CASINOS GROSS billions in revenue from which the Government could earn millions in taxes, but it will take at least four years for the coffers to be seriously enriched via this gambling route, says chartered accountant Dennis Chung.
Looking at the revenue potential of casinos, Chung told a forum of accountants on Wednesday that if Government were to approve the gambling houses now, they would take a few years to become fully operational, given the time needed to deal with the legislative, licensing and construction processes.
Some revenues, from the licences for example, would flow to Government by the end of 2005, but the project would not mature before October 2007, he told members of the Institute of Chartered Accountants of Jamaica (ICAJ) at a Hilton Kingston meeting to look at 'Budget Alternatives'.
"Casino revenue is not a short term solution," said Chung, in a presentation on 'Casino Gambling' at the forum. "It won't impact this, nor the next budget."
Nevertheless, the chartered accountant was all for its legal introduction, having argued that they are already in de facto operation under the name of gaming rooms. He based his presentation on the Nevada definition of casino as "a room or rooms where gaming is conducted."
Citing the additional 10 per cent tax that the mecca of gambling, Nevada, United States has placed on all entertainment activities related to its gaming rooms, Chung said Jamaica, despite having such facilities, was not earning as much as it could from the operations because of its reluctance to acknowledge that it does have casinos here.
But noting that Jamaica is already cited as a destination with casinos internationally, and that its gaming rooms already replicate casino games, Chung remarked that "the only thing missing is the dealers."
The Government last month softened its stance on casinos, despite the church's continued disapproval, noting that it will legalise them if the Private Sector Organisation of Jamaica can prove that their economic benefit will outweigh any social fall-out.
Noting that Jamaica now collects a $10,000 per annum fee per gaming machine, the accountant said the Government could easily increase its take by adding a 10 per cent tax on the payout from the machines, referred to as the 'drop', with the necessary legislative changes. Jamaica has an estimated 6,000 machines in operation.
In an indication of the earning potential of casinos, Chung said Nevada grosses $7.7 billion in revenues, New Jersey takes in $3.9 billion; Mississippi $1.98 billion, and closer to home, the Bahamas earns US$1.7 billion.
Bahamas casinos, said Chung, employ 5,000 people and paid out $19 billion in taxes between 1997-2000.
The accountant noted that Jamaica's gaming rooms are supported 70 per cent by locals currently, but said the island should seek to attract tourists to its games, ostensibly to increase the foreign exchange revenue potential. The targeted gamblers, he suggests, should extend beyond the all-inclusive visitor who now spends little outside the property where they are booked.
However, in a counter to Chung's arguments, economist Dr. Peter John-Gordon said there was no evidence to suggest that tourists would be prepared to come to Jamaica just for its casinos.
North Americans used to seek out off-shore gaming rooms when they had little options at home, but the landscape has changed since, and Americans don't have to leave home now to gamble, the Planning Institute of Jamaica director said.
"It's wrong to think the tourism numbers will increase because you have casinos," said Gordon, adding that there are countries in the region with casinos that bring them no significant economic benefit.
Chung notes that Jamaica can add millions more to the $1.5 billion it now gets in taxes from the lottery. Jamaicans are currently spending some $17 billion on games and bets annually.