Taking a chance on casinos

Although the specifics haven’t been
announced, Premier McKeeva Bush has said he will put the issue of legalised
gambling in the Cayman Islands to a vote this fall.  Governor Duncan Taylor also spoke about a
vote “to give people a chance to reject or accept gaming as part of economic
development” in his Throne Speech in June.

Since that time, pundits on both sides of
the emotive issue have spoken about why they feel legalised gambling –
specifically in casinos – should or shouldn’t be allowed here.

For his part, Mr. Bush says the government
isn’t taking a public position on the issue one way or the other. Instead, he
says it will leave it to voters to decide. If and when a referendum or some
other kind of vote occurs on the gambling issue, it is a sure bet that the
debate beforehand will be intense.

The idea of legalised gambling in Cayman is
a divisive one. A poll conducted on the caycompass.com website in June showed a
slim majority of respondents in favour of casino gaming, although a little more
than a fifth of those people thought only visitors should be able to gamble in
the casinos. Forty-seven per cent of the respondents didn’t think there should
be casinos allowed in Cayman at all.

Two forms of gambling have been discussed
to this point: a national lottery and casinos. Those who advocate for a lottery
note that illegal numbers have been prevalent on Grand Cayman for at least 20
years.  However, given the administrative
costs of a lottery and Cayman’s small population, most people agree that the
only way a lottery could bring in significant revenue would be if it were
either actively marketed overseas or aligned with a regional lottery scheme.
Regardless, the lottery offers very little in terms of offshoot economic
benefits besides jobs for the administrators. Even if marketed overseas, the
lottery would not constitute a tourist attraction.

Casinos, on the other hand, could offer a
multitude of offshoot economic benefits and act as another tourist attraction
in Cayman.

The
case for casinos

Pro-casino advocates actually don’t like
the word ‘gambling’, instead preferring ‘gaming’, a term that better infers the
entertainment aspect of casinos.  A paper
prepared by Cayman businessman Kevin Doyle for the Cayman Islands Tourism
Association in March titled Entertainment Gaming in the Cayman Islands spoke
about how half of all revenues in Las Vegas are generated through selling the
entertainment appeal of the destination. 

“Foxwoods Resort Casino in Connecticut
attracts 50,000 daily visitors to its resort, of which an estimated 40,000
avail of its daily, non-gaming activities.”

Doyle’s paper talks about Cayman’s need to
broaden its revenue base and suggests casinos would be a good option.  Speaking about the paper, Doyle said casinos
could be a big boost for tourism.

“Our economy is in desperate need of
expanding the range of tourism products, and [casinos are] just one of many,
but probably the best in terms of job creation,” he said.

Ritz-Carlton, Grand Cayman developer Mike
Ryan believes casino gaming would be good for Cayman, but he cautions that expectations
should be realistic.

“Gaming is not a magic wand to fix all your
economic troubles,” he said. “But it is a useful amenity to expand your market
and offer an activity pretty much everyone we compete with has, or is bringing
in.”

Ryan said there is little for people over
25 years old to do at night in Cayman other than go to restaurants.

“If we really want to attract people, we
have to have something else to offer them.”

In addition to gaming, Ryan said, casinos
support other nightlife activities like performing artist shows, something that
would expand Cayman’s entertainment options.

Doyle believes casinos will draw tourists,
particularly from the US, to the Cayman Islands.

“Many Americans have to travel farther to
go to the casinos of Vegas or Atlantic City than if they were flying to
Cayman,” he said, noting that Cayman has the added amenities of year-round sun,
sea and beaches.

“The real key to having a successful casino
resort in Cayman is in significantly increasing the current size of the
airlift,” Doyle said. “If that can’t be accomplished, then a resort casino
cannot succeed, but if it can be accomplished, then the spin-off benefits for
the national airline, government, taxis, restaurants, etcetera, will be huge.”

Doyle also believes that having casinos in
Cayman could make the building of a much-needed convention centre feasible and
help improve occupancy numbers.

Another benefit of having casinos, pointed
out in Doyle’s submission to the Tourism Association, is that the operators
would conduct extensive additional advertising campaigns that would promote the
Cayman Islands as a tourism destination.

In addition, because there would be no
taxes on gambling winnings here, Doyle believes Cayman could attract “a lot of
wealthy players, including international tournament players”.

Other
benefits

Doyle’s submission to the Tourism
Association outlined several other benefits of having casinos in Cayman beyond
bringing in more tourists.  Among the
suggested benefits were: construction activities in building the casinos; a diverse
range of new employment opportunities at the casinos; more business for local
suppliers of goods and services; and revenues to government from fees charged
to the casinos.

As for employment, Doyle pointed out that
in the Bahamas, where residents are not allowed to gamble in the casinos but
are still allowed to work in them, about 15,000 Bahamians are employed in the
casino industry.  He said casinos here
could provide employment to a wide age spectrum of Caymanians.

Speaking about employment opportunities in
casinos, Doyle noted that there are “many similarities in the skill sets
required by trained workers in the banking and finance industry that could
easily be applied in gaming operations”.

