Taiwan: Penghu casino referendum likely by the end of the year

Share this article

Penghu Island, the previously favoured site for casinos in Taiwan, is once again preparing to hold a referendum to determine whether gaming will be permitted in the county. The question is – will this be a repeat of 2009, or will it herald an era of casino development in Taiwan? James Walker reports.

 

[dropcap]O[/dropcap]ver recent years, Taiwan – one of the world’s great untapped casino markets – has suffered a series of false starts when it comes to the passing of gaming legislation. Now, however, a campaign spearheaded by the centre-left Democratic Progressive Party (DPP) has reignited the possibility of casino tourism being developed in the country’s outlying Penghu archipelago.

With the attention once again focused on Taiwan, June saw the publication of a white paper, ‘The History and Current Status of Gaming in Taiwan’, by Global Market Advisors. According to the report’s author, Bill Bryson, senior associate at the casino gaming and hospitality consultancy firm, “Penghu has already begun the necessary process for holding a casino gaming referendum, probably by the end of the year”.

“The supporters of the referendum have collected far more than the number of signatures required to initiate the referendum process and the petition for the referendum is being processed by the county’s referendum commission,” Bryson stated. “This means that a DPP-governed county, with the support and approval of the DPP-led county government, will soon hold a referendum to approve the establishment of casinos.”

He added: “Taiwan has long been a venue of interest among foreign casino investors, originally because of the importance of Taiwan as a source of customers and more recently because of the potential to reach Chinese customers through the ever-increasing transportation and tourism links between Taiwan and China.

 

Fast forward to 2016, and Penghu is once again preparing to hold a casino gaming referendum.

 

“The effort to bring casino gaming to Taiwan, however, has been a journey of stops and starts over the past 25-plus years, though there has been fairly steady progress since 2009. In 2009, the Taiwanese island of Penghu held a public referendum on the establishment of casino-based tourist zones. The referendum was the culmination of nearly 20 years of advocacy on the part of politicians, gaming companies, university professors and professional advisors. The referendum failed.

“However, in 2012, Matsu held a referendum that passed. While the success of Matsu’s referendum was supposed to politically incentivise the Taiwanese government to pass gaming legislation regulating casino operations, and the government did retain a law firm to draft the Tourism Casino Administration Act, the Act has been stalled in Taiwan’s legislature since 2013.

“Fast forward to 2016, and Penghu is once again preparing to hold a casino gaming referendum. The question is – will this be a repeat of 2009, or will it herald an era of casino development in Taiwan? While the former is possible, there is reason to be optimistic about the latter.”

According to Bryson, the passage of a referendum in Penghu, which locals consider part of Taiwan, would likely force the legislature to pass the draft act. “Should the draft act pass, then the process of accepting and processing applications for casino licenses would likely begin, assuming, of course that the provisions of the draft Act would create an operating environment acceptable to international casino resort operators,” he said.

Bill Bryson
Bill Bryson: ‘Penghu has already begun the necessary process for holding a casino gaming referendum’
MARKET SNAPSHOT – PENGHU

Located in the Taiwan Strait and with an area a little under five times the size of Macau, Penghu is the second largest of the eligible islands for casino tourism in Taiwan. Like Matsu, Penghu is actually an archipelago, with one large main island and a number of smaller islands, the largest of which are connected by bridges, but some of which are only accessible by boat. Inter-island transportation is somewhat limited during certain times of year because of high winds and the rough seas that come with them. As a result, interested casino developers have focused on potential development sites on the main island and those islands that are connected by bridge to the main island.

“In the event of a successful referendum, the target market for a casino in Penghu would be much more diverse than the target market for Matsu,” Bryson explained. “Given the ease of travel between Taiwan and Penghu, the popularity of Penghu with Japanese tourists, and the upgrades that have been made to the airport over the years, the target market would be primarily Taiwanese and Japanese players, with additional play possible from Chinese and other Asian players.”

 

Share this article