Gaming/Genting HK: According to Zaobao News, Taiwan has drafted a casino legislative paper, to approve Spore-style integrated resorts on its offshore islands (Jinmen, Mazhu, Penghu). Under the draft bill, Taiwan will issue 2 gaming licenses in the 1st phase & no 3rd operator will be allowed within 10 years.
Successful operators would have to pay NT$3b upfront for the casino licence for a 30-yr concession & the tax regime in between Macau & Spore in order to be competitive with the gaming tax rate set at 12-15%.
Bidding chances will largely be based on the scale of investment to be committed as well as the operator’s experience in mega resorts. Probity checks will be transparent & conducted by int’l professional bodies approved by the authorities. Taiwan also plans to impose strict controls such as those similar to those in Spore
- casino entry levy of NT$2,000 (for locals), exclusion practice, minors below the age of 20 will not be allowed entry to casino. Other preventive measures include no credit for local patrons, no ATM inside casino, loss-limits, restrictive casino marketing etc will also be put in place.
Discussions with the offshore islands will take place in the coming months & the draft paper could be tabled for debate in the Taiwan National Legislative Council by end of 2011. Obviously, a possible bidder could be Genting HK, which has the track record & resources but we could expect keen competition from the Macau names as well. However, too premature to ascertain if Genting HK will clinch the concession & the potential re-rating on the stock price.
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