Inside Asian Gaming

INSIDE ASIAN GAMING | October 2010 32 Still, even providing clear details and forecasts may have little effect in swinging the tide of public opinion in Kinmen, since at its heart, the casino issue is a moral and emotional one. Even in the absence of legal casinos, Taiwanese are avid gamblers and get their fix at electronic gaming arcades that the authorities turn a blind eye to. It will just prove much harder to ask Taiwanese to formally condone gaming. Mr King revealed that the latest polls showed most Taiwanese were still averse to embracing legal casinos on their soil. State of play Taiwan currently has around 3,000 electronic game arcades offering quasi- gaming, in a similar fashion to Japan’s pachinko industry. Taiwan’s Electronic Game Arcade Business Regulation Act provides for two categories of arcade: i) Generate rate, which provide entertainment-focused games to the public, including minors, and ii) Restricted rate, which are off limits to people under eighteen years of age, where quasi-gaming is understood to take place. Pachinko remains popular in Taiwan—a legacy of the Japanese occupation in the early 1900s—but the country’s restricted rate arcades have come to be dominated by slots and multi-player machines offering baccarat, sic bo and roulette. Bingo also still enjoys a strong following in Taiwan, particularly among the older generation. The table on the right shows the distribution of Taiwan’s quasi-gaming arcades as at end-December 2008 (latest available figures). Prior to the arrival of the IRs in Singapore, there was a small but thriving slot club market in the city-state. The slot halls were legally sanctioned as gaming venues, and appropriately regulated. By contrast, the legal grey-area under which the restricted rate arcade market operates has probably not helped the public perception of gaming in Taiwan. Despite their less-than-ideal operating environment, Taiwan’s restricted rate arcades are estimated to generate over US$5 billion annually. That suggests plenty of pent-up local demand for legal gaming to support an ambitious casino venture, even if, as many fear, mainland China blocks its citizens from playing at Taiwan’s proposed casinos. After all, in its special administrative region of Macau, mainland China already has an officially-sanctioned outlet for all its citizens’ pent-up casino gambling demand. The casino developments in Taiwan could also hardly hope to compete with those in Macau, where billions of dollars have been invested since the liberalisation of the industry in 2002 to create a string of dazzling casino resorts. An honest pitch? The Singapore government trumpeted the IRs as a way to boost tourism, resulting in a widespread misconception among locals that the bulk of the casinos’ winnings would derive from foreigners. It is now clear—as most industry watchers had predicted— that residents of the affluent city-state will contribute the biggest chunk of revenues, despite the onerous S$100 a day or S$2,000 a year casino entry fee levied on them. It is unlikely the canny Singapore government believed its citizens would be kept out by the entry fee, which was more likely designed to make the introduction of the IRs more palatable to locals, while contributing to state coffers. The determination of the fee level no doubt included consideration of the opportunity cost—a Singaporean intent on gambling is more likely to fork out S$100 for the convenience of gambling at one of the local casinos than to be subject to the sailing schedules of the casino cruise ships operating out of the city or having to make the trek to the closest land-based alternative at Genting in Malaysia. Unless it wishes to undertake a shameless attempt to mislead its public, the Taiwan government will have to admit the bulk of demand at its proposed casinos would be generated by locals. The government can then furnish estimates of howmuch money its citizens lose in casinos abroad, and outline how revenues raised fromtaxingdomestic casinoswouldbe used to support community causes. Notably, the Singapore government’s failure to do this is now partly fuelling anti-casino sentiment, since 100% of the proceeds of Singapore’s slot club market—which has been dealt a heavy blow by the IRs—continues to be used to fund social and welfare projects. Such an honest approach to presenting the case for legal casinos in Taiwan may very well fail to surmount ingrained prejudices, particularly since a major part of the resistance in the offshore islands appears to stem from a ‘not-in-my- backyard’ mentality, rather than economic or even moral considerations. An honest approach will, however, likely lead to less public discontent following the opening of the casinos than is currently emerging in Singapore, where many citizens may feel they had been duped by a pitch which hinted locals would be a rare sight on the IR gaming floors. Distribution of Taiwan’s Restricted Rate Electronic Game Arcades Northern Taiwan Taipei 49 Keelung 77 Yilan 86 Taoyuan 103 Hsinchu 90 Miaoli 77 Total 482 Central Taiwan Taichung 366 Nantau 11 Changhua 343 Yunlin 254 Chiayi 150 Total 1124 Southern Taiwan Tainan 715 Kaohsiung 394 Pingtung 489 Total 1598 Eastern Hualien 71 Taitung 105 Total 176 Offshore Penghu County 12 Lienchiang County 0 Kinmen County 8 Total 20 Singapore residents who are reluctant to pay the local casino entry fee can consider making the trek to Genting – City of Entertainment in Malaysia Feature