The island archipelago of Penghu off the coast of Taiwan voted Sunday to reject casino development in the Pescadores. Through the 2009 Offshore Islands Development Act, the Taiwan government gave offshore areas the right to develop casinos if the people favored them. That legislation followed 20 years of lobbying for a Taiwan casino bill. Along with Penghu, the islands of Kinmen and Matsu were identified as possible casino sites; the latter islands that only are a short ferry ride from Mainland China, reported Forbes magazine.
Penghu first turned down casinos in 2009, albeit by a much smaller margin. In 2012, Matsu voted yes in a casino referendum.
This year, the Penghu voters overwhelmingly defeated the proposal to legalize casinos by an 81 percent to 19 percent margin. The result was not surprising as little has changed since the 2009 referendum. President Tsai Ing-wen, who is also chairwoman of the Democratic Progressive Party, led the charge against casinos, reports the China Post. She says Penghu should focus on tourism, especially eco-tourism, over gambling for jobs and economic growth, according to DPP spokesman Wang Min-sheng.
Even though Matsu has approved casinos, Taiwan’s Legislative Yuan must also OK the plan and pass another bill to legalize casinos. After the Matsu vote, a Tourism Casino Administration Act was drafted but has languished in the legislature since 2013. Union Gaming analyst Grand Govertson says the process is even more compliacted than that.
“In theory, the legislature of Taiwan was supposed to enact implementing legislation following Matsu’s referendum approval in mid-2012,” wrote Govertson. “However, no bill has moved forward over the last four years and given President Tsai’s anti-gaming stance, we do not anticipate any movement for the foreseeable future. Regardless, any gaming development in Taiwan remains long-dated as the legislature would tackle gaming expansion via two bills, one to decriminalize and a second to establish a framework. This would then be followed by an RFP process. Therefore a best-case scenario is that IR operations are five years away from any point the legislature chooses to move forward – and we believe the legislature is unlikely to do this during President Tsai’s four-year term that began this past May.”
“Penghu is a different play than Matsu or Kinmen, as it would depend less on mainland Chinese customers,” Bill Bryson of Global Market Advisors told Forbes. “Foreign casino operators saw potential in Penghu long before mainland Chinese tourists started coming to Taiwan in the numbers that they do now.”
One global company that apparently was not interested in Penghu was Las Vegas Sands Corp. Founder and Chairman Sheldon Adelson, who has said he’s on the lookout for new opportunities in Asia after opening Parisian Macao, has called Penghu “a place with lots of wind.” But another familiar name was floated as a possible investor. Forbes reports that some people hope GOP presidential candidate Donald Trump will “make Penghu great again.”
Govertson says the LV Sands reticense toward Penghu is matched by other Macau developers.
“Given how politically contentious the concept of gaming is as it relates to China and Taiwan in the unlikely event that gaming does come to Taiwan we would expect Macau’s Big 6 to stay away out of political expediency,” he wrote. “As such, we would expect only regional operators to participate. Further, with Beijing threatening to bar mainlanders from gambling in Taiwan, the ROI story at any offshore IR would in all likelihood be very anemic at best unless Beijing were to alter its policy. Absent such a policy change we continue to hold the view that the only successful way gaming could be implemented in Taiwan is if gaming is approved for urban areas like Taipei, Kaohsiung, or Taichung, and therefore are ‘locals’ casinos.”
