Inside Asian Gaming

January 2014 | INSIDE ASIAN GAMING 9 COVER STORY to power in 2008 of the rightist, pro-business Kuomintang it comes up again and again. Prominent advocates include Chen Ken Te, a KMT lawmaker from Taoyuan who co-chairs the Transportation Committee in the Yuan that funds Mr Yeh’s ministry. Billionaire electronics magnate Terry Gou is another. He wants to see a special resort district with casinos created in New Taipei City, an idea said to have the backing of former vice premier and New Taipei City Mayor Eric Li Luan Chu. Mr Chen is pushing for casinos at the airport SEZ in league with Taoyuan Mayor John Wu. The difference is that no member of the government has ever endorsed the idea in public, that is, until Mr Yeh dropped his bombshell in October. And the minister himself has stated more than once since taking office last year that casinos are not a consideration for the main island. Why he departed from the script that day in the Yuan is a mystery. For sure it got the industry’s attention. People close to the scene are still wondering about it. They say he hadn’t cleared his remarks with the ministry beforehand. They also say he’s been frustrated with the slow pace of progress at the SEZ, and maybe he let that slip. The SEZ—the much-hyped Taoyuan Aerotropolis—the gateway to Taiwan’s economic future, as the government trumpets it, is a sprawling high-tech mega-city 45 kilometers from Taipei, 4,500 hectares in size, the locus of a projected NT500 billion in private-sector investment (US$17 billion) and spin- offs forecast at more than NT2 trillion, including 300,000 jobs. A tempting spot for some big hotels with big casinos, no question about it—right on the doorstep of a bustling city of 9 million—and all those mainlanders, a half-billion or more, within a few hours’flight. Yet the package of casino regulations the government has approved, the Tourist Gambling Site Management Act, when it was finally sent to theYuan last spring, makes no reference toTaipei, Aerotropolis or Taiwan. This prompted Tsai Cheng Yuan, a KMT legislator from Taipei, to propose expanding the Offshore Islands Development Act, the constitutional basis for gambling in the Taiwan Strait, to include the phrase “and other relevant acts,” which paved the way for Mr Chen, who represents Taoyuan County, to offer an amendment to the law governing Aerotropolis to specifically permit casinos. Anita Chen is managing director of gaming consultants Park Strategies Taiwan. Writing late last year in Global Gaming Business , a US trade monthly, she said: “It is reasonable to conclude that Yeh has been mulling over the possibility of allowing gaming as a means to accelerate the progress of the Aerotropolis development. He has also been quietly considering alternative ways to make gambling (other than offshore island gaming) viable in Taiwan and is interested in nurturing support from the legislature for an official mandate for his ministry.” So it’s plausible to believe the minister’s remarks that day in the Yuan had not come out of the blue after all. But if policy is indeed shifting it will somehow have to be reconciled with the letter and the spirit of the government’s commitment to developing the offshore islands. It will have to contend also with a popular mistrust of the gaming industry that runs deep among Taiwanese. It had done neither by December when the Tsai and Chen proposals hit a wall. The opposition Democratic Progressives, who had brought an end to the Nationalists’ one-party state in the 1980s and governed from 2000 to 2008, are unshakably anti-casino. At the same time there aren’t enough pro-casino members among the KMT’s current 26-seat majority who feel strongly enough about it to want to deal with the controversy. The day after NewYear’s the Yuan’s Transportation Committee bucked its own co-chairman and struck out 83 of the 113 provisions contained in the government’s draft regulations. What they left was a framework to guide the licensing of casinos but only in accordance with the Offshore Islands Development Act, which means only on the six archipelagos in the Taiwan Strait, and only by popular assent. And they included in their revisions a measure to block any public investment in the industry. For the advocates of a greater Taipei market, while their hopes aren’t dead, they are now officially on life support, tabled for negotiations by a broader group of legislators before the commmittee’s verdict is presented to the full Yuan for review. The chance, of course, exists that those discussions could result in a resurrection. It isn’t a very good one, though. According to Ms Chen, “In Taiwan’s political and social atmosphere, any effort to push for legalization of main- island gaming at this moment would only offer free ammunition to anti- gaming groups and cause unnecessary delays in passage of the gaming law.” For the government and the inhabitants of Matsu, all 7,000 of them, that comes as a considerable relief. Magic Man When Penghu scheduled a referendum on casinos shortly after the Offshore Development Act was passed, opponents saw it as a critical first line of defense. Closer to Taiwan than Matsu and five times larger, with 10 times more people, more developed, more prosperous, it was the scene of an all-out campaign by the DPP. Tsai Ing Wen, the party’s leader at the time who would later run for president, flew in personally to speak against the evils of gambling. The referendum lost. Thirty kilometers to the northwest it’s been an entirely different story. Tiny Matsu, 19 islands hugging the coast of China with a total land mass about the size of Macau, is at its closest point only about eight kilometers from Fujian’s baccarat-hungry millions. It has local Tiny Matsu, 19 islands hugging the coast of China with a total land mass about the size of Macau, is at its closest point only about eight kilometers from Fujian’s baccarat-hungry millions. Traditional village featuring brick Fujian style houses in Matsu.