International edition
September 20, 2021

Some 56 % of residents voted against casinos in Penghu

Gambling stocks fall in Taiwan after casinos nixed

(Taiwan).- After Taiwanese citizens voted against allowing the country's first casinos in the offshore islands of Penghu, shares of gambling stocks Astro Corp. and Firich Enterprises Co. fell in Taipei trading on the news.

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stro, a software maker for arcade game machines, lost 7 % to us$ 52.5, the most since June 15, at the close on the Taiwan Stock Exchange. Firich Enterprises, a point-of-sale terminal maker that invested in a lottery business, slid 6.9 % to us$ 55.9, also the most since June 15. The benchmark Taiex index declined 0.8 %.

Some 56 % of residents voted against a plan to allow casinos on Penghu, the local government said in a press release September 26. The poll may delay developers’ plans until at least 2012, when the law will allow a repeat referendum. AMZ Holdings Plc owns 11 hectares of land on Penghu and had planned to bid for a license as soon as the government sets up a regulator and gaming guidelines, the company said in January.

“Investors are disappointed with the result,” Andy Wei, who helps manage the equivalent of us$ 3.1 billion at PCA Securities Investment Trust Co., said in an interview today. “If it were passed, there could be a lot of business opportunities and may result in new gambling-related companies. We are now back to square one.”

Taiwan legalized casinos in January on its outlying islands of Kinmen, Matsu and Penghu, pending approval in a referendum by residents. The government aims to boost tourism and lure gamblers from Macau as a global recession cuts into earnings from exports and slows domestic consumption. Casinos remain banned on the main island.

“You have to wait three years to get Penghu to go through another referendum, but you do have other outlying islands such as Kinmen which is only 7 kilometers off the coast of mainland China,” said Sean Monaghan, an independent business consultant and gaming analyst on Bloomberg Television. “You’ve really got to expect the government to put in a lot more hard work in planning and communicating potential regulations. There is still an awful lot unknown for everyone.”

Casino operators including Las Vegas Sands Corp. are building gaming resorts in Asian cities such as Macau and Singapore, helping to boost the number of visitors and draw conventions and similar events.

AMZ said in January it plans to invest as much as us$ 300 million to build a five-star, 500-room resort on Penghu in order to win a casino license. Taiwan’s economy will probably contract 3.52 % this quarter after the economy slipped into its first recession since 2001. The island’s jobless rate climbed a 12th straight month to a record high of 6.07 % in August.

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