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Taiwan has clearly made a statement by repealing its gaming ban after more than 15 years.  Penghu, Kinmen, and Matsu are possible new gaming jurisdictions.

Referenda coming up in Penghu and possibly Kinmen will determine the fate of gaming in Taiwan.  We believe that the earliest timing of opening would be 2011/2012 with approximately 2,000 slots maximum.  Penghu is the frontrunner at present, with a referendum already scheduled, and the best infrastructure of the three possible new gaming jurisdictions.  The incentives are clear; in the last few years, 5% of visitation to Macau has been from Taiwan.  Below are the details for Penghu.

The Process:

  • Two licenses are expected to be issued
  • The deadline for bidding for licenses is September 21, and the selections will be announced the following day
  • Bids for drawing up a regulatory framework are expected to be announced later this year
  • Bids must include minimum investment levels, the scale of operations, review mechanisms, and potential international investors if any
  • Bids must also address how the proposed project will be differentiated from other gaming markets in the region

The Requirements:

  • Casinos must be established within international tourist resort areas
  • The selected contractor is expected to assist the Minister of Transportation and Communications (MOTC) determine the scope and management of local integrated resorts, including the decision surrounding the mix of gaming and non gaming facilities in future resorts
  • Both domestic and international investment will be welcome but the acceptable percentage of international ownership is to be determined

Issues:

  • Infrastructure in Penghu (although most advanced of the three possible new gaming locations) needs improvement and ease of travel from China to Penghu needs to be suitable for tourists
  • Airport runway is being extended to accommodate larger passenger jets
  • Charter flights between Penghu and 21 Chinese destinations have been approved and plans to ease visa restrictions for Chinese residents visiting Penghu are underway

Potential bidders:

  • AMZ group has been widely cited as a possible developer. 
    • Navegante Group which operates casinos in Las Vegas and Canada, would be the operator. 
    • AMZ plans on investing $300m to build a give-star 500 room resort in order to win a casino license.  The company owns 11 hectares of land on Penghu.
  • Melco - The head of the Democratic Progressives Party’s Kinmen chapter, Chen Chang-chiang, has been quoted in the press recently as saying that Lawrence Ho toured Kinmen August 7 and expressed a “keen interest” in tapping the market.  Kinmen has also been touted as a possible new casino location.  A referendum on the establishment of casinos may be held there soon (a petition demanding such has been handed in with signatures that need verification).
  • WYNN – We’ve only heard rumors that Wynn is involved but given their success in Macau, it wouldn’t surprise us.