FOCUS: Taiwan casino hopes rekindled amid Asian gaming recovery.
Despite the failure of a key referendum on casinos last month, Taiwan's prospects for a casino gaming industry remain strong amid a comeback in the Asian gaming market, experts say.
''The growth of Asian casino gaming has just been explosive,'' said Daniel Munk, director of Munk Management Services, an Australia-based gaming services firm.
Given that growth, Munk said, Taiwan's own prospects are still bright.
Taiwan's offshore islands Penghu voted down a measure Sept. 26 that would have paved the way for ''integrated resorts'' -- hotels and shopping arcades with in-house casinos.
For now, the failure of Penghu's ''casino referendum'' has derailed plans to develop integrated resorts on the islands -- the only outlying Taiwan-administered islets that Cabinet had authorized to hold a plebiscite on the matter.
Amended Jan. 12 to decriminalize gambling on Taiwan's offshore islands, the Offshore Islands Construction Act stipulates that such islands must first pass local-level referendums on whether to develop integrated resorts before construction can proceed.
Despite the setback on Penghu, Taipei still plans to issue tender notices inviting multinationals to submit bids for the planning and management of future casinos, and to draw up a regulatory framework that would determine the tax regime governing casinos and the guidelines by which a national gaming board would supervise gaming operators.
Meanwhile, gaming investors' interest has shifted to Taiwan's Kinmen islands, within eyeshot of China's southern coast.
Since August, a grass-roots petition in Kinmen to hold a similar referendum has been gathering steam, while Kinmen County Government officials seem to be warming to the idea of hosting integrated resorts.
''The county government is working very hard to hold a referendum,'' said Liu Chih Chuan, director of Kinmen's Industrial Development and Investment Promotion Committee, at a recent Taipei conference for international gaming investors.
''Good news in Taiwan...the government here is starting to get it,'' said Michael Chen, president of Asia for U.S.-headquartered Harrah's Entertainment, Inc., the world's biggest gaming entertainment company.
Chen cited the ''low tax rates, open access, and limited licenses'' that Taiwan's Ministry of Transportation and Communications -- the main agency overseeing gaming issues -- is trending toward in shaping the island's possible casino industry.
The MOTC, Chen said, is partial to tax rates of 10 percent or lower for any future casino operator in Taiwan, while open access would make casinos accessible to foreigners and locals alike and limiting gaming licenses would prevent competition from becoming too fierce and eroding profit margins.
Taiwan's insistence on moving ahead with casino-related tenders after Penghu's referendum failed, and increasing speculation over Kinmen's gaming prospects, fits with fresh bullishness in the gaming market across Asia.
A revival in Macau, for example, sent Wynn Macau, Ltd.'s stock soaring by 13 percent last week after it debuted on the Hong Kong stock exchange.
In August, Macau -- whose gaming revenues have outstripped those of Las Vegas since 2006 -- had its best month ever, generating $1.4 billion in revenue amid an easing of Chinese visa restrictions and the beginnings of a recovery from the global financial crisis.
''This time a year ago, it was for us, and for MGM, a very scary time -- we couldn't see what revenues would be two months later, but now most have gotten our balance sheets in order,'' Harrah's Chen said. ''Macau is now coming back.''
Singapore is also contributing to the bullishness, as two multi-billion-dollar integrated resorts -- a $5 billion resort operated by the Las Vegas Sands at Marina Bay and a $4.7 billion resort headed by Genting International at Sentosa Island -- are expected to open next year.
By 2012, Singapore's gaming revenues are expected to reach $2.5 billion, according to a recent report by Merrill Lynch and Macomber International, Inc.
Eager to cash in on Asia's rising gaming industry, Taiwan is likely to issues its casino tenders in a matter of months, with Kinmen eyeing ''early next year'' for a referendum, said Liu Day-yang, a gaming expert at the Graduate Institute of Finance at the National Taiwan University of Science and Technology in Taipei.
Still, uncertainty abounds as Taiwan enters an election season, with local politicians focusing on campaigning rather than on controversial, long-term policies.
''The possible referendum (for Kinmen),'' Liu said, ''has a chance, but the timing is still hazy.''
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|Publication:||Asian Economic News|
|Date:||Oct 19, 2009|
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