Taiwan Serious About Casino Resorts, At Last

Special commentary on the news (Taiwan Offshore Casinos)

By:  Professional Ground Decoder

3rd April 2011

 

Timing is right this time?

The latest progress on Taiwan’s offshore casinos bid was that the country has completed the drafting of its casino legislative paper and ready for briefing to the offshore islands that mifht be interested and, for submission to Taiwan legislative authority for passing the act.

 Some of the pertinent points in the draft casino act include but not limited to,

 (1)  Successful casino operator will have to pay NT$130m out-front in order to obtain casino license for 30 years period.

 (2)  Gaming tax regime is likely to be in between what Macau and Singapore tax on their operators, in order to be competitive.  Gaming tax (excluding corporate tax & other fees) is expected to be in the region of 12 – 15%.

(3)  The authority will put in place responsible gambling measures such as what’s being practiced in Singapore.

(4)  Casinos will be an integral part of international integrated resorts. Two licensees will be given in first phase and within the first 10 years period there will be no 3rd operator allowed.

(5)  Bidding chances will largely be based on the scale of investment to be committed (by operator) as well as operator’s experience in mega resorts.  

(6)  Probity checks will be made highly transparent and conducted by international professional bodies approved by the authority.

(7)  Casino entry levy of NT$2,000 (for locals) will be implemented as in the case of Singapore.  Likewise for Exclusion practice.  Those below the age of 20 will not bw allowed into casino.

(8)  Other preventive measures such as no credit for local patrons, no ATM inside casino, loss-limits, restrictive casino marketing etc. will also be put in place.

(9)  The draft legislative paper will be briefed to offshore islands (Jinmen, Mazhu and Punghu etc.) in the coming months and, seminars to discuss its impact involving the academia, business community and government bodies in June 2011.

(10)  The draft casino legislative paper will be tabled for debate and passing of casino act in the Taiwan National Legislative Council by end of 2011. After which a Commission for Casino Control will be established by law.

Progessional Ground Decoder has interviewed Mr. Felix Ling, an Asian casino development expert who was the exclusive consultant to Singapore Integrated Resorts project and also, a consultant on casino-tourism and Asian public equity (casino sector).  The following are the extracts of the interview:

Pro Ground:  ‘Mr. Ling can you tell us, the impact of the latest announcement of status progress by Taiwan with regard to liberalization of casino industry on offshore island(s)?’

Felix:  ‘In my view, after witnessing the tremendous success of Singapore Integrated Resorts, Taiwan has realized that they mustn’t waste any more time about the issue of whether it’s good to introduce IR related casinos to their soil. This will trigger off renewed interest of tourism development via integrated resorts in Asia.’

Pro Ground:  ‘In your view, are Taiwan’s offshore islands good locations for multi-million dollars investment as in the case of Singapore and Macau?’

Felix:  ‘There are many factors to consider for that. Better innovation should be a key factor for subsequent introduction of casino integrated resorts in Asia. There’s still risks to watch out for when operators go for offshore islands to build such large scale resorts.’

Pro Ground:  ‘How China will react to Taiwan’s initiative? I mean to have international resorts with casinos on the island of say, Jinmen or Mazhu or Punghu.’

Felix:  ‘This is an interesting idea. For sure Beijing does not like what happens in Macau.  The territory has gone down the road of no-return in terms of overly invested in casino industry that leads to many teething problems. It might not be a bad idea for Taiwan to take some loads out of Macau.  So long as the cross-straits relation is maintained.’

Pro Ground:  ‘Will Taiwan’s casino resorts perform as well as Singapore if not like Macau?’

Felix:  ‘That’s too soon to predict such a scenario. But i will not be surprized at all that the intended offshore casinos can do very well.  Do not under estimate the economic and consumer power in East Asia.  Taiwan casino resorts will attract patrons from mainland China, Hong Kong, Japan,  Korea and new markets such as Russia.  Taiwanese are known for creative approaches to business.  The world largest Universal Studios in Korea will come online by 2014 and that will boost East Asian tourism as a whole.  Timing is important.’

Pro Ground:  ‘Will Macau casino old-hand Lisboa (SJM) pays particular interest to invest in Taiwan casino especially they are Chinese capital-based operator.”

Felix:  ‘How the game will be played out is hard to predict at this juncture. With two licenses for bidding, I would think that one of the winners will be American, taking into strategic positioning between Taiwan and America. Should SJM is keen to bid for a piece of the actions, that they must first have the support from their big boss – Beijing.’

Pro Ground:  ‘Thank you Mr. Ling for your insightful viewpoints.”

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