Casino cat and mouse

Editorial-April 26, 2014,

The cat and mouse game clearing the way for up-market casinos in Colombo to attract high spending gamblers to Sri Lanka continues unabated and some major steps in this direction were taken in parliament last week. Both President Rajapaksa and his government are clearly taking the public for suckers with their hollow denials on this issue. Only the very naïve will believe the oft-repeated assurance that no new casinos will be permitted. Neither John Keells Holdings, the country’s biggest business conglomerate, that has begun work on its mega integrated resort project in the Slave Island area where it owns valuable real estate, nor James Packer, the Australian gambling mogul who was warmly received here by the investment promotion minister not so long ago, will be flushing their money down the toilet if gambling will not be permitted in the so-called mixed development projects they are undertaking.

JKH Chairman Susantha Ratnayake is firmly on record saying his company will not operate casinos because that is not their business. But they will be renting out space in the luxury resort now being built to casino operators maintaining the highest international standards, he has indicated. Packer’s Crown Resorts website is full of their plans for Colombo. Dhammika Perera, whose fortune is rooted in casino operations, and Ravi Wijeratne, also big (by Sri Lanka standards) in that business, are firm favourites of the government and its leaders with whom they maintain very close and cordial links. Perera who controls many big quoted companies including Hayleys and the big ceramic companies, performs both executive and non-executive functions in the various businesses he has interests in. Curiously, he is also the Secretary to the Transport Ministry, no doubt handpicked for the job by no less than the president. He was once the head of the Board of Investment. Will the government deny its friends, nay bosom buddies, opportunities that could be good not only for themselves but also for the economy? Not likely.

Undoubtedly gambling is socially undesirable as also drinking and smoking. As we commented in this space last week, liquor and tobacco are among the biggest revenue generators for the government. Despite some laws and the price deterrents imposed on smoking and drinking, the government is more than happy to receive the mega taxes paid by these industries into its coffers. Dhammika Perera’s and Ravi Wijeratne’s casinos as well as a few others have been in business for many years now. The UNP which is today attempting to project a holier than thou attitude on this matter permitted them to operate and even encouraged them during their watch. We do not think that the planned high-end casinos are going to attract the indigent who will gamble away money that should feed their families within their luxurious portals. People in that economic stratum will not be able to afford to come within sniffing distance of such places. Instead they will creep into the bookies that abound in the urban centers and even in the more remote parts of the country and place their bets on horses racing in England. In so doing they will be enriching, among others, at least one government parliamentarian!

What is particularly odious about the manner in which the government is setting about this whole business is its total lack of transparency. Instead of saying that Sri Lanka wishes, like some other countries in the region, to benefit from a high-end gambling industry and getting on with the job of permitting respectable operators, be they Packer or any other to come in on their own or in partnership with locals, there is great pretence that nothing on these lines are afoot. Why then the changes in various gazettes on these projects, postponements, references to `associated facilities’ and other footwork that certainly cannot be called nifty. Clumsy would be the better word.

Even the government’s own partners do not believe its mealy-mouthed prevarications. The JHU voted against the government of which it is a member on Friday. Ven. Ratana said that they did not seek to topple the government but was keen on putting it right where it was going wrong. We are sure that Minister Champika Ranawake will not give up his cabinet ministry if he can help it. His party also knows that it is not going to poll as many votes paddling its own canoe against running for election under the UPFA umbrella. Despite the government whip, many members of the ruling party did not turn up at voting time. This included members of the Muslim Parties, the Sri Lanka Muslim Congress of Minister Rauf Hakeem and Minister Rishard Bathiudeen’s Makkal Congress. Mr. Wimal Weerawansa and his National Freedom Front also made no show. None of these parties, their leaders or MPs will endanger their positions by breaking ranks on an issue like casinos. Nor is the president going to break-up the UPFA coalition by kicking out those who flouted the party whip.

Nevertheless he has received a clear message that not everybody under his wing will say ehei hamaduruwaney (yes, your lordship) to all that is demanded of them. The country has in recent years invested enormously in the leisure industry and the hotel rooms that have already been built, now under construction or in the pipeline must be filled. A well run gambling industry, it is believed with good reason, will attract visitors particularly from India and China. What is necessary is that such an industry must be tightly regulated. Singapore had for a long time resisted the establishing of casinos in the city state but more recently changed that policy. However, like it does in all matters, that industry now earning a pretty penny for the country, is very well regulated. Our track record on this score, as in many others, is unfortunately dismal. If it is the government’s wish to earn gambling revenues, it should set about honestly securing that objective without pretending it is not but ensure that the operation is tightly regulated. Foreigners may be welcomed to gamble on our soil but we certainly must not allow our people to lose their grocery money at roulette tables or be drawn into ancillary vices.