Casino project is not a sure bet

PUBLISHED : Monday, 16 July, 2012, 12:00am
UPDATED : Monday, 16 July, 2012, 12:00am


On July 7, when both sides of the Taiwan Strait commemorated the 75th anniversary of Chinese and Japanese troops clashing in the Marco Polo bridge incident outside Beijing, Taiwan's tiny outlying island of Matsu held a referendum to decide whether to approve construction of a casino resort.

While the incident in 1937 ultimately led to the eight-year Sino-Japanese war - regarded as the start of the second world war in Asia-Pacific - the referendum also made history as Matsu residents voted to give Taiwan its first legal casino.

But other than marking another milestone in Taiwan's democratic development by holding a referendum, the casino project is full of uncertainties. Some analysts predict it will end up as a castle in the air.

A total of 1,795 Matsu residents voted in favour of the casino with 1,341 against. An amendment to Taiwan's Offshore Islands Development Act allows gambling on remote outposts if approved by a majority of islanders.

'We have no choice but to accept the result of the referendum in exchange for local development,' said Yang Sui-sheng, head of the Lienchiang government that administers the Matsu island group.

With no modern infrastructure and transport, the islands were once under military rule as a frontline outpost against possible invasion from the mainland after Nationalist forces retreated to Taiwan at the end of a civil war in 1949. Matsu is just kilometres away from the coast of Fuzhou , capital of Fujian province.

Cross-strait relations have improved sharply since mainland-friendly Taiwanese President Ma Ying-jeou took office in 2008 and adopted a policy of engaging Beijing.

Yang said the casino could give Matsu 'a chance for change'.

Lin Chung-chao, president of the Matsu Business Council, who proposed the casino project, said Matsu needed to develop its tourism industry. 'At a time of a government budget crunch, developing casino gambling is a solution,' he said.

Developer Weidner Resorts Taiwan, which has lobbied for approval over the years, plans to build the resort on Beigan Island.

It has pledged to improve infrastructure and transport facilities for Matsu, including building an international airport, a university and a causeway linking Beigan with Nangan in three years. 'Our company plans to invest NT$60 billion [K$15.53 billion] in turning Matsu into a 'Mediterranean Sea resort in Asia' by building the casino there,' said Julia Lee, vice-president of Weidner Resorts Taiwan. 'We will do our best to bring prosperity to Matsu.'

Weidner, a former partner of Las Vegas Sands, also plans to build a hotel, shopping mall and a leisure activity area at the resort on a 100-hectare site next to Beigan airport, Lee said.

The company's chief executive, Bill Weidner, said recently that he was confident of turning Matsu into a successful casino resort in light of similar projects his company had built in Macau and Singapore.

It would create up to 5,000 local jobs and attract millions of visitors from Taiwan and coastal mainland cities such as Wenzhou and Fuzhou, he said.

'Taiwanese make 1.2 million visits to Macau where they contribute between NT$600 million and NT$900 million in tourism revenue a year,' Weidner said. That money would stay in Taiwan if it had its own casino, he said.

Weidner urged Taiwan's parliament to speed up casino legislation so that his company could get the project rolling.

The legislation is required before authorities can issue gambling licences. The cabinet is still reviewing a gambling regulation bill drafted by the Council for Economic Planning and Development in late 2008, and it may take some time before the bill becomes law.

'The cabinet respects the result of the referendum, but cross-department discussions by the government are needed,' said government spokesman Hu Yu-wei.

Transport Minister Mao Chi-kuo said strict control of gambling activities would be essential, including setting up a commission with the police and a foundation to prevent gambling addiction, to avoid crime and other problems. 'Without them, it would be disastrous,' he said.

Interior Minister Lee Hung-yuan said there were four limiting factors that had to be addressed before a casino could be built - transport, water, fuel and electricity.

Existing airports on Beigan and Nangan islands are too small to handle large planes and cannot operate in poor weather. The water supply serves a few thousand residents but would not cater for thousands of tourists. Fuel and electricity are also limited.

Weidner said these problems could be overcome if his company started work on the development, including providing a seawater desalination plant and power generating facilities.

Observers say the project is no ordinary development scheme. 'It involves a political battle between the ruling Kuomintang and the opposition Democratic Progressive Party (DPP) over what to do with the draft gambling regulation act,' said George Tsai Wei, a cross-strait expert and professor at Chinese Culture University in Taipei.

Although the DPP, which has strongly supported referendums in Taiwan, said it respects the vote of Matsu residents, 'the position of our party is against opening casinos that would increase vice in Taiwan,' said Ker Chien-ming, DPP caucus head in the legislature.

DPP legislator Kuo Jung-chung warned against legalising gambling, saying the move might create more social problems.

Tsai said without a consensus, it would take years for both parties to review the bill.

Weidner said he would be patient but could not wait forever. 'I would say a year is reasonable,' but 'we cannot wait forever as there are investment opportunities elsewhere'.

Yeh Chih-kuei, a professor of tourism and leisure activities at Dong Hwa University who has researched US casinos, said Weidner's offer would probably be an impossible dream.

'Casinos in Las Vegas and Atlantic City caused crime rates and corruption of officials to surge in those areas,' he said.

'Weidner is using the standard of the casinos in Nevada to estimate the possible benefits for Matsu, and with what Matsu has, it would be difficult for it to produce those kind of benefits in the future.'

He said Weidner has targeted mainlanders as the main source of revenue. But Beijing had said that mainland tourists could visit Taiwan for sightseeing, but not to gamble.

Environmental as well as anti-gambling activists have campaigned against the project, saying it would destroy the natural landscape of Matsu, and corrupt residents.