The large circular 900-seat venue, near the Phuket Zoo, is also too warm for patrons, inspectors from Bangkok are believed to have found.
The Ph level in the water, which defines the acid level, is too low, Problems would be created with dolphin urine, a report is understood to say.
A second pool would also be necessary as well as the main pool in case a dolphin fell sick, the inspectors say.
Phuketwan understands that the proposal to open the dolphinarium involves bringing six bottlenose dolphins onto the island.
There is no timetable for response but the dolphinarium's owners are likely to have to reassure inspectors at a point when all the suggested improvements have been carried out before a final decision can be made.
Officers from the Department of Fisheries checked the venue early last month.
Environmentalists against keeping dolphins in captivity have staged a campaign that resulted in Thai authorities looking more closely at the dolphinarium in southern Phuket.
If the venues eventually does open, an expat trainer would be employed, Phuketwan understands.