“The casino floor is made up of dealers
employed as roulette, craps or card dealers,” he said. “These are all
well-trained positions which usually attract smart young people, good with
maths, accurate and reliable at counting, with the ability to work and focus
for long hours on both day and night shifts. The average age group is usually
below 30-35 with floor supervisors and pit managers tending to be upwards of
35, but unlikely to be over 55.”

Doyle said people older than 50 usually
found work in casinos as accountants, cashiers, security, cleaners and other
light-duty works. 

“However, if the casino is part of a resort
complex, then you are likely to find that the older age group are employed in
both part-time and full-time capacities in areas such as food and beverage,
housekeeping, gardening, and various aspects of administration – in fact the
same areas that they are employed in in any resort hotel.” 

The
churches speak out

Almost immediately after Premier Bush
mentioned the possibility of a vote on casino gambling and a lottery, the
Cayman Ministers’ Association launched in response a petition opposing gaming
in the Cayman Islands. The petition called for the affirmation of the laws
against gambling as they now stand.  The
petition claimed that promises made by the gambling industry to local business
and political leaders “fail to come to fruition” in community after community;
that local businesses suffer from gambling because discretionary dollars are
drained from the community; that gambling increases crime and is the
fastest-growing driver of bankruptcy; and that gambling is a way of practising
dishonesty because “it is a form of taking what does not rightfully belong to a
person”.

Launched on 16 May, the petition was
submitted to government in June.  According
to the Ministers’ Association president, the Reverend Robert Thompson, most of
the 1,400 signatures on the petition were obtained within two weeks of it
launching.  By comparison, a petition
launched by former Cabinet minister Gilbert McLean calling for a referendum on
the establishment of a national lottery gathered less than half that amount of
signatures over more than six months.

Mr. Thompson said the Ministers’
Association met to discuss the gambling issue in early July and that all of the
10 or so members in attendance were in agreement with an anti-gambling stance.

“I have received no representations from
anyone to the contrary,” he said. “I don’t know about other members who weren’t
there [at the meeting]”.

The United Church in Jamaica and the Cayman
Islands issued its own press release against gambling in June.

That press release, titled Dangers of
Permitting Gambling in the Cayman Islands, stated that the church was opposed
to gambling “principally because it is contrary to our Christian beliefs”.  The church said there was evidence that gambling
led “to a deterioration of the social fabric as it exploits human weaknesses,
undermines work ethic, leads to increased crime, is destructive of family life
and promotes personal and institutional greed.

“It exploits the most vulnerable in society
and represents a major transfer of resources from the very poor to the very
rich,” the release stated.

The United Church said it understood that
the Cayman Islands Government needed to broaden its revenue base, but that it
had always found ways to keep the country prosperous without legalised gambling
and it could do so again.

The press release spoke at length, but
generally, about gambling increasing crime, something it said “statistics from
around the world would substantiate”. No specific statistics were cited,
however.

“The major reason for gamblers to commit
crimes is to fund their gambling activities,” the press release stated.
“Gambling crime includes theft, forgery, embezzlement, fraud, It can also
include domestic violence, assault, child neglect, suicide, prostitution, vandalism,
breaking and entering, and home invasion.”

The church mentioned the Mafia and said
casinos were particularly attractive to organised crime, presenting “ideal
opportunities” for profit skimming, money laundering, loansharking and
prostitution.

The release refuted claims of employment
benefits created by casinos, citing unspecified reports from the US of “grave
economic difficulties” faced by many employees of casinos.

“We certainly cannot afford to have any
more people in Cayman being employed in poverty-creating jobs,” it stated.

The church also questioned the impact of
casinos on tourism, noting that gambling was already readily available in the
US and in neighbouring islands.

“Certainly, it seems basic to ask how will
gambling differentiate our tourism product from that of our competitors where
it is already available.

Although the Ministers’ Association has not
yet put out its own position statement on gambling, Mr. Thompson said it would
probably do so in September. That statement will likely follow closely the
sentiments of the United Church.

“We are in full agreement with their
stance,” Mr. Thompson said.

Gambling
and crime

Most anti-gambling arguments claim crime
results from legalised gambling. 
Pro-gambling advocates often state that legalised gambling can reduce
crime because it makes illegal gambling less attractive.  A comprehensive study prepared for The
Alberta Gaming Research Institute in March 2003 examined gambling-related crime
in the city of Edmonton, which at that time had four casinos, a racetrack,
bingo halls, lottery and several other gaming options.

The study, which was written by three
university professors with doctorates, noted that while public opinion polls
reflected a general perception that a correlation existed between widely
available gambling and crime, empirical evidence “has yet to confirm this
speculated link between crime and gambling in Canada”. 

One of the reasons there was no empirical
evidence of the link, the study purported, was that police records seldom
specify a gambling connection even though it might have been a factor in a
crime. 

Despite the absence of evidence of a
correlation between gambling and crime, anecdotal data from police suggest
there was gambling-related crime activity in Canada. The Alberta law
enforcement community expressed concern about almost all of the crimes outlined
in the United Church press release.

