You are in:
Big Plans for Amazing Holdings
Amazing Holdings are a company with ambition. They have bought a plot of land on the Taiwanese island of Penghu. At present there is no provision for legal gambling there, but Ian Irvin, Executive Director, and Ashley Hines, Chairman, are optimistic that their ultimate plan of a gaming resort can be realised.
The Taiwan government is is in a state of flux and, as with most Asian countries, the possible extra revenue from legalised gaming is being seriously considered. Gaming happens everywhere in the world; now governments are seeing the benefits of a long-term view and controlling gambling and gaming. In Asia especially, the potential extra revenue for the government in the form of taxes is enormous. The Taiwanese government only need to look across the water to China and see what has happened in Macau to see the potential.
Of course, Taiwan does not have the same domestic potential as China, with just under 23million residents compared to China’s 1.3billion and counting.
The company’s plans are the result of many years of work to simply secure the land and their development will go ahead simply as a resort on a near-unspoiled island if gambling is not legalised. Chances are, it will be though, and these guys will be the first off the blocks in a completely fresh market for gaming.
Jon Bruford met with Ashley and Ian to find out more.
Casino International: You’re planning a major development on a Taiwan island – could you expand on that, please?
Ian Irvin: Well the long and the short of it is we are intending to do a high quality casino resort in the Penghu Islands, Taiwan. The Penghu islands are the best kept secret in Asia. It’s a beautiful group of islands in the South China Seas parked off Taiwan, and he who has the Penghu islands controls the Taiwan Straits. So strategically they’re very important for the Taiwanese as a result of which the Taiwanese military presence which was there resulted in a very, very good infrastructure.
Tim Porter, my colleague, and I co-founded the company a good number of years ago now, we had been looking at various opportunities in Taiwan. We initially saw in the islands the prospect of building a high quality resort hotel and if you were the first international company to build a resort hotel you’re sort of setting a benchmark for others to follow. So that was the initial intention and we identified four or five sites where you could build such a hotel, which were good one of which was particularly good. The one which was particularly good was on the Fon Quoi peninsula beside Fon Quoi village. The land in question was ancestral land belonging to the village and the land tenure system was sort of feudal in nature; you’d have like a strip of land to graze your cow and it would pass on to your family and so forth. As a result we ended up dealing with the village chief and the village elders with whom we closed the deal, hence the agreement to buy this land. It was agricultural land – in fact it was worthless agricultural land, but our deal was conditional on it being rezoned for a commercial use. But there were 300 different landlords by the time we got into this and it evolved to become the biggest land transaction in Taiwan, certainly the first for us or a non- Taiwanese entity. A short time later, I read a story in the press about how apparently legalised gaming was being considered in the area, which obviously made a very attractive proposition even more so. While all this was going on parallel with this we’d been having difficulties with financing the land purchase. Flat purchase was actually $7 million US, which included a measure of Government land. If you imagine the strips of land, there were little paths in between, and those paths were the government land.
Ashley Hines: In Taiwan, the support for gaming has been increasing and increasing. There were two referendums fairly recently, both of which returned about 60%+ from the local populace which were virtually in favour of gaming. Personally I’ve been monitoring legislation as it stands on whether they will support gaming or not. There is clearly a majority support for gaming, enabling gaming.
II: Regardless of what might happen in the immediate future for legalising gaming in Taiwan, there’s always the 2008 presidential elections, in which the Blues look like they’ll sweep the board. At the moment, there is some controversy and uncertainty in the country surrounding the president, and the gaming bill is being used for horse trading, for leverage, so the 2008 elections could be the key point for gaming in the country. One of the biggest criticisms of the current government is they’ve been playing the independence, anti- China card in the absence of any decent economic initiative. The economy is doing really badly; it’s stagnant basically, it’s been stagnant for the last two or three years. They don’t really have any, if you like, electoral platform on which to sell themselves to the electorate and they did actually come to power on a platform of being super-clean, anti-corrupt and that’s completely ridiculous now. The funny thing is, I mean, you’ll hear it said that people elected the DPP because they wanted to get rid of the KMT, now they’ve got a government that is more corrupt than the KMT was. I suppose that’s democracy for you. Especially in a young and immature democracy.
CI: So you’ve taken your idea, your development to people in Vegas and said ‘This is what we’re doing.’
II: The position with the guys in Vegas with regard to gaming is very simple. The gaming industry is the most conservative industry I’ve ever come across, which is slightly perverse given they make their money through gambling but if you want to have a gaming license, that’s where the standards are set, and we believe anything needed in Penghu will be to Nevada standard.
We’re sure we’ll gain a license because we are the only show in town.
Guys in Vegas would write you cheques for $20 million, they wouldn’t blink, but you try to put together seven or eight million dollars to finance a project with an opportunity – they won’t do it.
