Features

Bonanza to James Packer from casinos

06 Nov 2013 - {{hitsCtrl.values.hits}}

By M.P. Wickramasingha
Casinos are not the playgrounds for the rich and the dashing anymore. The era when it was gentlemen in black tie and ladies in evening dress and glistening jewels is over. It is neither super-sophistication - great numbers from all walks of life play the wheel - nor is it Westernisation. Casinos have sprung up in Asia – the Philippines, Cambodia, Thailand, Macau, Malaysia, Nepal, India and at one time in numbers in Sri Lanka.

The attire is of little consequence but the green backs collectively are. In almost all countries, casinos are run by the private sector but the government controls rigidly the dollar intake, by empowering recognised banks to monitor the encashment that are deposited in sealed boxes. A very large percent of the takings are revenue to the government.

From the balance, a small percent is for the operators but still, large enough for American millionaire Donald Trump to build skyscrapers in Park Lane. A smaller percent goes back to the gamblers by way of prizes and in the USA these amounts to million-dollar jackpot bonanzas. Casinos are cash cows that generate colossal revenue from which the government benefits most. Casinos have erupted in the Indian Reserves and Atlantic City in America and Freeport in Australia to develop those less advanced states.

Sri Lanka is perhaps the only country in the world that permits casino operators’ opportunities of accruing huge profits due to the lack of revenue controls. At one time, they were free of corporate tax, vat and betting tax. It was announced that they pay revenue tax.

What percentage of the takings would accrue to the government from the Australian casino investor James Packer’s package? Income tax is paid out of profit and for a few years Packer would not pay because capital expenditure and other deductions would reduce the profits to a bare minimum. Tax is a percent of profit but what is required is a large percent of the take-over as done in casino countries.

Casino operations could be justified in Sri Lanka if it could be a source of considerable revenue for the government for specific development projects undertaken by men of integrity in the public and private sectors. The USA and Australia have proved that revenue generation from casinos were successfully utilised for development of deprived states. Today, these cities thrive.

The pluses are:

It is marginally good for tourism
It can be a source of revenue for organised development
It generates limited direct and indirect employment

In this permissive epoch, when modern thought supports exposure in favour of curtailment for the developing mind, a liberal view can be justified: only if there are patent and tangible benefits to the country.

In Sri Lanka, is there substantial revenue generation to the government and is that revenue utilised specifically to develop the country? No. Casinos are not legalised and government revenue is only a small licencing fee.

Would the proposed Packer operation be a stimulus to the tourist industry and justify foreign exchange earnings?

Most unlikely. In Asia, casinos are operative in Nepal, India, Singapore, Malaysia, Thailand, Macau (Hong Kong), the Philippines, Cambodia, etc. Packer’s magic wand may not hit the jackpot figures he has projected but he would take advantage of the current lax system that is in operation. The cash cow would be his and not the government’s.

Casinos, as proposed by Packer, are simply hard core, unadulterated gambling in opulent and plush surroundings with little controls and restrictions permitting colossal dollar earnings to Packer.

Obviously, this is not for the development of the country but for Packer.

(M.P. Wickramasingha is the Chairman of Ceylon Biscuits Limited)

Features

Bonanza to James Packer from casinos

Most Popular Articles

Third review approved by IMF, SL to get next US$ 333 million tranche

Niloufer Esufally-Anverally Makes a Stylish Comeback with the Launch of NLFR

Industries Ministry public day re-launched after four years

Global Entrepreneurship Week 2024 kicks off across all 25 districts

LATES'T NEWS

Over 50,000 people affected due to natural disasters

Depression in Southwest Bay of Bengal to intensify, near east coast

Several roads in Badulla obstructed due to heavy rains

Sujeewa Senasinghe’s luxury vehicle lawfully imported, Magistrate orders CID to release it

Royals to provide Hasaranga chance to conquer world again