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Hope Fades for Taipei Casinos

A legislative panel in Taiwan has all but shot down the possibility of casinos on the main island. At the same time, enabling legislation to bring gaming to the islands in the Taiwan Strait is reported to be headed for passage this year.

Hope Fades for Taipei Casinos

Deep divisions among national lawmakers in Taiwan appear to have doomed prospects for casinos in the populous capital of Taipei or anywhere on the main island.

The Legislative Yuan’s Transportation Committee has struck down 83 of 114 provisions contained in a draft Tourist Casino Management Act that has been under consideration since last spring. The surviving articles include a framework to guide casino licensing but only on islands in the Taiwan Strait where local residents have granted their approval. This has occurred so far only on the Matsu archipelago, which lies about 10 miles off Mainland China’s Fujian province. A similar referendum to bring casinos to the larger island group of Penghu was voted down four years ago.

The committee further endorsed, together with its amendments to the act, a proposal to block government investment in casino operations under the new regulations.

The articles that didn’t make the cut aren’t entirely dead but have been tabled for negotiations by a broader group of legislators before being presented to the full Yuan for review. So there is a chance the negotiations could result in the resurrection of casinos on the main island, but it’s considered unlikely.

This means, among other things, clarity for officials on Matsu and the other island groups. Several global names have expressed interest in the market but only one, Weidner Resorts, headed by former Las Vegas Sands President William Weidner, has advanced specific plans for the island, which is small and rugged and relatively undeveloped. “Weidner has the will, but there are other companies that are waiting for the act to go through parliament,” said Matsu’s tourism head Liu Te Chuan. “We don’t know how many will come forward.”

Passage of the act will provide a framework for licensing probably no more than one or two casinos on Matsu in a best-case scenario that would see the first venue opening in about five years, a time frame that includes land acquisitions and the completion of critical infrastructure improvements in the areas of water and power generation and air and land transportation needed to support a major tourist hotel.

“Given that the act could be successfully passed in the beginning of 2014, we optimistically expect that the earliest time the casino could open to public in Matsu is around 2019,” said Lin Kuo Shian, director-general of the department that oversees gaming for the government’s Transportation Ministry.

There was hope that Taiwan proper might open to the industry in the wake of recent statements out of China that mainland residents would not be permitted to visit any gambling venues there. Casinos are illegal in China save for Macau, where they operated prior to the end of the Portuguese colonial era and have been allowed to continue as the foundation of the economy of the city, which together with the former British colony of Hong Kong enjoys a politically autonomous relationship with the central government. Taiwan is a different matter. Beijing doesn’t recognize its independence or its international status as the Republic of China. It is considered a renegade province, and on those grounds the central government would have little choice but to consider casinos there to be illegal as well.

“Given this dynamic, any casino built in Taiwan would therefore largely be dependent on locals, which means that only a casino built near population centers, such as Taipei, would make sense—and only if locals are allowed to gamble,” investment brokerage Union Gaming Research Macau said at the time.

Terry Gou, head of Foxconn Technology Group and one of Taiwan’s wealthiest citizens, proposed the creation of a casino district situated to draw on the capital city’s population of 9 million. Transportation Minister Yeh Kuang Shih at one point suggested that casinos could be permitted as part of a special economic zone near Taipei’s Taoyuan Airport. But gambling is a controversial subject among Taiwanese and feelings are mixed both at the popular and political level. Premier Jian Yi Huah, however, described the idea as “problematic,” and although enabling legislation was proposed by lawmakers of the governing Kuomintang Party, there was no consensus in the Yuan on its wisdom, and some parties are still calling for the Casino Management Act to be entirely scrapped.

Pro-casino forces, in the meantime, are marshaling their resources for another crack at Penghu, where an Isle of Man-based company called Claremont Partners owns 27 acres on which it wants to develop a gaming resort.

“We continue to conclude that Penghu very much remains a viable location,” a spokesman for Claremont said.