Should Cayman follow the Bahamas on gambling? On 28 January the Bahamas rejected, in a national referendum, the introduction of a national lottery and the legalisation of the numbers game. Yet tourists are allowed to gamble in licensed and regulated casinos, an activity that brings considerable revenue to the coffers of the Bahamian government.
Unlike in Cayman, gambling has formed a significant part of the Bahamian tourism product. There are three major resort casino operators – the Atlantis on Paradise Island, the Crystal Palace casino in Nassau and the Grand Lucayan’s casino in Freeport. These will be joined in 2014 by the $2.6 billion Baha Mar project, which will feature a new casino as one of its main attractions.
Bahamians, and foreign residents, who are not allowed to gamble in the casinos, take advantage of the significant number of jobs offered by the gambling industry. With 6,500 staff the Atlantis resort is the largest private sector employer on the islands.
At the same time, the prohibition of casino gambling for locals does not mean that gambling is not part of Bahamian culture. The numbers game is practised widely in ‘numbers houses’ or so-called ‘web shops’. These legal Internet cafes can offer illegal bets on the side and in plain sight, partly because the gambling legislation dating back to 1969 does not cover the Internet and partly because of the political unwillingness to enforce the law.
When Perry Christie, the prime minister, called for a referendum on the introduction of a national lottery and the legalisation of the numbers game some accused him of partisanship and financial backing by the web shop operators.
The debate that ensued in the Bahamas echoed many of the concerns about and arguments made in favour of gambling in the Cayman Islands. Proponents of gambling pointed to the double standard and argued the prohibition of gambling for locals infringes on their civil liberties. They noted the additional revenue that was going to be generated for government, estimated to be around $20 million every year, in addition to the benefit for local employment.
Casino operators, calling for wider reforms, stated the Bahamas could triple its $146 million annual gross gaming revenues. The 1969 Lotteries and Gaming Act, which governs the casino gaming sector, was last amended in 2004, and new proposed reforms could include private VIP gaming rooms; credit-card payments for chips, online and mobile wagers; and betting on sports matches while play is in progress. This could also help ailing revenues, which have been falling slowly since the emergence of the Florida gambling market, casino operators said.
Tied to the revenue and employment argument is the increased tourism activity. Casinos make a profit in their own right but also form a main attraction for the resorts that operate them and bolster the number of rooms sold each year.
The main arguments against gambling, most strongly expressed by the church groups, alleged that core Bahamian values like work ethics would suffer amid the legalisation of gambling. Another concern was that enforcing rules against illegal gambling is a much easier exercise than licensing and regulating legal gambling, including ensuring efficient operations free of manipulation.
No matter where one stands on the issue. It can hardly be denied that gambling exists already in Cayman. At the Cayman Business Outlook in January a panel of politicians debated the potential introduction of gambling. UDP General Secretary Ellio Solomon, said he was personally opposed to gaming, stating he had seen too many families gamble away their “milk money”.
Legalising gambling could cost Cayman more than it would earn the government in revenues, Solomon said. “No one’s going to tell you what you’re going to have to push out in terms of programmes for those who are addicted to gambling.”
Deputy Premier Rolston Anglin responded that whoever is concerned with the negative social consequences of gambling should really be concerned about it already and not just in terms of the legalisation of gambling.
“There are more numbers and more gaming systems here now than there ever were before,” Anglin said. “If we are going to go out and eliminate the evils of just the numbers system alone, we need to beef up the [Royal Cayman Islands Police Service] … and wage a war to stamp it out.”
If only allowed for tourists, Anglin said that casino gambling had the potential to enhance Cayman’s tourism product. “Look at the number of countries in the region and look at how those have completely changed and revolutionised their tourism products.” Not surprisingly the Cayman Islands Tourism Association is in the process of forming a position on gambling as part of six key issues that the organisation has identified.
Opposition Leader Alden McLaughlin said he personally does not support gambling, but others in the People’s Progressive Movement Party were “far more liberal” on the gambling issue.
McLaughlin pointed to the small economies of scale of a lottery in Cayman, which could make it necessary to join up with other countries in a regional lottery as it was done in the Eastern Caribbean. “I believe that Cayman’s population simply would not sustain it without being affiliated with a lottery somewhere else.”
Also a distinction would need to be made between a lottery and casino gambling, McLaughlin said. “The issue with casinos is the same one that Bahamas have contended with: Should you or should you not let your local population play?”
Both Anglin and McLaughlin said any decision about the legalisation of gambling would have to be put before the Cayman people in a national referendum.
As the referendum in the Bahamas has shown, the result of such a poll is anything but a foregone conclusion. It has also proven that casino gambling for tourists does not necessary lead to the automatic liberalisation of gambling for all in every form.
To properly determine the wishes of the electorate, any government first has to disentangle the sometimes related but essentially separate issues of casino gambling as a tourist offering, cruise ship gambling, national lottery, numbers game and Internet gambling and their unique implications.