Casino jobs may come with a heavy price

Caution: Casino jobs may come with a heavy price

DIANE ABBOTT
Sunday, March 16, 2014

Casinos bring jobs, but they can also bring problems.


THESE are perilous times as the world recovers from a global economic crisis. The moreso for a small island state like Jamaica. So it is no surprise that Jamaican politicians are poised to give the go-ahead to a mega Las Vegas-style entertainment complex. It represents a US$450-million investment.

When completed, the complex will consist of 2,000 rooms, a state-of-the-art entertainment complex, bars, restaurants, health club, retail space, and a full-service casino with table gaming and slot machines. Above all, it will create jobs — 1,000 in the construction phase, 4,000 full-time workers, and 16,000 ancillary.

The prospect of all those jobs must be almost irresistible to Jamaican politicians. However, they will have to be careful that Jamaicans are not just relegated to the 'ancillary roles', but can also get trained for the highly skilled roles like croupiers.

But if casinos bring jobs, they can also bring problems. British politicians and law enforcement agencies were notoriously wary of casino gambling. They knew of its associations with the Mafia in the United States. For years British casinos were small, tightly regulated, and admitted only members. More recently, gambling was deregulated and the Government proposed introducing Las Vegas-style mega casinos into urban centres like Manchester.

But there was such a public outcry that they had to shelve the idea. The British like visiting Las Vegas. They don't want it on their own soil.

Even in America, until the 1980s casinos were legal only in Nevada (Las Vegas) and Atlantic City.

And Americans were only too well aware of the problems associated with casinos. These include drug abuse, mental illness, suicide, violent crime, car theft, larceny, and bankruptcy. The latter three all increased by 10 per cent in communities that allowed gambling.

But the major problem associated with casinos is organised crime. Everyone knows about the relationship between the Mafia and Las Vegas in Nevada. So, unsurprisingly, Nevada ranked first in crime rates among the 50 states in both 1995 and 1996 (based on an analysis of FBI Uniform Crime Report statistics).

Further, the violent crime rate in Nevada increased by close to 40 per cent from 1991 to 1996, a period in which the national violent crime rate dropped by approximately 10 per cent. In Atlantic City, the total number of crimes within a 30-mile radius increased by 107 per cent in the nine years following the introduction of casinos.

Yet despite the obvious problems, gambling interests put big pressure on US politicians, and casinos spread all over the United States. The associated criminality spread too. US News & World Report analysis found crime rates in casino communities to be 84 per cent higher than the national average.

Further, while crime rates nationally dropped by two per cent in 1994, the 31 localities that introduced casinos in 1993 saw an increase in crime of 7.7 per cent the following year.

Yet another problem associated with casino gambling is political corruption. American research revealed that the gambling industry was attracted to states with an existing "culture of corruption". It was noteworthy that corruption convictions increased both before and after casino gambling was legalised in other states.

There was a pattern of "regulatory capture" where regulations were almost invariably relaxed after the casinos opened their doors. Researchers also found that four out of five states with the highest annual rates of public corruption were casino states.

Nobody doubts that casinos bring jobs. But there could be a price to pay. No doubt Jamaican politicians believe that the political culture and Jamaica's law enforcement agencies are robust enough to deal with the wave of opportunities for crime and corruption that casino gambling will bring. We will see.

— Diane Abbott is the British Labour party MP for Hackney North and Stoke Newington
www.dianeabbott.org.uk


http://www.jamaicaobserver.com/columns/Caution--Casino-jobs-may-come-with-a-heavy-price_16269695

 

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