The vote took place on Saturday.
Among the total population of 29,029 eligible voters on the outlying island group, 2,705 voters were in favor of casinos, with 24,368 against the proposal, Focus Taiwan reported.
The referendum was initiated by Kinmen County Councilor Tsai Chun-sheng in June, after collecting 5,602 valid signatures, exceeding the 5,178 needed to instigate a referendum.
Over the years, Kinmel has become a tourist attraction, especially for mainland visitors. However, the island has seen a drop in Chinese tourists leading Tsai Chun-sheng to bring to the table the casino debate in a move to boost the economy.
“Kinmen should develop its own industry. I don’t want our people to leave their home to become labourers elsewhere. It’s not good to leave your family here and find work away from home,” Tsai had said ahead of the vote.