Casino hypocrisy

Editorial-December 21, 2013

We are sorry to say that the government has been less than transparent about its plans on the mega casinos that, despite all opposition from well-intentioned religious leaders and social activists as well as not so well-intentioned opposition politicians, appear to be going through. A few days ago the Ministry of Investment Promotions published some gazette notices on three mega-projects under the Strategic Development Act entailing investment of US dollars 1.2 billion which is certainly not small change. These so-called mixed development projects include five star hotels, shopping complexes and a convention center. There is no mention of gaming or casinos anywhere in the gazette.

It will be only the very naïve who will believe that plans to make Sri Lanka a high-end gaming center to attract particularly gamblers from India and China have been laid to rest as Deputy Investment Minister Faizer Mustapha appeared to suggest when he was quoted in the press as saying that these `mixed’ projects are not for casinos. However it must be said in fairness that he had also mentioned that casinos are already in operation under the Betting and Gaming Levy Act of 2010 and that casino operations has nothing to do with the mixed development activities. But he has not thought fit to reveal that some casinos will be located within so-called these mixed development projects.

John Keells Holdings, the country’s biggest market capitalized business conglomerates, is one of the private sector investors which, through its Waterfront Development Project, plans to let out space for a world class gaming facility. JKH is clearly on record saying it does not intend running casinos not having either experience or expertise in such businesses. Its plan is to let out luxury space in the new development to a reputed international casino operator. Tuesday’s publication of the gazette notices as well as the deputy minister’s statements on the subject had not in any way dampened the appetite for JKH shares on the Colombo bourse. In fact the counter, as well as attached warrants, is the most sought on the CSE and their prices have been rising. All this indicates that hardnosed investors are quite confident that JKH’s Waterfront Project for which the company’s former Glennie Street headquarters as well as Slave Island property belonging to its subsidiary, Ceylon Cold Stores, have already been demolished will proceed as planned.

President Mahinda Rajapaksa is on public record saying that no new casino licences will be issued. There are five existing licences. Mr. Dhammika Perera holds three of them and Mr. Ravi Wijeratne, with whom James Packer is tying up, owns the other two. What is intended is that these licences will cover gaming operations in new locations. Perera, once head of the BOI under the Rajapaksa administration and now Secretary to the Ministry of Transport despite his myriad of other businesses, is obviously a close associate of the government and its hierarchy. Everybody knows the connections. Perhaps less well known is that JKH will work/is working with Perera with regard to the casino to be located at the Waterfront Development Project. Ravi Wijeratne whom Packer is partnering has in recent newspaper interviews been very forthcoming about his own plans which include building a USD 450 million hotel on D.R. Wijewardene Mawatha land (in front of Lake House) that he already owns. He says that a casino will be run in the hotel with his existing licence.

The public are not likely to take the UNP’s professed opposition to casinos very seriously. Everybody knows that during the UNP’s dispensation several casinos were run in Colombo including in existing five-star hotels which were in bad shape at that time with the war keeping tourists out of the country. Joe Sim was a familiar name in Colombo circles in those days. President Premadasa got rid of him for whatever reason but there is no bar to his returning here. The reality is that massive investments are being made building new hotels as well as refurbishing and expanding existing properties. We have to substantially increase tourist arrivals into the country to ensure that the hotels have sufficient custom to keep them viable. Senior Minister Sarath Amunugama, who is also deputy finance minister, is the only politician that we can think of who has had the spine to call a spade a spade. He said in a recent speech that we can’t expect to grow our tourist industry by bringing foreign visitors here and showing them a few elephants. That is the reality.

Gambling in many forms has been deeply entrenched in this country over a long period of time. There is no escaping the fact that casinos attract other vices like prostitution. Although they are less visible today, a lot of young women of Chinese, Russian and East European origin were a familiar sight around the various casinos already in operation in the country especially late in the night and in the small hours of the morning. The authorities have clearly been ambivalent about this problem, sometimes rounding up the girls but more often ignoring them. Girls such as these will flock wherever high rollers go and we have no doubt that such services are available in other countries of the region where there are big gaming operations. If we develop a gaming industry, and there is good reason to believe that we are moving in that direction despite amateurish efforts to pretend otherwise (till the Provincial Council elections are over?), that is a problem that will be very with us on a scale far bigger than we have hitherto known.

We are too well aware that although the casinos at present are largely, if not exclusively, restricted to Colombo, the bookies or ``turf accountants’’ as they sometimes like to call themselves, are everywhere. Betting on the English races has developed into a major industry today. One of the biggest bookies is a Member of Parliament from the government party. He was a backer of the UNP once upon a time and switched horses shortly before Mahinda Rajapaksa was first elected president. People have ruined themselves by betting on horse racing and the once prohibited race cards are everywhere, easily accessible even to teenagers. The Donovan Andrees and the Mubarak Thahas of yesteryear have been replaced by others who have been bestowed national honours and elected to Parliament. Dr. N.M. Perera as finance minister moved to tax the bookmaking industry and the police stopped harassing the so-called `bucket shop’ keepers. Hopefully, the government gets its fair share of revenue from this activity as well as existing casinos.

Given the investment already poured into the tourism industry, we have to ensure high occupancy of hotels already built and those in the pipeline. It seems to us that the casinos are necessary vice for this. It is time that we took a practical view of the situation and the veneer of hypocrisy that surrounds it is shorn off. But there must be a tight regulatory regime – an area in which Sri Lanka has seen far too many failures. State revenues from such activities must be maximized without cronies being given sweetheart deals and the obvious harm that such less than desirable activities inevitably bring in their wake minimized as far as humanly possible.