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LONGMARCH

TOGAMING

TAIWAN’S STRUGGLE TO INTRODUCE CASINO RESORTS

by Rich Geller

The initial project would involve the development of a 120-hectare resort

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n January 2009, the Taiwan legislature passed a bill that contained a measure to allow casino development on the nation’s offshore islands, should a major- ity of the local population agree. The measure was included as an amendment to the Remote Island

Development Act, which sought to encourage investment on several of Taiwan’s smaller, economically challenged islands. The law came with stipulations. Any casino would have to be a part of an

international tourist resort, and non-gaming amenities would need to be includ- ed in any project. The list of eligible amenities included an international tourist hotel, conference center and exhibition facility, retail shopping mall and other offerings capable of attracting visitors. One month earlier, Taiwan’s Committee for Economic Planning and

Development had presented a list of recommendations which could influence the eventual casino legislation. Suggestions from CEPD included a proposal to require a minimum investment of $1 billion, to plan for a minimum land area of 10 hectares and to require the project be an integrated resort in the style of the two Singapore projects then under construction, Marina Bay Sands and Resorts World Sentosa. CEPD also suggested a gaming license be valid for 20-30 years, with a gam-

ing tax of 10 percent and a special allowable operation tax of 5 percent. The outlying islands referred to in the law include the archipelagos of

Penghu, Kinmen and Matsu. The suitability of these three island groups for casi- no resort development varies due to such factors as distance to Taiwan, distance to China, local economic conditions and military role. The three main islands of Penghu were seen as the most likely candidates for

casino resorts. The resort and commercial fishing center is only a 30-50-minute flight from Taiwan’s main population centers, and the seasonal character of the local economy suggested Penghu as a candidate for additional economic develop- ment. Expressing its support for gaming, shortly before the bill was passed, Penghu

county government announced it was seeking private investment of NTD30 bil- lion—over $900 million—to aid in the development of casino resorts.

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featuring a hotel with more than 2,000 rooms, casinos, golf courses, a conven- tion center and a duty-free shopping mall. Two locations named by the Penghu officials as likely sites of the project were Houliao Bay on Baisha Island and the Huhsi Port area on the main island of Makung. Design was to begin in 2009, the private investment component finalized by February 2010, and develop- ment to start in 2011. A separate effort to construct a casino resort on Penghu had been started a

decade earlier by commercial developer AMZ Holdings Plc. The London Stock Exchange-listed company had begun the process of acquiring land on the main island of Penghu as far back as 1999. The resulting 10.8-hectare AMZ proper- ty had been rezoned from agricultural to commercial use, and the company’s original plans included a 600-room luxury hotel and a casino of minimum 130,000 square feet. The Kinmen islands were seen as being the most desirable site for a casino

resort from the standpoint of physical location. However, at the same time, they presented a more complicated picture. Situated just a few miles from mainland China, the province is also one of the wealthiest of Taiwan, and the Remote Island Development Act would arguably be more intended to improve conditions in a place like Penghu, where seasonal employment is the norm. But the real irony of Kinmen is that, while it is closest to mainland China

and thus would profit more from the potential of attracting Chinese players, the very fact that it would profit from such visits suggests to some a political liability. The thought being: If China is allowing its citizens in effect to give their money to Taiwan, what might China want from Taiwan in return? Since 2001 the main island of Kinmen has been receiving tourists from

China by ferry, primarily those curious about this once-heavily fortified out- post. As this activity increased, there developed the idea of building a bridge between Kinmen and the Chinese port city of Xiamen, which would put Kinmen only a 30-minute drive from China. An article from the Central News Agency cited a 2007 poll of Kinmen’s

50,000 residents in which 84 percent of respondents listed the construction of a bridge as an important issue, to create closer ties with China. There were almost 1 million journeys between Kinmen and Xiamen in 2008. But although the bridge proposal may be popular locally, according to the

article, there is little enthusiasm for it within the Taiwan national government. A feasibility study on a bridge is under way, but there is no pressure to com- plete it. Political opposition cites the bridge project as another move closer to China.

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