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they haven’t passed the regulatory framework under At this stage
The future for Penghu?
which gaming is going to move forward, so we along we don’t have
with every operator, have to wait and see what those an indication of
guidelines are going to be so we can start to plan. how many
There are indications embodied within the current licences are
act and there are some indications from the Council going to be
for Economic Planning and Development (CEPD) awarded or
report; I should differentiate between the two; the act recommended
that was passed recently essentially only applies to but indications
the offshore islands. Of those, Penghu is certainly the are that it will
most developed and is the most likely to go ahead be between one
with gaming. The whole regulatory process will be and three.
controlled by a Central Government Agency, it won’t
be controlled by the local authorities at all and it will CI: Who will be your customer for the
probably fall under the Department of Economics, development? Is there likely to be any dependence
Home Affairs or Transportation. on China for custom?
The islands, if they want to go for gaming, have to Michael Treanor: We’re not dependent on China
hold a local referendum, but all the indications are and Chinese tourism in order to make the casino in
that the local population on Penghu would accept Taiwan successful – Taiwan has 23 million people
gaming. Now this referendum is an extraordinary who are prolific gamers in their own right and are a
referendum and requires the majority of votes – it significant contributor to Macau. Of course, it would
doesn’t require a majority turnout at all, just a be nice if we could draw on the China market
majority of votes in favour of gaming. although realistically I’m not sure how likely that is.
All casinos would have to form part of an But we have a low tax rate regime proposed which
International Tourist Resort, (or 4 to 5 star hotel as means junket operations should be very profitable
we call it internationally) , and what they’ll be doing bringing people from South East Asia, and Taiwan’s
is de-emphasising the casino and seeking integrated right in the middle of South East Asia – and on top of
resorts where i other facilities such as conference, that you have the 23 million locals.
entertainment, retail etc are the primary features..
The supporting legislation, is going to be CI: Are you looking at taking on partners in
mandated by a gaming regulatory body which will be terms of development and investment to complete
formed over the coming months and will fall under the project?
one of the Departments mentioned previously. CB: In terms of internal expertise we certainly have
Also embodied within this framework is a the management team, we’re quite capable of running
contribution from revenues to an economic international resorts, certainly in terms of operations,
development fund around 30 billion NT dollars, but we have to be realistic. Taiwan is going to be
which is about one billion US dollars. . looking for first-tier type companies, they’re going to
We think the gaming board will be convened by be looking for the brand name operators of this world
March, we see the supporting regulations being to come in and make an investment, so it’s not a huge
drafted probably using the CEPD recommendations, stretch to say that we’re going to have to partner up
and they should be ready by the second or third with one of these companies, put in our expertise and
quarter of this year. Sometime between April and July, our land and come up with a very effective team to go
Penghu will hold a referendum, hopefully that’s going for one of the licences.
to pass and that will be another step out of the way, Since Chinese New Year and the worsening
and then there’s the licensing requirements and the economic situation in Asia, the Government has
bidding process, similar to what probably happened indicated that it would like to fast track the gaming
in Singapore, perhaps by the end of this year. development issues. Penghu has already embarked
Now moving on to the CEPD report, they were upon roadshows to inform the local population of the
tasked a year ago to come up with a report making issues surrounding the forthcoming island
recommendations for gaming in Taiwan and it was to referendum. Discussions on the appointment of the
run concurrently with the passage of the bill. This governing Department in Central government are
report was released at the end of December last year, now underway, and Penghu officials are actively
it was released to the Government but it wasn’t encouraging interested parties to visit and look at the
published for public consumption, the head of the potential on offer – they are after all in competition
CEPD publically released some key details from that; with potential new jurisdictions who may emerge
the taxation rate would be 10 per cent, with a further eventually such as Vietnam and Japan and want to
5% operational tax N We don’t know whether that’s a secure interest and market share now.
set minimum level but it seems to indicate that it may It has been a long road for us, and there are the
seek to compete certainly around the Singapore usual regulatory issues to be worked out but we
levels The report also recommends that gaming believe that we have placed our project in the best
should be held offshore, and that first-tier style position to take advantage of any gaming uplift that
operators are used to operate the casinos. will result on the island.
MARCH 2009 25
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