Tycoons eye Hainan gambling bonanza

Chinese property tycoons have been investing in Hainan island in the hope the government will eventually allow gaming there, Bloomberg reports.

In an interview, Zeng Xianyun told the agency that he is hoping China will legalize the gaming industry to help reduce capital outflows from the country.

“We need to take the issue seriously instead of avoiding it,” said Zeng, who is chairman of Phoenix Island, an artificial archipelago off Hainan’s southeastern shore that has a cruise ship terminal, luxury hotels and apartments. “We can’t let this big cake be eaten all by foreign capital,” he was cited as saying.

Zeng’s development was built with a total investment of 20 billion yuan ($3.1 billion), of which he put up 45 per cent and another 45 percent came from the state-owned infrastructure firm China Communications Construction, the report said.

Chinese President Xi Jinping is scheduled to visit the island this week, with the local business community hopeful he may announce incentives to boost business and attract more tourism, including potential tax concessions.

Although Xi is unlikely to make any announcement on legalizing casinos, the drumbeat calling for legal gaming on the island has been growing louder.

According to Bloomberg, Hainan’s government has commissioned a group of eight scholars to study how to develop gambling tourism there – and how to legalise gambling in China. One member of the group, Associate Professor Pei Guangyi at the School of Economics and Management at Hainan Normal University, published a paper in March arguing that China should legalise gaming to reduce capital outflows through foreign casinos and introduce a body of regulations.
“Since you can’t stop Chinese people from gambling, it is a better solution to make sure that foreign or private capital do not overly profit from it,” he said.

Zeng said he could open a casino in under 30 days if given the permission.