Penghu Says No to Casinos

UNCLAS SECTION 01 OF 02 TAIPEI 001177 SENSITIVE SIPDIS STATE FOR EAP/TC STATE PASS USTR FOR STRATFORD AND ALTBACH COMMERCE FOR 4431/ITA/MAC/AP/OPB/TAIWAN TREASURY FOR OASIA/MPISA AND CWINSHIP E.O. 12958: N/A TAGS: ECON ETRD PGOV TW SUBJECT: Penghu Says No to Casinos Reference: A) Taipei 44; B) Taipei 717 TAIPEI 00001177 001.2 OF 002 ¶1. (SBU) Summary: On September 26, Penghu rejected Taiwan's first local referendum on allowing a casino resort, with 56.4 percent of the voters casting 'no' votes. Although only 42 percent of Penghu's registered voters turned out for the vote, the result is binding. Taiwan officials think the referendum failed in part because Taiwan does not yet have a gambling law on its books, making Penghu voters wary of the form casinos and other gambling would take. The 'no' vote by Penghu has prompted other offshore islands to slow plans to hold similar referenda. End summary. Background -------------- ¶2. (U) On January 12, the Legislative Yuan (LY) passed amendments to Taiwan's Offshore Islands Development Act to allow casinos on islands such as Penghu, Kinmen, Matsu, and Orchid Island (ref A). The amended Act requires casinos to be located within international resorts, which also must include an international hotel and other tourism and conference facilities. ¶3. (U) In order to open a casino, however, the county or city in which the casino would be located must first hold a referendum, and over fifty percent of participating voters must approve the referendum. On May 29, the Penghu County Magistrate's office submitted an application to the EY to establish a casino on the island (ref B),and held Taiwan's first binding local referendum on the issue on September 26. Penghu Voters Reject Casinos -------------- ¶4. (U) The gambling referendum asked voters: "Should international resorts with casinos be allowed in Penghu?" Residents cast 17,359 votes against the proposal (56.4 percent of the total valid votes), and 13,397 votes for it (43.6 percent of the total valid votes). ¶5. (U) Although only 42 percent of Penghu's registered voters turned out for the vote, the result is binding. The disapproval will put off developers' plans until at least 2012, since Taiwan's law does not allow repeating a referendum on the same topic for three years. CEPD: Voters Unsure of What Casinos Will Bring -------------- - ¶6. (SBU) Wang Chih-hui, Chief of Sectoral Planning at the Council for Economic Planning and Development (CEPD),thinks the referendum failed because Taiwan does not yet have a gambling law on its books. On September 29, Wang told us that without the law, most of Penghu's residents were unsure of what form casinos and other gambling would take in Taiwan, and therefore decided to vote against opening a casino in Penghu. ¶7. (SBU) On September 29, Lai Bing-jong, MOTC Tourism Section Chief, told AIT that the Ministry planned to complete the Gambling Law draft in early 2010, and, after a public comment period, submit it to the Executive Yuan for approval and passage to the LY. According to CEPD's Wang, the current MOTC draft draws heavily from Singapore's gambling law, and because Singapore will begin allowing gambling-related businesses by the end of 2009, Taiwan will be keeping a close eye on the effect the gaming industry has on the Singapore economy and society. ¶8. (SBU) Wang said it was too early to tell if Penghu would hold TAIPEI 00001177 002.2 OF 002 another gambling referendum after three years, but he told us the result had prompted other offshore islands to slow plans to hold similar referenda for fear of sidelining casino development for three years should the referenda fail as well. Lai said Kinmen is interested in conducting a casino referendum, but would not move forward until the EY approves the Gambling Law draft. Comment -------------- ¶9. (SBU) The defeat of this referendum is a sharp blow to plans for casino gambling in Taiwan. In the aftermath of the vote, political leaders from other offshore islands, including Taitung County's Lanyu and Pingtung County's Liukiu Archipelago, have already said their citizens do not welcome gambling, and leaders from islands that may be favorable, such as Green Island and Kinmen, have indicated they have no plans to hold a referendum on the issue anytime soon. End comment. STANTON