Investment in casinos will generate only tax income, few jobs –poll reveals
A survey this week to seek the Sri Lankan perspective on the entry of casinos attracting high-spending tourists found most of the people not in favour of this kind of economic development.
Two polls were conducted by the Business Times (BT) on email and a street poll by the BT’s polling partner, the Colombo-based Research Consultancy Bureau (RCB).
The opposition was more severe from the street where people said such development was not in keeping with the cultural values of the country.
One respondent said that a big casino on the Marine Drive (beachfront road) in Colombo is already causing social problems as it has become a hub for prostitution. Furthermore there are locals who go in there and bust up all their earnings, so much so recently a car was also pawned at the pawn shop at the top of the road in order to pay for gambling.
“Unfortunately even 3 wheel drivers have got caught to the gambling habit because this casino operates a low end version on top of 14th Lane, Colombo 3. You see sometimes their wives coming with babies looking for them,” the respondent said.
Here are other several comments received from the BT email poll:
(A) On the question whether large-scale casinos by foreign operators are good or bad for the country:
- Get the damn casinos out of the island.
- Has sufficient focus been given to the consequences of casinos?
- Casinos are essential for the hub strategy that Sri Lanka is pursuing.
- Good only if they are all concentrated and located (including those now in Colombo) in an exclusive zone with good accessibility from the airport, by water transport modes, rail links, etc. The barren land at Kalpitiya is ideal for this.
- Similarly to Singapore, casinos should be zoned and locals denied access.
(B)Would or would not it lead to significant societal impacts?
- It must incorporate all the safeguards implemented in Singapore for all casinos, big or small. Taxation on bookies should be gradually increased to discourage the low and middle income groups.
- If managed effectively, it can indeed be a saviour (from the need for conservation sense) of our natural, heritage and cultural resources, which will otherwise be impacted by over-visitation of tourists, who do not actually appreciate its value or need to visit these pristine areas. A good example can be drawn from Macau. Examine how the Old Portuguese Quarter (a World Heritage site) is spared by the many million visitors to that part of China. Only a limited fragment of discerning tourists visit the World Heritage area annually, while over 22 million visitors come to Macau for gaming.
- This is more negative than the betting centres, taverns, bars, prostitution, rape, thuggery, violence, etc.
- No impact on society if the government goes ahead as planned to limit entry to foreign nationals.
- Even places like Singapore, which has a higher income level and stricter controls on society, is experiencing negative societal implications after opening up casinos in the last few years. So what hope do we have of limiting negative impacts.
- There will be a significant negative societal impact – addiction to gambling, prostitution, etc.
- It could have an impact if the regulatory structure and rule of law is not strict
- If proper checks and balances are in place, negative social impacts could be minimized.
(C) Will these projects generate new foreign investments and significantly enhance tourism sector earnings?
- Attracting foreign investment and tourists in this manner is incongruous with the values that the country stands for. It is also not sustainable in the long run.
- Yes, if not there will be no new investments in city hotels and apartments. There will be a reduction in new hotel investments in other areas as Sri Lanka will be treated as a boring destination. We need to ramp up entertainment in the city.
- Let’s not be naïve. Foreign investment in casinos will generate only tax income for the government and a few jobs. Nor will it attract tourists other than gamblers. It is also unlikely that Colombo will ever become Macau or a similar gambling hub.
- Yes, if it is part of a mixed development project
- I am undecided on this issue. Normally on such projects there is a significant debt component which will probably come from local banks thus a majority of the capital may not come via FDI. It certainly can enhance tourist arrivals generating foreign exchange but initially it will be negative to the balance of payment since the building of such assets will require a lot of imports.
- Yes’, in monetary terms but a resounding ‘No’ in moral terms.
- Yes … as I found in Macau, the SAR (Special Administrative Region) is thriving because of casinos patronized by wealthy Chinese, Americans, Europeans and even Indians.
- No … It will not generate foreign investment in projects other than casinos. It will not significantly enhance earnings as high rollers will settle offshore which is the usual practice.
(D) Should these projects be granted significant tax benefits and other revenue concessions?
