UPDATE 1-Taiwan parliament OKs gaming on offshore islands

(Adds details, quotes, background)

By Ralph Jennings

TAIPEI Jan 12 (Reuters) - Taiwan's parliament voted to legalise gambling on offshore islands on Monday, joining a growing number of Asian markets seeking to boost tourism and speed economic development.

The move paves the way for the economically depressed Penghu archipelago in the Taiwan Strait, until recently one of the hottest potential flashpoints in Asia, to go ahead with planning for three giant casino-resorts.

Passage of the bill, despite protests from religious groups and opposition legislators, could give the archipelago a chance to compete eventually with other East Asia gaming hotspots such as Macau and South Korea, and upcoming casinos in Singapore.

Legislation to legalise gambling has been talked about for years and received a boost from the administration of President Ma Ying-jeou, which took office in May and must sign the bill before it takes effect.

"We've wanted to stimulate development of the offshore islands, particularly tourism," said Chang Sho-wen, an official in the parliament's ruling Nationalist Party (KMT) caucus.

Taiwan is hoping to stimulate the kind of growth seen in other places that have legalised or expanded gaming, most notably Macau. But such growth could be hard to replicate due to the relative remoteness and lack of facilities in Penghu.

China has claimed sovereignty over self-ruled Taiwan since the end of the Chinese civil war in 1949. It has vowed to bring the island under mainland rule, by force if necessary, but ties have improved greatly in recent months since the election of China-friendly Ma.

Since opening up to outside operators in 2002, Macau, a former Portuguese-run enclave which returned to Chinese rule in 1999, has seen its economy boom as global giants such as MGM Mirage, Las Vegas Sands and Wynn Resorts set up casinos.

Macau was on track to record $14 billion in casino revenue last year, but construction of new casinos and plush hotels is slowing around the world as the global financial crisis leaves developers short of funds and reduces gaming revenues.

British AMZ Holdings, one of three operators looking at Penghu sites, hopes to put Penghu on the Asian casino map.

AMZ wants to build as many as 500 rooms on a now barren 11-hectare coastal tract, spending $200 million on construction and partnering with one of the world's top five casinos, the firm's Taiwan president Ashley Hines has said.

"They'll want more than a casino, which is where the idea of an integrated resort comes in," said AMZ Vice President Carl Burger. "It's been a long process and a labour of love."

Penghu, which has a population of 90,000, has passed two referenda in support of gaming as economic boosters edged out religious groups and citizens fearful of increased crime. It must pass one more before local authorities can issue casino permits.

(Reporting by Ralph Jennings; Editing by Kim Coghill)