The report stated that some of the criminal
behaviour inside gambling venues was a by-product of the games themselves, such
as cheating at play, but that much of the criminal activity resulted from
criminal types being attracted to “free-flowing cash, throngs of customers and
the relative ease with which the proceeds of crime can be legitimated.

“In this regard, gambling venues are
somewhat analogous to banks, shopping mall, theatres or sporting events where
crimes occur for similar reasons.”

The study also pointed out that employee
theft was common in gambling venues, something that was attributed to the
“volatile combination of low-paid workers exposed to the temptation of large
amounts of rapidly circulating legal tender”.

As for the crimes committed by problem
gamblers, who might commit illegal acts to obtain money to gamble or pay
gambling-related debts, the report noted that “most of the information linking
problem gambling to criminal behaviour has emerged from clinical, welfare and
judicial sources and is often anecdotal in nature. There is, however, a growing
body of academic literature relating problem gambling with criminal involvement.”

Money laundering, a criminal issue
associated with casinos and other forms of legalised gambling elsewhere might
not be an issue at all in Cayman.  With
strict money laundering laws, regulations and enforcement already in place,
abuses in Cayman would be less likely than in jurisdictions that don’t have an
established anti-money laundering regime in place.  Local businessman and casino advocate Noel
March believes money laundering at casinos would not be an issue in Cayman.

“Cayman would regulate gaming the way they
regulate banking and the finance industry here,” he said. “[Know you customer],
immigration controls… all of that would apply.”

Different locations experience different
crime effects from gambling, depending on a number of factors, the Alberta
study indicated.  Although places in the
US like Atlantic City and two Colorado mountain towns experienced very significant
increases in serious crimes after casino gambling was legalised, casinos in
Christchurch and Auckland, New Zealand, did not experience the same
effect.  Some of the reasons suggested
for lack of crime around the two New Zealand casinos included effective
regulatory, surveillance and management structures in the casinos; both casinos
being located in well-serviced areas that previously had low to moderate crime
levels; and the strict application of high dress standards in the Christchurch
casino.

The study cited many other academic papers
on the subject of gambling and crime, including one that suggested North
American casinos adopt European practices as a way of reducing gambling-related
crime. The significantly lower crime rates associated with European casinos
were attributed to several factors, including: a no-credit policy along with
strict cash-checking rules; fewer gambling formats and a restricted number of
tables; stringent rules about liquor consumption; windows and the conspicuous
placement of clocks to give players a sense of time; registration desks where
patrons might be asked for passports, proof of age and occupational status;
admission fees and strict dress codes that are aimed at excluding undesirable
criminal elements and compulsive gamblers; and career-oriented job
opportunities that create loyal and customer-service oriented employees. 

The study also stated that European casinos
exist to serve a public interest and they are expected to participate in
community betterment efforts.

Which
model for Cayman?

March thinks Cayman would be an ideal place
for well-run casinos.

“Cayman has the best infrastructure, the
best social conditions, the best immigration controls and regulators in the
Caribbean,” he said.

However, the devil is often in the details,
and choosing the correct model for Cayman would be vital to the success of
legalising gambling here.  Many countries,
like the Bahamas, prohibit their residents from gambling in casinos, something
Doyle disagreed with in his submission to the Tourism Association.

“…It would seem illogical in a
democratic, well-educated and very affluent society to apply a complete ban on
resident Caymanians from availing themselves of such a level of entertainment
in their home country,” he stated.

A couple of practices in most casinos
around the would also have to be looked at more closely in Cayman. For instance,
casinos in Las Vegas and other places are open 24 hours a day, Doyle said.  “The slot machines are left running 24 hours,
but table games are usually run on a limited basis until the evening demand
starts at about 10pm,” he said. “Casinos make their money from gaming revenues
and not from liquor sales, but, to max out on the opportunity to generate
revenues, they need to be open until 3am or 4am, consequently, local liquor
licensing times would have to be adjusted accordingly.”

Doyle said that part of the tradition is
for casinos to give free drinks to players, something he said would likely also
have to occur in Cayman, in spite of it being more expensive to do so than in
places in the US.

Doyle’s submission suggested that casino
operators here be asked to indicate, among other things, the degree of
commitment to supporting local charities and the community in general, and
toward minimising the possibility of adverse social consequences.

Many of the adverse social consequences of
casinos arise from compulsive gamblers. If Cayman were to legalise gambling and
allow residents to participate, having treatment programmes available for
compulsive gamblers, and an identified source of the funding for those
treatment programmes, could minimise the negative effects.

March, who said he isn’t particularly
interested in participating in gambling himself, pointed out that just because
a person gambles doesn’t mean he or she will become a compulsive gambler.

“As a Caymanian, I’m insulted at the idea
that just because a casino opens up that I’m going to become a compulsive
gambler,” he said.

Although Doyle’s submission to the Tourism
Association concedes that Cayman residents would be attracted to the novelty
factor of a casino opening here, he believes that it will wear off.

“What applies to all things new will surely
apply here, too,” he stated. “That is, that the initial curiosity will soon
fade and life will return to normal, with the casino becoming just one more
venue to go to on a night out.”

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