While the possible opening up of the gaming industry could be a boon for Taiwan’s economy, pundits say Taiwan is not ready to open its doors to the casino cash cow.
“Taiwan is strategically placed to capture a share of the regional casino market,” said David Green, a gaming practice director of PricewaterhouseCoopers (Macau) Ltd.
Home to quite a few high rollers who presently go elsewhere to gamble, Taiwan is adjacent to China and is closer to Japan and South Korea than Macau — the Asian gaming Mecca — Green told the Taipei Times in an e-mail interview.
There are some issues, however, that Taiwan needs to address in order to successfully develop a destination casino industry, including the regulatory standards it will adopt, the tax rates and license fees it will apply, the alignment of investment requirements and realistic projections of the market.
“Taiwan shouldn’t expect developments of the size of those in Macau and Singapore,” he said.
The government should also determine the kind of access restrictions there will be to the casinos, Green said.
That includes whether locals would be able to play, the number of casinos permitted, whether their opening hours would be limited and if a licensee would be able to set the number of tables and machines it operates, Green said.
“Taiwan does present a unique risk profile, but also a significant opportunity, though the latter will be constrained if gaming is restricted to the outlying islands,” he said.
Policymakers in Singapore, which is hoping to rival Macau with two massive new casino projects set to open early next year, have from the beginning taken a more conservative approach.
Unlike Macau, Singapore’s Casino Control Act of 2006 only allows two casinos to operate for 10 years, one run by Sands and the other by Malaysia’s Genting BHD.
The approaches it has taken include higher minimum age limits for casino entry and stricter laws about where gambling machines can be located.
They have also introduced a raft of laws aimed at guarding against gambling-related social problems.
Taiwan has been caught in a debate about legalizing casinos for the past 20 years.
In January, the government finally legalized casinos on the outlying islands of Kinmen, Matsu and Penghu, realizing President Ma Ying-jeou’s (馬英九) policy pledge during his presidential campaign.
However, establishing casinos must be approved in a referendum by local residents, while casinos remain banned on Taiwan proper.
More than 42 percent of Penghu’s 73,651 eligible voters turned out to decide the fate of casinos in the archipelago county in a September referendum.
A total of 17,359 votes, or 56.44 percent, voted against opening casinos. The referendum cannot be held in Penghu again for another three years.
This crushed the hopes of Isle of Man-based AMZ Holdings PLC, which owns 11 hectares of land on Penghu and has said it hoped to win a casino license to build a US$300 million, five-star, 500-room resort.
“My feeling is that Penghu was not the preferred location for investors. Kinmen is certainly more attractive because of its location, assuming mainlanders are able to travel there to gamble,” Green said.
Even if the Penghu referendum were to have offered the green light, whether Taiwan has enough personnel to cope with the influx of gamblers around Asia is another issue.
“To make sure Taiwan has enough people to cope with the booming human resource demand, the government should set up an authority to check qualifications and issue job licenses for gaming staff,” Chui Jen-hsiung (崔震雄), a professor at Taiwan Hospitality & Tourism College, wrote in his blog.
Front-line employees working in the casino industry — such as dealers, cage operators and surveillance staff — have to take courses and get certification to gain qualification.
The college started to offer gaming courses last year to pave the way for the possible opening of casinos.
Despite these obstacles, Liu Day-yang (劉代洋), a business administration professor at National Taiwan University of Science and Technology, remains upbeat about the prospect that Taiwan will establish a casino industry in Penghu or Kinmen.
Despite infrastructure problems with small or lacking airports and harbors on the two islands, he said, these issues could be easily fixed when international operators begin pouring in investments to enhance the facilities.
Even if a referendum were passed, it would take at least four years before a casino could finally open its doors to customers, he said, adding that this would buy Taiwan more time to observe and learn from the experiences of how Singapore and Macau fare in their gaming operations.
“We are so much bigger in terms of geography and we have many tourism resources that Singapore and Macau lack,” Liu said.
“To rival them, we must come up with one ‘killer formula’ that integrates our tourism resources into the gaming industry,” Liu said.
The establishment of a casino means more than just gaming facilities.
It could be an integrated resort with casino as the anchor tenant, but includes other facilities such as theaters for resident performances, luxury shopping malls, fancy hotels and star-rated food and beverage outlets, to name a few.
Marina Bay Sands in Singapore offers a perfect example.
Scheduled to open early next year, the US$5 billion integrated resort will feature two theaters with a total of 4,000 seats, large and flexible convention and exhibition facilities, a luxury three-tower hotel, a science museum and a shopping mall, in addition to Las Vegas-style gaming rooms.
On Oct. 21, the resort announced it would bring the award-winning Broadway musical The Lion King to its theater next September, marking the first time the acclaimed musical will show in Southeast Asia.
If the gaming industry is set up in Penghu, it could draw 5 million visitors a year to the island with tourism-related income hitting NT$50 billion (US$1.5 billion) a year.
Every visitor is expected to spend an average of NT$10,000 on gambling and another NT$10,000 on other activities, statistics from the Council for Economic Planning and Development said.
One casino license will help create 5,000 jobs, and a total of 30,000 to 50,000 gaming and tourism-associated employment opportunities would arise if Taiwan has a gaming industry, the council’s data showed.
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