The history of casino gaming in the Bahamian economy has a span of almost nine decades, easily allowing The Bahamas to be considered the 'grandfather' in casino development in the Caribbean.
That country has supported legalised developments of tourism resort-based casinos as an amenity to its overall tourism product that provides entertainment for the more than 4.5 million (2008) international visitors to its shores. In fact, government officials in The Bahamas credit The Bahamas' position as one of the leading tourist destinations in the region, with more than US$2 billion in visitor spending (2007), to the enhancement provided by casino gambling.
CASINO INVESTMENTS IN THE BAHAMAS ECONOMY
Investment in the casino sector has been undertaken by several internationally renowned and well-known names in the resort and casino investment business. Today, the operator licences of casino investors are held by the 5,000 sq ft casino at the Four Seasons, Emerald Bay, Exuma; the 20,000 sq ft casino at the Isle of Capri, Grand Bahama; the 30,000 sq ft casino at the Bahamia, Grand Bahama; the 35,000 sq ft Crystal Palace Casino in Cable Beach, Nassau; and the 50,000 sq ft casino at Atlantis on Paradise Island, which is among the largest in the world.
With casino investments in the 1960s, the country in general, and Grand Bahama in particular, was promoted as a "swinging casino destination". This seemingly contributed to casinos in the country becoming, even then, a major attraction to tourists as a form of entertainment in which they could participate while they enjoyed a stay at an island beach resort. A 1968 study by The Bahamas Ministry of Tourism revealed that the first strength of the country, as perceived by visitors to The Bahamas, was casino gambling, with water sports and nightlife ranking second and third, respectively.
LEGAL AND REGULATORY FRAMEWORK
The very nature of casino gambling, including the heightened possibility of cheating, suggests the need for effective regulations to uphold the integrity of the industry. The design and implementation of controls to regulate the industry are, therefore, often seen, on the one hand, as a means of deterring cheating and, on the other, as a means of improving the image and integrity of the industry. Successful casino jurisdictions have learned, for instance, how to maintain a balance of controls and regulations. If regulations were too lax, crime and corruption might flourish; if regulations were too strict, it would be difficult to attract entrepreneurs to invest.
Of paramount importance, however, is the need to ensure, first, that all revenues from casinos and gambling activities are properly recorded and correctly taxed; second, that all the games are conducted honestly; and third, that the industry is 'sanitised' of relations with organised crime, including money laundering and tax evasion.
EMPLOYMENT
Data for The Bahamas estimate that tourism accounts for approximately 50,000 jobs, or about 38 per cent of total employment in the country. Given the size of the various investments in casinos, it is safe to say that a significant number of additional jobs would have been created indirectly in the construction, refurbishment and related areas of development. It is also safe to say that other kinds of indirect job creation continue as casinos operate on a daily basis.
Gaming statistics show that in June 2002, the total number of persons employed directly by casinos totalled 2,747, of which 88 per cent were Bahamians. Employment created to regulate the sector by government should not go unnoticed, even if one only considers the employment within the Gaming Board, as these positions were created specifically for the industry.
The revenue generation aspect of the casino industry is the most compelling economic reason for policy development towards casino, or for considering any sort of involvement in this sector. Government receives gaming revenue from four sources: basic taxes, winning taxes, fees for permits and certificates, and application fees for casino personnel. Casinos, depending on the category in which they fall, may pay up to $200,000 in basic taxes and up to 25 per cent on their gross winnings. In the period beginning July 1996 and ending June 31, 2003, government revenue from casinos ranged between US$18 and US$23 million.
Government expenditure
At just under $3.5 million, the expenditure of The Bahamas Gaming Board is within the range of 15 per cent of casino revenues raised annually. This, therefore, leaves government some 85 per cent in net revenue and US foreign exchange earnings.
Tourism and casino revenue/expenditure
According to The Bahamas Ministry of Tourism and Aviation, the number of stopover visitors who say that they come to The Bahamas because of gaming is very small compared with overall stopover arrivals. When total tourist arrivals are matched against tax revenue generated, it is clear that visitors, across the board, participate in casino gaming, and not only the small numbers who were drawn to the country because of casinos.
This lends support to the observation that casinos are a form of entertainment for all visitors, generally, and not only for those who choose to come specifically for this. It is, therefore, a form of entertainment that adds to the gamut of activities for visitors in the destination and allows foreign exchange revenues to be maximised by the destination.
SOME KEY ISSUES AND CHALLENGES
Generating, receiving and maintaining the economic benefits of the casino sector in The Bahamas over the years were not without challenges; and related issues arose from all sides within the economy: the population, casino employees, investors and government.
Resistance from the Church
One of the challenges, especially during the earlier expansion stages of casino development, was the concern and resistance by the members of The Bahamas Christian Council. The religious objections generally went unanswered. Today, there appears to be either tolerance or a general acceptance by Bahamians of casinos as part of the tourism product. While Bahamians do not participate as gamblers, they are fully involved as casino employees. This has apparently had little or no negative effect.
Objections from permanent residents
Ironically enough, resistance to being debarred from casino gaming has now come to the forefront by industry operators and permanent non-Bahamian residents. The industry supports consideration of this issue by government as it believes that some Bahamian residents, including second homeowners "who have a proven net worth" should be given the chance to play as part of an effort to "shore up casino profits".
Decrease in patronage of native clubs/shows
The only negative impact found that was ascribed to the development of casinos, especially in the capital city of Nassau, was the "decline in popularity of native night clubs". One of the first indications of the downfall of the native clubs began when show dates for both local shows and casino shows were scheduled simultaneously. Cruise passengers and other tourists who would otherwise have gone to the native shows were then directed by their coordinators to the shows at the casino.
Remaining competitive in an expanding sector
With an expanding casino industry in the United States, which provides more than 75 per cent of the visitors to The Bahamas, the competition facing The Bahamas is continually increasing. Of even greater significance are the two recent bills passed by the Florida Senate Regulated Industries Committee that will, among other things, lower the legal gambling age from 21 to 18 (as is currently the case in The Bahamas), add to the stock of legally available casinos, and increase the variety of tabled and slot games available.
The advantageous position that The Bahamas has held in the past is now under question by government and industry alike. It is not surprising, therefore, that a call was made by the Minister of Tourism and Aviation for the sector to scrutinise its operations and proactively enhance its competitiveness to ensure its continued long-term survival.
On the industry side, leaders believe that a "radical change" is needed if they are to survive new competitive threats, and call for a very comprehensive approach that would also look at the regulations and legislation that will allow The Bahamas as a jurisdiction for gaming to be able to compete with other gaming jurisdictions around the world.
RECOMMENDATIONS
1) The Bahamas model of resort-based casino development for tourists should be considered as a development option to maximise the economic earnings of this sector to Jamaica.
2) The training and manpower development needs of the sector should be mapped out so that the country can ensure that its citizens are employed at all levels within the sector.
3) The sector should be effectively regulated, and the country should ensure that manpower to monitor and implement the regulatory framework is available and suitably trained.
4) The sector should be regulated by a structure that can understand, consider and respond quickly to the competitive needs of the industry, while ensuring that its goals are met.
Abridged version of Dr. T. Jennifer Edwards' (Centre for Hotel and Tourism Management, UWI, Bahamas) presentation at the UWI, Mona, April 2009 Policy Conference on Casino Gambling.