Casinos in Taiwan may generate USD 3 billion in total annual revenue should the island legislate to legalize the industry, according to Las Vegas-based industry magnate Larry J. Woolf, who manages 13 casinos in North America.
“I don’t think it’d be too much of a struggle to reach USD 1 billion“ in revenue each should the government allow three casinos, Woolf, CEO of London-listed Amazing Holdings Plc., said in an interview in Taipei.
Taiwan is considering allowing casinos on outlying islands such as Penghu. Woolf is betting the legislation will be passed, paving the way for Amazing to open the island’s first casino as rivals Wynn Resorts and Las Vegas Sands expand in Macau, which reaped USD 9.5 billion in gambling revenue in the 12 months to September 30.
“Taiwan’s market potential for casino gaming revenue, in the context of large-scale integrated resort and tourism development, is significant,’’ said Jonathan Galaviz, a partner at Las Vegas-based hotel and casino consultancy Globalysis Ltd.
Amazing, which is based in the Isle of Man, plans to spend us$ 50 million on the first phase of a 300-room hotel resort in Penghu to be opened by the end of 2009, Woolf said. The development, which will eventually be expanded to 600 rooms, is designed to accommodate a casino should the company win a license.
Shares of Amazing, which are listed on the London Stock Exchange’s Alternative Investment Market, have surged 61 percent this year and closed at 240 pence each yesterday.
Casino veteran Woolf built and operated the MGM Grand in Las Vegas which was then the world’s largest casino, and opened the most profitable, the Casino Niagara in Canada. His Navegante Group manages at least seven casinos in the U.S., including the Plaza Hotel & Casino in Las Vegas and the Casino Fandango in Carson City, both in Nevada. Now Woolf says Taiwan could build the world’s largest casino, surpassing the 800-table Venetian Macao opened by Sheldon Adelson’s Las Vegas Sands in August.
Taiwan’s government is discussing the feasibility of casinos and seeking public approval before opening up the market, the Government Information Office said in an August 9 statement. A December 2005 plebiscite of Penghu residents found 57 percent in favor of legalizing casinos, although the turnout for the vote was just 21 percent.
In addition to Penghu, Woolf recently visited the southern Taiwan county of Chiayi, which he says would also be a possible site for a subsequent casino should Amazing be allowed multiple licenses.
“It would take several years and billions of dollars of public and private sector investment to make Taiwan, or one of its islands, into a premiere leisure tourism destination such as Macau,“ Globalysis’ Galaviz said.
Macau’s tax rate on casino revenue is 35 percent, compared with Taiwan’s corporate tax rate of 25 percent. Its tax rate on gambling is yet to be set. “I like this market more than Macau, especially if the tax rate is lower,’’ Woolf said in the November 19 interview.
Macau’s gambling revenue in the third quarter was USD 2.6 billion, 45 percent higher than a year earlier and 4 percent more than the previous quarter.
Taiwanese make up the largest portion of non-China visitors to Macau’s resorts with many also traveling to Las Vegas to gamble, according to Henry Tsai, assistant professor of hotel and tourism management at Hong Kong Polytechnic University. Taiwan already has vast pent-up demand from illegal gambling which would support the casino industry, he said.
One illegal gambling operation uncovered in May was found to have revenue of USD 4 million, with more than 170 other cases investigated by police, according to a report by the National Police Administration.
“In Taiwan, there’s a huge amount of unaccounted economic losses from underground gambling,“ Tsai said. The government should “turn this effort around and legalize gambling or make it a formal economic activity.“