There’s also a measure of arrogance about it because the large gaming corporations, some of them are controlled by a small number of people and they believe rightly or wrongly they have a really good product, and when we secure a license we’re going to go and talk to them anyway so why should they chase us. So of course that’s all fine and dandy – if you’re in a monopolistic situation, which is not the case. There’s half a dozen major gaming corporations that equally have that psyche so you play one off against the other potentially. I think from our standpoint though within Taiwan, notwithstanding gaming, there is a market for a very high quality product, hotel product. One scenario that we are actively exploring is putting together a hotel development of sorts and attaching to it some sort of kind of shell or warehouse into which you could quickly move a casino. The argument says you just do nothing, just sit on your hands and wait, people knock on your door you sell out make a fast buck and away you go. But we are very committed to these islands very committed to ensuring that what will happen to these islands is correct and proper. Interesting thing about Macau and Singapore, it’s not actually who’s there but it’s who’s not there, and given the developments that are taking place there are some major corporations not in either location so where are they going to go? I think there is a large potential for us to have dialogue, it’s inevitable. It’s a question of when do you do it.
CI: So you think it has the potential to touch on what Macau has?
II: The problem you have with Macau, for me anyway, is it depends on which way the wind’s blowing whether you can see the sky because within 100km of Macau is most of the heavy industry in China. 60- 65% of the heavy industry is in the Pearl Delta which is just across the water from Macau.
AH: So you get all the pollution coming in and all the rest of it, it’s not….
CI: Very nice?
II: The resorts, the properties are very nice but you wouldn’t go there for a vacation, you are there to gamble, whereas Penghu is the start of something else entirely. This is a desirable location, oh and by the way you can gamble there or you’ll be able to gamble there. I think the analysis I can draw is with the Bahamas. People think of the Bahamas as a beautiful resort but you can also gamble there. In Las Vegas, you get the best shows in the whole US, the best restaurants in the whole United States, the best shopping is in Las Vegas, oh and by the way you can also gamble – there’s a lot more to Vegas, it’s a destination. There’s a more rounded development and that’s how we see things going in Penghu. Because it won’t just be us there’ll be others who’ll open casinos there. But that’s not the case in Macau, which is very much about gambling.
CI: In terms of traffic from China, which isn’t so far from Taiwan, is there any potential for that kind of traffic or would that be a problem with the Chinese government and visas?
II: From our standpoint, we don’t need China to make this into a success. One of the things that came out in Macau when the bids went out for the licenses was that you got market information. At the time that they were bidding for the licenses there was $2billion worth of wind being generated in Macau; at that time, Las Vegas was doing $6billion. Now Macau is outstripping Las Vegas, but that was the sort of ratio. What was interesting was that half the casino wind in Macau was attributable to Hong Kong residents. Hong Kong’s got a population of 6.5million and Taiwan’s got almost four times that. From Hong Kong to Macau by fast ferry is the same as the time from Taiwan to Penghu. The dynamic’s roughly similar, therefore you could look at a home market of potentially $3billion to maybe three times that. Plus you get the Japanese market because there’s a very close relationship between Taiwan and Japan. So notwithstanding China, there is a lot of market potential there. Having said that, by the end of 2006 the forecast for Chinese residents travelling overseas is to quadruple from four million in 2005 to 16million in 2006. By 2015, the World Tourism Organisation thinks it could rise to 100million. The head of the Chinese tourism agency was over in Taiwan recently to discuss this very issue which was loosening Chinese tourists’ visas to come over to Taiwan, so you have a catchment area of 350 million Chinese within a hour and a half of Penghu. Even though that isn’t the main market, if this liberalisation goes ahead unhindered there should be a virtually limitless market.
CI: What’s the actual size of the island your land is on?
II: It’s not as big as Macau; it’s like a big horseshoe. Driving from one end of the horseshoe to the other end takes about 35 minutes in a car on good roads, big dual lane roads, you know averaging 50km per hour. It’s a very much unknown area. Our favourite pub on the island in the middle of the Taiwan straits, got this great nightlife, got these fantastic pubs owned by people from Taiwan, you can get any drink in the middle of the Taiwan straits
AH: Tourism is growing but the main market at this point is Taiwanese, there’s quite a lot of Japanese tourists there. But there’s no Hiltons, Hyatts or Marriotts there, or anything like that.
II: And the tourism board is not selling the place because they don’t know how to.
AH: But within these islands, you could comfortably put maybe 20 resorts, 20 high quality international resorts without there being a strain on the infrastructure.
CI: So what’s the next step? Do you then start building with uncertainty, without knowing if or when it’s going to come? How do you move now?
II: Initially the next step for us, as we’ve said in our Mission Document, is to move forward with a development of sorts. We’ve got architects appointed in Las Vegas who are coming up with designs which would work for the site. I think it would be best all round if we could get moving with that project of some description. Apart from anything else it would look good in Taiwan if we’ve got diggers going round the site and we’ve got something going. I guess the gaming thing for us has moved from, ‘that sounds like a really good idea’ you know ‘that looks like it might happen, but let’s wait, you know, and see what the authorities do’ and then eventually you need a bit of a hand to start pulling it together and we start getting that little bit of assistance and then there’s a groundswell and then there’s momentum. And there’s enough people talking about it and slowly just chipping away at it fencing their idea into something that makes commercial sense that is realistic is sensible and is to a high international standard. And now it’s got momentum all of its own. So you’re dealing with a democracy, you’re dealing with politicians the only thing you can say in certainty is that you can’t say anything in certainty. It’s not ours to give, it’s theirs. But the balanced probability is that it is going to happen and it’s going to happen possibly at the end of this year. If it doesn’t happen at the end of this year it’ll happen next year, if it doesn’t happen next year it’ll definitely happen 2008.
