is a hotly debated topic within the kingdom. In recent years, the system has become a hostage to politics, with accusations that from 2003 onwards the then prime minister Mr Thaksin and some of his close allies allowed it to become a vehicle for organised corruption and funding of political slush funds. Mr Thaksin strongly denies the accusations and recently returned to the country to contest them and other allegations. It should be stressed there is no suggestion that Loxley Plc and GTECH Corporation, the private companies contracted in 2005 to run the technical aspects of the national lottery, had any involvement in any alleged impropriety. Regardless of the squabbling among the ruling elite, one thing seems clear. Thais love to gamble and, as Mr Samak hinted, will continue to do so whatever the law and the politicians say. Black market A media report quoting an economic research centre estimated the country’s punters spent US$1 billion alone with illegal sports’ betting bookmakers during FIFA’s soccer World Cup in 2006. That was equal to a third of the entire turnover of the legal national lottery for that year. In 2006, official lottery revenues stood at Baht 91.8 billion (US$2.94 billion). The 15-month dictatorship of army generals that followed a palace-backed coup ousting Mr Thaksin in autumn 2006 was widely regarded by foreign observers as economically inept. It led to a period of financial stagnation in the country predating even the current global economic slowdown. Mr Samakmight then have been expected to announce some macroeconomic measures designed to send a signal to foreign investors that Thailand was once again ‘open for business’. Putting a bet on casinos might seem unorthodox, but could be an astute move sending a signal both domestically and externally that it’s time to shake up the economy. It could also help Mr Thaksin, who recently returned from exile in the United Kingdom inorder tofight corruption charges. The country’s tourism industry—which is facing increasing competition from more upmarket Malaysia and from Singapore— might also benefit. Pro-Thaksin On the first point, Mr Samak has already publicly acknowledged that he and his party are a proxy for the still popular Mr Thaksin and his now dissolved Thai Rak Thai party. Although the generals have relinquished power, they have not gone away and continue to pose a political and practical threat to the new government, despite its strong popular mandate. A body called the Assets Examination Committee (AEC), originally set up by the junta, has framed a number of corruption charges against Mr Thaksin and some of his supporters. This includes an accusation that Mr Thaksin and 46 of his political allies used the creation in 2003 of new state lottery products—known as two- and three-number lotteries—as a vehicle for effectively bribing the electorate by siphoning money off to particular social projects. Mr Thaksin’s supporters counter that his new lottery products helped to tempt the public away from Thailand’s massive underground lottery system and put money into the public purse. The Thaksin camp also complains the Assets committee Bangkok, Thailand