The Casino conundrum

This is an issue that refuses to go away.

In 2000 Zublin Grenada Ltd was established setting the stage for a long and acrimonious national debate recently reignited with pronouncements by the new Mitchell administration.

Hendrik Van Dijk was CEO of Zublin, a Switzerland-based multinational construction company negotiating a multimillion-dollar port development project in Grenada.

The trouble started when Zublin insisted on including a casino component for signing off the deal. This became a highly controversial issue polarising Grenadians into contentious factions holding diametrically opposed positions, some absolutes with no room for compromise.

The sanctimonious and sacrosanct Church faction condemns casino and casino gambling as morally wrong and anathema to the norms and values of our Christian society. Hypocritically, the Church fails to practice what it preaches as it regularly holds fund-raising bingos. Yet it lobbies unrelentingly to remove the casino initiative from the national development agenda.

Prime Minister Thomas spearheaded the anti-casino assault with rhetoric like “not under my watch” although it was government that institutionalised national gambling with the state-owned National Lottery Authority. It was even alleged that secret documents revealed agreements made by the Thomas administration for inshore casino gambling on cruise ships. Hence, on the gambling issue the double standards of Church and State are simply mind-boggling.

On the opposite extreme, secular pragmatists and realists see nothing wrong with casino establishments contributing to economic development in these difficult times. They subscribe to the philosophy that drastic problems require drastic solutions and surmise that benefits would far outweigh costs. They further argue that the economic impact of a casino is quantifiable in monetary terms but its qualitative social cost is just subjective feelings and guesstimates.

Government is center of the polemics between secular and religious influences and facing a policy dilemma. On one side are spiritual sectarian interests, on the other the material fiduciary responsibility of government to the people.

The new administration was elected with the promise “we will deliver” and constituencies demand concrete action. However, with cozy collaboration between Church and State on critical fiscal/debt matters gaining momentum, government is caught between “a rock and a hard place” on the casino issue with nowhere to run.

Proprietors like to call their institution “Casino Gaming and Leisure Establishment” downplaying the gambling stigma associated with casinos. Casino activities are off-limit to locals and focus internet gaming, lottery, and poker, and winners are awarded value instruments like chips, reward cards, and machine credits.

They came to the Caribbean in the twenties with Bahamas “grandfather” of them all. In recent decades the regional industry has grown phenomenally establishing over 166 casino resorts in Spanish, French, Dutch, and the Anglophone islands of Antigua, Barbados, St Kitts, St Lucia, St Vincent, and Trinidad/Tobago. Big names include Sandals Grande/Antigua, Atlantis Paradise/Nassau, Ritz-Carlton/Puerto Rico, Casa Blanca/TCI, and Acropolis/Jamaica.

Something is fueling the casino attraction to Caribbean destinations and it is not the glitz and glamour and neon lights. Caribbean countries are largely monoculture, tourism-dependent economies and ECLAC 2011 statistics show tourism revenue averaging 30% GDP in some islands.

During the seventies Grenada once recorded 46% foreign exchange earnings from tourism. Hence, casino establishments are excellent options for portfolio diversification that fast track revenue generation. Overtime, the casino becomes a complementary asset, indispensible to the tourism product, and a critical strategic catalyst for growth. The new innovation adds value to a highly competitive industry becoming increasingly flexible and dynamic to survive.

Economic initiatives are evaluated objectively free from personal feelings, subjective value judgments, and the moralising demagoguery of a few. Sound economic rationale is not based on religious pontification. We “give to Caesar what is Caesar’s” by the constitutional separation of Church and State.

Industry analysts determine the economic viability of a casino investment on key success factors. First, as a cash-intensive industry with high-volume financial flows, the establishment accords with FATF (Financial Action Task Force) principles as a de facto financial institution applying efficient, transparent revenue accounting for taxation purposes.

Secondly, a flexible regulatory mechanism is equipped with professional manpower capacity trained to strike the right balance between entertainment and law. And, importantly, the facility is geographically isolated to generate periphery spinoffs in economic activities like guest houses, restaurants, and agriculture; and community infrastructure upkeep is mandatory.

Hence, a framework is established to boost tourist arrivals, tax revenue, retail sales, employment, and income generation. With systems of control monitoring operations with proper checks and balances it is a win-win situation for all stakeholders. The multiplier effect is economic growth and development for the whole country.

However, the dark side of casino operations requires constant vigilance. Casinos are vulnerable to criminal infiltration through money laundering, wire frauds, and scams. Organised crime exploits loopholes in the system and high-net-worth clientele engage in cross-border funds transfer and money remittances of questionable origins. These challenges keep the Financial Intelligence Unit (FIU), law enforcement, and regulators constantly alert.

We revisit the casino issue with everything on the table.

Jay Bruno

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