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 plebiscite (plĕb`ĭsīt) [Lat.,=popular decree], vote of the people on a question submitted to them, as in a referendum. The term, however, has acquired the more specific meaning of a popular vote concerning changes of sovereignty, as on the matter.
Amended Jan. 12 to decriminalize de·crim·i·nal·ize
tr.v. de·crim·i·nal·ized, de·crim·i·nal·iz·ing, de·crim·i·nal·iz·es
To reduce or abolish criminal penalties for: decriminalize the use of marijuana. 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 Liu Chih (pinyin: Liu Zhi; 1892-1972) was a Kuomintang military and political leader in the Republic of China
After service in numerous regional armies, Liu joined the faculty of the Whampoa Military Academy in 1924 and became a field commander during the Northern 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 Harrah's Entertainment, Inc. (NYSE: HET) is a gaming corporation that owns and operates casinos, hotels, and six golf courses under several brands. The company, based in Las Vegas, Nevada, is the largest gaming company in the world, with yearly revenues around $7.11 billion. , 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.
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MOTC Monthly and One Time Charge , 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 The Hong Kong Stock Exchange (Traditional Chinese: 香港交易所, also 港交所; abbreviated as HKEX; HKSE: 0388 ) is the stock exchange of Hong Kong. .
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 MGM
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U.S. corporation and film studio. It was formed when the film distributor Marcus Loew, who bought Metro Pictures in 1920, merged it with the Goldwyn production company in 1924 and with Louis B. Mayer Pictures in 1925. , 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 Las Vegas Sands Corp. (NYSE: LVS) is a casino resort company based in Las Vegas, Nevada and majority owned by one of the world's richest men, Sheldon Adelson.
Las Vegas Sands chairman Sheldon Adelson, the world's sixth richest man, has said that his company will soon be 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.''