Taiwan has finally annulled a quarter century old prohibition of casinos as part of a long anticipated legislative package outlining the framework of the new Taiwanese gambling laws.
Taiwan’s parliament comfortably passed the new casino bills package by a 71-26 solid majority which will finally see Taiwan become the home of mega-casinos similar to Singapore. The casinos may only be constructed after the local residents’ approval of the entire project via a referendum.
Taiwan is only a step away from approval which will happen when President Ma Ying-jeou signs the bill into law sometime within the next three month. This is seen as a formality since President Ma of the ruling party has been pushing for this law and made it a campaign promise. Despite the jubilation, a limited number of licenses will be issued, somewhere between two and four according to the Taiwan Ministry of Transportation and Communication (MOTC).
Each license will have 10-30 year duration and allegedly Taipei has no plans to issues additional licenses for at least fifteen more years. The new legislative package has no provision for licensing of the currently illegal Taiwanese internet casinos.
The proposed tax on casinos included in the framework is extremely competitive, at 12-15% of gaming revenue including licensing fees, which is sure to attract all of the industry’s top players. In comparison, Macau has a 34% direct tax on casinos. The casinos are planning to follow the Singaporean model of limiting gambling by local resident by charging citizens a significant entrance fee.
“In the short term, perhaps in the next five years, I don’t think casinos in Taiwan will greatly affect the Macau gaming sector,” CLSA analyst Huei Suen Ng stated, a view shared by two additional economists.
Online gambling news in Taiwan reports that PRC may not look kindly upon its citizens traveling to Taiwan for gambling purposes and taking away revenues from Macau casinos. Some analysts believe that PRC may impose traveling sanctions if gambling and not tourism is the main reason behind its citizens’ primary purpose for visiting Taiwan.
“Taiwan needs to position casino gaming in the context of a larger tourism strategy,” Galaviz & Company chief economist Jonathan Galaviz said – “only then would China possibly look the other way”.