Government Uncertainty Delays Taiwanese Casino Approval

As gathered from Taiwanese gambling news earlier this year, the country’s government has been dragging its collective feet with regards to proposed casino development in specially designated areas. Nevertheless, it now appears that some progress may in fact be taking place.

Considering that Taiwanese officials from various government departments met last week to debate the possible sources of tax revenues from future casinos, perhaps they are really serious about having those casinos built.

Although gambling in general is prohibited by Taiwanese gambling laws, casinos have been approved through a “backdoor solution”, by adding the possibility of casino construction in Kinmen, Matsu and Penghu to the Offshore Islands Development Act in 2009.

This amendment in question stipulates that more than half of local voters in any of these jurisdictions must approve such plans before casino development may commence.

Constituents in Matsu have since said yes to US investor William Weidner’s proposal, but final government approval has not been forthcoming due to the lack of some complementary laws that would need to be passed first.

Among those laws is the one dealing with gambling taxes.

Since Matsu has already been granted tax breaks, recent plans included slapping a 20% tax on casino winners. Proposed by the Ministry of Finance and opposed by the Ministry of Transportation and Communications, such a tax could threaten the feasibility of future casino plans by keeping tourists away from the new establishments.

If faced with the prospect of taxable winnings, visitors may just step ashore in Macau or Singapore instead, or simply stick to mobile casino gambling.

The example of South Korea, the only country in Asia to tax players, gives every reason to be cautious about such solutions. That country has 17 casinos, and altogether they generate a lower revenue than a single casino in Macau.

Although the meeting was inconclusive regarding this particular tax, the participants agreed on a 13% tax rate affecting investor revenues.