A voter initiative that legalizes casinos for the first time on land controlled by Taiwan should add to the already strong flow into Asia of gambling tourism from China. But much about the future of the industry in the independent island nation remains a mystery.
On July 7, voters on the rugged and barely developed islands of Matsu passed a referendum to let the government in Taipei issue casino permits. Observers say the vote indicates that Taiwanese citizens, in the interest of making money, are willing to accept the risk of social problems and are open to an influx of visitors from the country’s old political enemy, Communist China.
Matsu lies within eyesight of the mainland, and tour groups from the other side already come over for sightseeing.
The referendum also could fuel pro-gambling sentiment in the Taiwan Strait archipelago of Penghu or in Kinmen, a group of Taiwan-controlled islands just off the mainland city of Xiamen. Kinmen and Penghu have better infrastructure than Matsu, including bigger airports, meaning less investment and easier returns for casino operators.
Penghu voters turned down a casino initiative in 2009.
Historically, political leaders in Taiwan have feared any influx of mainland Chinese on the belief that it would lead to spying or visa overstays. Since the Chinese civil war of the 1940s, when the Nationalist Party’s Chiang Kai-shek fled to Taiwan and set up a rival government that remains intact today, China has claimed sovereignty over the island. That political tension had stopped all but a trickle of mainland Chinese from visiting.
But people from the mainland region closest to Taiwan, mainly Fujian Province, would be likely to gamble in casinos in the outlying islands, said Anita Chen, Taipei managing director with the New York-based lobbying firm Park Strategies. That population comes to 80 million people with average annual per-capita income of US$3,820. Neither are those gamblers likely to take customers away from Macau, which is further south and relies largely on visitors from adjacent Guangdong Province, Chen notes.
Taiwan has not said how many casino licenses it would give to Matsu, where about 10,000 residents now live off fishing, military outposts and tourism. Officials in Taipei said prior to the referendum that they would pursue a gaming model like that of Singapore, which carefully regulates its two casinos. Those operations are family-style resorts, which Taiwanese officials say could be designed to reduce any appeal to gangsters or prostitution rings that opposition voters on Taiwan’s islets fear would find their way to local casinos.
The country’s Transportation Ministry, charged with issuing casino licenses, has said the number of permits and the scale of any casinos are still under study. The ministry is working with more than 20 other government agencies on authorizing legislation, which will outline who can operate what types of casinos. That law must proceed to parliament, where opposition lawmakers have successfully defeated past casino-related measures.