Embassy says Jamaica casinos were a done deal before 2007 poll

Makes you wonder!


Embassy says Jamaica casinos were a done deal before 2007 poll

With reports now surfacing of an anonymous email sent to the contractor general questioning the process surrounding the awarding of two provisional casino licences, the US Embassy cables acquired by The Gleaner through WikiLeaks give an initial response from the Americans. The cable, dated April 24, 2008, has been edited for length and libel.


UNCLAS SECTION 01 OF 02 KINGSTON 000354

SUBJECT: JAMAICA: PM GOLDING GAMBLES ON CASINOS AS PART OF IMPRESSIVE BUDGET PRESENTATION

SUMMARY

1. Despite strong opposition from the powerful church lobby, Jamaica's Prime Minister Bruce Golding has announced his government's decision to issue two casino licences.

The conditional licences will be issued to real estate projects by Celebration Jamaica (Palmyra Resort) and Tavistock Group (Harmony Cove).

As part of the agreement, both groups will be required to invest a minimum of US$1.5 billion and build at least 1,000 rooms.

Taxes generated from the industry will be used to fund the country's enormous social deficit.

End Summary.

Vegas on the north coast?

2. After years of robust opposition from Jamaica's influential church lobby, Golding took the bold step of legalising casinos. The decision to revisit the introduction of casino gaming came out of the review of a report prepared in consultation with PricewaterhouseCoopers in Canada, which concluded that casinos could be a vibrant industry for Jamaica and result in significant new employment opportunities.

But gambling is not new

3. Although bringing full-service casinos to the island has always been a lightning rod issue, in reality, gambling has become commonplace for many Jamaicans.

There are horse-racing events at least twice per week, a national lottery, and numerous slot machine establishments on the island.

Golding highlighted this fact in his speech, arguing that the country has tiptoed around the issue, not wanting to be embroiled in the controversy.

He pointed out that in the 1990s, the previous government had started issuing licences for the operation of slot machines, leading to several gaming lounges and hundreds of slot machines in operation throughout Jamaica.

To make matters worse, in 2006, the previous government had entered into an agreement with the private equity group Tavistock for the development of the Harmony Cove project, which was subject to the issuance of a casino gaming licence.

Jobs, jobs, and more jobs ...

4. The decision to bring major casinos to the island was not surprising, given that then shadow Finance Minister Audley Shaw told (embassy officials) in August 2007 that casino gaming would be introduced irrespective of which party was elected.

Members of the Harmony Cove Board told (embassy officials) casinos were "a done deal".

Minister of Tourism Edmund Bartlett has used the last four months promoting gambling as a way to expand the tourism sector.

The most important factor leading to the approval of casinos is that the Jamaica Labour Party (JLP)-led Government is coming under increasing pressure to deliver on its promise to provide "jobs, jobs, and more jobs". In this regard, the Government has approved proposals from the developers of the Palmyra Resort and Spa, operating as Celebration Jamaica Limited, for a 2,080-room hotel at a cost of US$1.8 billion.

As part of its casino licence, Tavistock also has agreed to increase the size of its project from 4,500 rooms to 8,500, with an additional investment of US$1-US$2 billion. With each hotel room requiring two workers, these two investments are expected to employ over 20,000 people.


Comment

8. (SBU) From all indications, Golding's maiden Budget presentation appears to have been well received among Jamaicans. Most analysts are suggesting that he demonstrated a good command of his areas of responsibility.

This is not surprising, given that he started preparing for this moment almost 36 years ago.

Performance aside, the decision to introduce casino gaming is fraught with political danger, given the influence of the Church, and must have been a delicate balancing act between economics and politics.

The fact that the decision was taken so early in the administration allows the Government some time to point to any economic expansion that follows before facing elections.

End comment