Editorial

The Government has slapped what appears to be a reasonable tax on casinos operating especially in Colombo. The question is whether the move is aimed at discouraging a dodgy anti-social business or collecting revenue, or both. Either way, there is no question that casinos have been associated with money laundering where the ‘bank’ (or the casino) almost never goes bust, unlike its clientele.

The IMF and the European Union (EU) have long issued ‘yellow cards’ flagging Sri Lanka as a country with duplicitous legal status on casinos — banned under the Gaming Ordinance, yet permitted under a licence by the Betting and Gaming Levy Act. They point out textbook money-laundering: casino earnings to banks to real estate. Successive Governments have been confronted with this 24×7 industry, partly because political leaders were in the pockets of its owners. In 2006, laws were enacted and international treaties (Vienna and Palermo Conventions) were signed to prevent money-laundering but observed only in the breach.

It was President J.R. Jayewardene’s liberal economy that opened the doors to full-fledged casinos. From jackpot machines in small kiosks and ‘bucket shops’ that entertained race-by-race bets on horses galloping away in far corners of the world, the gaming business graduated to carpeted rooms with blackjack and roulette tables. Now it has extended to online betting from the comfort of one’s home. The money trail in these operations is almost impossible to detect. Like the ‘Hawala’ system, local casinos operate outside the traditional banking channels on a code of silence, like the ‘Omerta’, and on trust. Gamblers come from abroad armed with a slip of paper, collect their chips to play, and go back with another chit if they have winnings to collect.

The Premadasa Administration unceremoniously booted out a Singaporean big-timer and publicly steamrolled his machines. But the business did not fold up entirely. It bounced back with generous tax concessions.

Then came an Australian casino magnate under the guise of ‘foreign investment’ only to have his plans for a USD 350m luxury resort in downtown Colombo scuttled. President Wickremesinghe as Prime Minister in 2015 told the billionaire; “Do not come to our country in your lifetime.”

At the same time though, the then Finance Ministry tried to collect revenue by imposing a once-and-for-all licence fee of USD 7.6m (Rs. one billion) on existing casinos, but some did not pay up and went to court instead dragging out the issue.

These days there appears to be a tourism promotion campaign to offer Sri Lanka as a gambling destination. Charter flights from India bring in loads of ‘tourists’ with in-flight announcements to collect their ‘chips’ immediately upon disembarking. The State Minister for Tourism has called for the legalising of local cannabis and for a ‘night economy’ to put the economy on a high.

When the daytime economy remains stagnant, such calls seem deceptively attractive. The mandarins in charge of tourism promotion see Lanka’s sun, sea, scenery and sites as insufficient; sin needs to be added. Some countries have succeeded in opening up a night economy but sans strong regulatory mechanisms and incorruptible enforcement agencies, it is going to be nothing but a free-run for organised crime.

The Government, no doubt, has a difficult choice to find the dollars but is it okay with any which way they come? The Governments of 2015 and 2019 both launched a ‘no questions asked’ policy granting amnesty to those with undeclared monies. Now, the present tourism promoters at a political level seem to have taken a cue to promote male-focused entertainment to rake in dollars. But even setting aside the socio-religious mores of the majority for the moment, how many dollars eventually come into the formal economy when the regulatory mechanisms are so weak is the question.

Northern youth in the claws of the narcotics beast

 The recent Supreme Court determination that the proposed Rehabilitation Bill was unconstitutional was unfortunate because the Government needlessly introduced vaguely defined, ambiguous provisions that seemed to give the military wide powers over political elements who were deemed to require ‘re-education’ therapy. The original purpose of the Bill was to rehabilitate drug addicts – and ex-combatants (LTTE cadres), and one hopes the rejection of the Bill in its current form does not mean throwing out the baby with the bathwater, especially in relation to rehabilitating drug-dependent persons.

Last week, this newspaper published a situation report from the North on the prevailing drug addiction largely among youth (between 17 and 30) in the Jaffna peninsula and its environs, including its surrounding islets. The report said that most addicts are street-level heroin and cannabis users. Those who indulge in multiple drugs use ‘ice’, an addictive stimulant also popular with youth. While the former comes via Indian fishermen passed on to local fishermen exploiting the lack of security in the Palk Strait, ‘ice’ comes from Colombo, often in public transport plying to the North. If and when detected, the bus driver and conductor plead ignorance.

Several have died from narcotics abuse in the North and more than 300 people are in prisons for drug-related offences. Drug peddlers target unemployed youth who have extra money from remittances by relatives abroad and schoolchildren are induced into trafficking by selling mini-packs to friends. They are given one free for every ten sold.

The economic crisis has contributed to the situation and it seems the COVID years made a bad situation worse. Unemployment in the North is higher than in the South. The youth had nothing to do. Local police were issued orders to be stationed closer to their homes during this period. That lured them into the drug peddlers’ and smugglers’ networks. Tip-offs to the local police got back to the mafia. The crime rate shot up in the process.

Local politicians will not speak up against Indian pressure that allows fishermen to cross over, permitting the drug-smuggling exercise to flourish, and there will be a howl if the armed forces stationed in the North or policemen from the South move in to arrest their voters. It is time they diverted their focus from Geneva and what their handlers in Toronto want them to do and looked at what is happening in the very backyards of the community they represent, especially to the youth.