Robert Buddan, Contributor
THE PEOPLE'S National Party (PNP) National Executive Committee will be discussing economic policy on January 10.
Our debt problems, I'm sure, will be a major focus. I think a pragmatic position is needed on the economy and I believe that a reasonable and acceptable policy on casino gambling can be constructed.
Hawaii is one of two American states that do not legalise any form of gambling. Thirty of the 50 U.S. states legalise casino gambling. Hawaii has been debating the legalisation of casino gambling and one legislator has recommended a reasonable set of terms that should satisfy moral objections and ensure that economic benefits outweigh social costs.
The law on casino gambling, he said, should require the operators of licences to:
Spend a certain minimum, probably US$500 million, on facilities to improve the overall visitor base. These might be new hotels or special attractions like a world class aquarium. These would generate additional tax revenue.
Create a certain minimum number of new jobs, say 5,000, for local residents.
Pay an upfront licensing fee, maybe US$100 million, as soon as approval is granted and devote part of that fee to some social or economic cause in the national interest. In our case, I suggest this should be to pay down our debts.
Agree to an annual gaming tax that could generate another amount that could also be dedicated to paying down our debts. The tax rate typically applied is 20 per cent but we could double that.
Require casino establishments to use local vendors and suppliers as far as is possible.
Agree to a 10-year sunshine period that would allow legislators to assess the costs and benefits, after which they could close the casinos if they wanted to. A 10-year period would be sufficient time to judge net benefits and allow developers to earn back their investment.
THE DESTINATION INDUSTRY
Casinos would be part of Jamaica's destination industry. Visitors would still be invited to enjoy the country's weather, culture and beauty. Casinos would just be another entertainment activity.
Certain developments make casino entertainment worth thinking about anew. The impact of 9/11 exposed the vulnerability of the tourism industry and casino would add an important cushion against any future fall-out.
Recent efforts by the U.S. Congress to remove travel restrictions against Cuba signal the competition that Cuba would provide and there are aspects of Cuban tourism that Jamaica cannot match. For ideological reasons Cuba is unlikely to legalise casino entertainment, so this would give Jamaica a needed advantage.
Other countries are taking on to casino entertainment. Mexico, China, Korea, Japan and Thailand have recently legalised it or are thinking of doing so. In the U.S., legalisation has been popular over the last two decades. Entertainment tourism is developing apace and we should not allow ourselves to be left behind.
As we close in on the deadline for the Free Trade Area of the Americas (FTAA) in 2005, we face new uncertainties under globalisation. Should it turn out that we lose competitiveness in old industries we should insure ourselves by being competitive in new industries.
Globalisation means that countries can no longer shield themselves from practices in other countries.
MORALITY AND DEVELOPMENT
The casino industry is a good case in point. People in Jamaica and around the world now engage in casino gambling on the Internet. We might as well establish and regulate our own to our benefit.
Two questions are often raised about casino gambling. The moral question is whether casino gambling is consistent with our way of life.
The developmental question is whether the social costs associated with it outweigh the economic benefits.
Gambling is consistent with Jamaica's way of life and with the way of life of most Christian, liberal, market, countries that practise the values that we do.
The question should really be, on what logical grounds should Jamaica be the exception? Furthermore, since Jamaica already practises slot machines, lotteries, and betting, why should casino gambling be the specific exception?
REGULATION VS PROHIBITION
The argument here seems to be that casino gambling brings social costs that outweigh any benefit. But on this we are at best inconsistent.
The forms of gambling that we already practise bear social costs. Other industries that promote smoking and alcohol do the same. The cost in lives that guns and ammunition cause cannot be measured. The social cost of the content of Hollywood entertainment violence and anti-social values has no economic benefit for Jamaica. Ecological economics say that many standard economic activities carry environmental costs that outweigh benefits. Industries pollute land, sea and air, yet we accept them as parts of our way of life.
We do not ban industries that degrade and destroy, we regulate them through environmental and social impact laws. We try to alleviate their impact through policies for poverty alleviation and environmental protection.
We set up special agencies to do this. We do not effectively ban prostitution nor pornography on cable and in night clubs but we regulate them by law and mitigate their impact by teaching the right values. The way of the market is to regulate. The way of the Church is to prohibit. The commandments all begin, "Thou shall not". The Church punishes by promising hell and damnation, excommunication or, in the case of some religions, decapitation. Part of our existential dilemma lies precisely in not being able to resolve the mixed-up morality by which we live.
This is because we fail to differentiate between those activities that we should regulate and those that we should prohibit. This makes it appear that we live by a double-standard.
MOVING THE DEBATE ALONG
Casino entertainment belongs to the sphere of the economy and not the sphere of religion. It should be regulated, not prohibited. There is no commandment that says, "Thou shall not gamble."
We should move the debate from whether to introduce casino entertainment or not, to how best to regulate the industry so that benefits outweigh costs. The experience of other countries helps.
Specific areas could be zoned for casinos. Certain people, like nationals, could be barred. Limits could be placed on bets and winnings. Licences could limit operators to tourism seasons.
Casinos could be restricted to at-sea (on cruise ships within our waters) or on land in licensed hotels. Legislation could specify a sunshine period. The best way to proceed is to test the industry over a sunshine period. Let us put the arguments to the test, on our terms, not the terms of other countries.
Casino entertainment should also be introduced as a part of a wider destination market. We must develop other service industries like medical and wellness centres, new technologies in agriculture, international conferencing, sports colleges, music, and all those other untapped sources of wealth at our disposal.
Let us develop our economy and keep our moral values as we do so. But let us not confuse regulation and prohibition.
Robert Buddan lectures in the Department of Government, UWI, Mona. E-mail:Robert.Buddan@uwimona.edu.jm
