Samoa may reopen casino process after China bid falters

(Photo: REUTERS / Chip East)Samoa's Prime Minister Tuilaepa Sailele Malielegaoi speaks during the Millennium Development Goals Summit at the United Nations headquarters in New York September 20, 2010.

CANBERRA (Reuters) - The tiny South Pacific nation of Samoa could reopen the bidding for a casino licence, a move likely to upset religious leaders, after halting talks with a Chinese tourism group that is facing allegations of corruption.

China's Exhibitions Tourism Group (ETG) had planned to build a 500-room hotel and casino in the cash-strapped country of 190,000, which is heavily reliant on foreign aid and money sent home from citizens working overseas.

The plan hit a snag when ETG's chairman, Deng Hong, came under investigation for corruption by Chinese Communist Party officials over land deals in mainland China, according to Chinese and Samoan media reports.

The Samoan government withdrew the licence earlier in August.

"We need to make a decision about whether we go back to market for the licence or whether we just continue on with one license given to a local firm," Samoa Gambling Control Authority chief executive Robbie Kearney told Reuters.

"We may want to go back to market straight away."

The government passed laws in 2010 for two casino licences, including one for Samoan hotel firm Aggie Grey's, as a way to help recover from a 2009 tsunami that wiped 30 percent off the country's economy.

Samoa was also hit by cyclone in 2012 and a drop in tourism in the wake of the 2008 global financial crunch. Its economy was worth $677 million in 2012.

Religious leaders and opposition lawmakers have warned casinos will cause social problems in the conservative Christian-dominated country, which moved the international dateline east to align its time zone with the bigger economies of Australia and New Zealand in 2011.

Under the ETG licence, 15 percent of gaming revenue was to be paid to the government on top of a licence fee of $150,000, as well as open the way for direct flights from China to Samoa.

(Reporting by Rob Taylor; Editing by Paul Tait)