It's not technically called that, but is part of the law covering the provision of 'special services' in places like massage parlours. Most soapies have been around for years, licensed and operating within the law. I'm guessing this one is new and hadn't secured the right licences and didn't have friends in high places!
The second law regulating prostitution in Thailand is the Act on Entertainment Places, B.E. 2509 (1966) (the “Entertainment Act”). Massage parlors (excluding parlors providing legitimate massage services), go-go bars, karaoke bars and similar establishments are regulated and required to be licensed by the Entertainment Act. The Act regulates these businesses due to their influence on public morals and in order to ensure that minors are not allowed access to such businesses. While the Entertainment Act does not expressly permit prostitution, it does allow “service partners” and “bath service providers” and the like. The Entertainment Act distinguishes between those types of employees, who are required to wear red circular disks with their numbers, and non-sexual service staff, who are required to wear blue circular disks with their numbers. Employees of establishments regulated by the Entertainment Act are required to be at least 18 years old, and customers are required to be at least 20 years old. Given the close relationship of many of these businesses to the sex industry, the differences between massage parlors and go-go bars and prostitution establishments are not necessarily clear.
http://thailawforum.com/sex-crimes-in-thailand-part2-2.html