Mar. 9, 2008 - Taiwan's presidential campaign has revived discussion about legalizing casinos on the island, which is good news for Larry Woolf and his Las Vegas-based Navegante casino management team.

Woolf, a longtime Las Vegas gaming executive, spent the past three years piecing together a 27-acre beachfront parcel on Taiwan's island of Penghu for a potential hotel, casino and resort development. His patience may be close to paying off.

Gaming opportunities in Taiwan were all but dead in December when the national legislature didn't pass a measure that would have legalized casinos. The issue gained new life last month when Taiwan's two major presidential candidates both said they would support passage of a gaming bill.

Gaming analysts have said Taiwan is one of several Asian markets looking at gaming as a way to expand their tourism and economic bases. Many countries have looked at Macau with envy. Gaming revenues last year surpassed $10.3 billion in the Chinese gaming enclave and more than 27 million people traveled into the market.

Two large resort and entertainment developments are under construction in Singapore. Casinos are a part of the attractions.

Jonathan Galaviz, a partner in Las Vegas-based Globalysis, which consults with businesses on tourism-related issues around the world, suspected Taiwan would follow the Singapore example.

"If Taiwan does legalize casino gaming, it should only be done in the context of large-scale multibillion-dollar integrated resort developments where casino gaming is just one component of a larger entertainment offering," Galaviz said. "Taiwan, like many other countries in Asia, sees tourism visitation enhancement as an important component of its future economic growth profile."

Woolf believes the site he controls with Amazing Holdings, a land-development company registered in the Isle of Man and traded publicly on the Alternative Investment Market of the London Stock Exchange, is the country's most viable gaming opportunity.

"We're betting that our site is strategically the best located opportunity," Woolf said. "We own the land free and clear, it's one of the largest commercial sites on the island and it's the most likely place where the government would want to locate casinos."

Initial plans call for a 600-room hotel with a 130,000-square-foot casino. Amazing Holdings Chief Operating Officer Carl Burger said the site, which has roughly 250 feet of beach frontage, could be configured to include two or three resorts.

Woolf is a director and chief executive officer of Amazing. Navegante, which Woolf founded in 1995, would manage the casino for Amazing. The company now operates gaming at the Sahara, Casino Fandango in Carson City and several downtown Las Vegas and Elko casinos. Previously, Navegante managed casinos in Canada.

Burger said Penghu Island has its own airport, a well-designed highway system and is roughly 500 miles from Macau. He said the land accumulation, which encompassed more than 100 different parcels through deals with some 287 different owners, was essential.

"We've put ourselves in position to take advantage when gaming is legalized," Burger said. "The whole island is very unspoiled and we have the best location."

Deutsche Bank gaming analyst Bill Lerner said the Woolf contingent seems to have done the most work to prepare for gaming in Taiwan. He said it makes sense for Taiwan to proceed with gambling, based on the success in Macau and the expected lucrativeness of Singapore.

"There's a lot of work still to be done, but the question will be how many licenses are out there," Lerner said. "If (Amazing) is the only site to be licensed, then they are in great shape."

How gaming will be handled in Taiwan remains unclear. The presidential candidates from the Democratic Progressive Party and the opposition Chinese Nationalist Party, also known as Kuomintang, both said during a televised debate that they would favor legalizing casinos in Taiwan. Neither candidate offered much in the way of specifics, such as how many casinos and their locations. The election is scheduled for March 22.

Woolf hopes the tax rate on revenues would be somewhere south of what casinos pay in Macau (39 percent) and closer to Singapore's expected rate (15 percent to 18 percent).

Burger thought the large American gaming companies now operating in Macau -- Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Mirage -- would also have an interest in Taiwan.

"Macau is maxed out and Singapore has already decided their two licenses," Burger said. "The big boys are looking at Japan and Korea. Taiwan is sort of an undiscovered option."

Lerner said the current Macau gaming licensees may run into a problem with the Chinese government if they look at expanding into Taiwan. Relations between the two governments are often contentious.

According to the nonpartisan Council on Foreign Relations, China and Taiwan maintain a fragile "status quo" relationship in which the island has operated separate and sovereign from the Communist mainland since 1949.

"The big question is if there would be political repercussions for Sands, Wynn and MGM," Lerner said. "If gaming expands into Taiwan, I think it would be good for the region, but I don't think it would be considered too much of a challenge to Macau."

Galaviz said there is still much to be decided before the first card is dealt in Taiwan. Although the presidential candidates support gaming, the jury is still out on whether or not the legislative branch will endorse casinos. In addition, the establishment of a regulatory system is just one component in an array of matters that will need to be addressed.

"One of the most critical issues that the Las Vegas-based gaming companies will be looking at is whether or not Taiwan would allow its own citizens to have access to the casino gaming facilities," Galaviz said. "Various areas of Taiwan, in addition to the island of Penghu, should be equally considered as possible areas in which tourism-driven integrated casino-resort development can take place."

Still, Woolf said prospects for casinos in Taiwan seemed better in February than they did at the end of 2007.

"I'm betting this will be a priority bill that the Taiwan legislature will act upon this year," Woolf said. "We came close last session. When both presidential candidates said they were in favor of gaming, that was good news."

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