- Most definitely NO. If the income is expected to be as high as anticipated, then the full benefit to the nation should be exploited – particularly in view of the negative aspects. And this means taxes should be high. Again it should be the application of a basic principle of taxation i.e. taxes being higher for the high end and lesser for the lower end of earning capacity
- Tax concessions should be as per Board of Investment guidelines. 5 per cent tax on revenue is all what a high risk investment destination like Sri Lanka can get for the initial flagship investment. The followers can be taxed 7.5 per cent as the risk is lower.
- Initial tax benefits are needed for all tourism projects. But the state must ensure that its tax revenue and other direct and indirect revenues are optimised upon the expiration of the initial tax concession period.
- Should be taxed higher as per other regimes where casinos operate eg Macao, Hong Kong.
- The only way to balance out the negative societal impacts is if the Treasury can obtain revenue that in turn can be redistributed to other causes so that the net effect to society is zero. Without this extra revenue the net impact to society will be negative.
- The casinos will be earning enough to pay regular taxes and should not be treated like a ‘spoilt child’.
- The gambling trade will not significantly add value to the country as all major financial transactions will occur offshore as has been the practice.
- No justification whatsoever as ancillary income from the casino industry through tourism and local employment will be insignificant in comparison to loss of earnings due to tax and other concessions.
- Tax exemption for 27 years (10 years start up period + 1st year for tax free dividend payments+ further 15 years+ 2nd year tax free dividend payments). Other start up concessions such as duty free imports/tax free foreign staff/exemption of PAL and VAT. These concessions will result in a net outflow of foreign exchange earnings.
General comments:
- Sri Lankans across the board have suddenly discovered religious righteousness. Why don’t you ask them what their moral stance on gambling is? Whether they think it is right or wrong and whether they want legalised gambling in their backyard, whether they themselves are part of it or not?
- Also, since we are so hooked on the Singapore example; today Singapore uses casino tax money to fund cultural activities. Now that is an intelligent and desirable way to use ‘dirty’ money.
- This should not be allowed because of all the related vices of human trafficking, mafias, drugs, money laundering etc. How does having it in a designated area make it morally/ethically acceptable if it’s not OK for a Sri Lankan and our culture and will be therefore preventing/deterring locals by charging additional fees etc? How can it be OK for another human being? It is an ethical farce.
- We are going to have a separate 500 acres filling the sea – the new Port city on the fringe of the Galle Face Green. Casinos, car racing and horse racing could be considered here. No one will object because it’s not on our mother Lanka, but on adopted land. Good for Sri Lanka. Our tourism will improve and the country will prosper!
- I agree with the Ven. Maduluwave Sobitha that the opening of casinos by Packer and his Sri Lankan collaborators or any others, is totally unacceptable and would contribute to an increase in illicit activities and be a drain on our foreign exchange.
- Asian countries have much better casinos and gaming salons. Only a few South Indians would patronize our casinos.
-These tax benefits should be given to agro based plantations and industries which will be productive moreover because the money stays in Sri Lanka and would not be remitted overseas like the casino operations. Casinos in Atlantic City and the Indian reservations in the US and Freeport in Australia were begun to develop those underdeveloped areas. Casino operations are not complicated rocket sciences that requires foreign expertise but simple unadulterated gambling.
| Limit casinos to foreigners, RCB poll says
The RCB poll on casinos jointly undertaken this week with the Business Times to gauge the people’s opinion on casinos found many respondents expressing their views on the issue – some for; some against. Here are comments from the poll conducted on a Colombo street: -While this country is already ‘filled with evil”, this government is now bringing casinos and legalising it and through it create an additional evil society. -Living costs are skyrocketing and people find it extremely difficult to live. Casinos would be an additional burden to the country. - The bid to flush out black money would enhance the outflow of foreign exchange from the country. -Casinos are promoted in an attempt to fulfill the needs of a section of the people. -Sri Lanka is considered a Buddhist country but the casino culture will further dilute the religion. -This is another arrogant decision of the government which is full of narrow concepts and ideas. -The government shuts out tax concessions to the local economy but opens the flood gates to foreigners. -This industry brings lots of foreign investments and it will help the country’s culture economy. -This industry is a sign of prosperity of developed countries and is essential for this country too. -Laws to limit it to foreigners only should be enacted. If so it would not be harmful to the country. -Turning a blind eye to drug trafficking and prostitution would inevitably happen with the establishment of casinos. Casino gambling will grow while religion will take a few steps back. -Foreign outflows will be faster than inflows; that I believe is what would happen. |