VZCZCXRO6712
PP RUEHCN RUEHGH RUEHVC
DE RUEHIN #1177/01 2720904
ZNR UUUUU ZZH
P 290904Z SEP 09
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 2404
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHBK/AMEMBASSY BANGKOK 4716
RUEHBY/AMEMBASSY CANBERRA 5242
RUEHHI/AMEMBASSY HANOI 0014
RUEHJA/AMEMBASSY JAKARTA 4525
RUEHKL/AMEMBASSY KUALA LUMPUR 4138
RUEHML/AMEMBASSY MANILA 0834
RUEHPF/AMEMBASSY PHNOM PENH 0790
RUEHGO/AMEMBASSY RANGOON 0575
RUEHUL/AMEMBASSY SEOUL 0282
RUEHGP/AMEMBASSY SINGAPORE 7658
RUEHKO/AMEMBASSY TOKYO 0814
RUEHVN/AMEMBASSY VIENTIANE 0227
RUEHWL/AMEMBASSY WELLINGTON 0061
RUEHCHI/AMCONSUL CHIANG MAI 0795
RUEHHM/AMCONSUL HO CHI MINH CITY 0661
RUEHJA/AMCONSUL SURABAYA 0125
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

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