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Casino operators eye Taiwan as gaming gets the nod
Publication Date : 11-07-2012
Gaming companies are showing renewed interest in Taiwan after the island's outlying Matsu islands voted to host an integrated resort (IR), industry analysts say.
The administration, on its part, is redoubling efforts to lay the legal and supervisory infrastructure for Taiwan's first casino, which would realise President Ma Ying-jeou's 2008 campaign pledge to develop its offshore islands through gaming.
"People in Vegas and Macau were calling us to ask what's going on (after the Matsu referendum)," said Anita Chen, managing director at Park Strategies, a New York-based consultancy and lobbying firm whose clients include gaming operators.
Residents of Matsu, a tiny clutch of islands 170km from Taiwan proper and less than 20km off the coast of China, voted in favour of an IR last Saturday, becoming the first place in Taiwan to give gaming the green light.
Before then, casino operators had shown scant interest in Taiwan, Chen told journalists at a panel discussion on the Matsu result.
William Bryson, a partner at the Jones Day law firm which also advises casino companies, said industry players used to be blase about prospects here but that is all set to change.
"The significance of the Matsu result cannot be overstated... it's the industry's equivalent of man walking on the moon," said Bryson.
"Whether anyone builds a casino on Matsu, casino development in Taiwan is going to be accelerated."
For one thing, Matsu's embrace of gaming could rub off on other offshore islands - the only areas in Taiwan where gaming is legal.
Penghu, off the western coast of Taiwan, voted against an IR in September 2009. Under existing laws, Penghu has to wait three years before it can hold another referendum on the issue.
Kinmen, another small group of islands off the Taiwan coast, has yet to table a referendum on gaming.
Yet Kinmen is the one most favoured by casino companies because it is the most developed, is five times as big as Matsu, and lies within swimming distance of China, said Chen.
Chinese punters are expected to be the main source of business for Taiwan's gaming market.
Weidner Resorts Taiwan, which proposes to build a 100ha, NT$60 billion (US$2 billion) IR on Matsu, estimates the resort would attract 12,000 tourists a day, up to 80 per cent of whom would be from mainland China.
Its chief executive William Weidner said on Monday that the IR could be completed three years after it gets a licence.
But the government cannot issue any licence until a proposed Gaming Act is passed. The draft law, which borrows heavily from Singapore's IR model, is due to be submitted to the Cabinet at the end of the year, before being sent to Parliament for approval.
Crucially, the Cabinet has decided that the Ministry of Transportation and Communications (MOTC) should supervise the gaming industry. This ended a debate over whether oversight should come under MOTC, which oversees tourism, or the interior ministry, which had bogged down the two-year-old drafting process.
Still, Matsu faces formidable natural obstacles, from its hilly terrain, lack of water and power, to frequent fog.
Taiwan's civil aeronautics administration estimates that it would take NT$20 billion just to double the capacity of the island's primitive airport.