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Minimum 200,000 Visitor Boost From Gaming Reform.
Thursday September 26th, 2013
The Bahamas will attract a “minimum” 200,000 new tourists annually if the Government adopts all the casino industry’s reform proposals, a senior executive saying: “This is one Bill that can actually grow the economy.”
Stating that it was rare for legislative initiatives to produce such an impact, Uri Clinton, Baha Mar’s senior vice-president and general counsel, told Tribune Business that failing to pass the reforms would leave the sector “competing on a global scale with our hands tied behind our back”.
Acknowledging that the $2.6 billion Cable Beach developer’s casino-centric model meant it had to be “very supportive” of the proposed Gaming Bill 2013, Mr Clinton said the industry felt it would also enable the market to “support itself” when Baha Mar opened in late 2014.
His presentation to the College of the Bahamas (COB) tourism conference yesterday highlighted the need for, and potential economic benefits that would result from, Bahamian casino gaming reform.
Data produced by Mr Clinton showed that total Bahamian casino gaming gross revenues had fallen by more than one-third over the five years between 2007 and 2011, dropping from close to $220 million to around $145 million - a 34 per cent decline.
While this was undoubtedly influenced by the global recession, the bulk of the decline coming between 2008-2009, when there was a $50 million fall from $210 million to roughly $160 million, it also reflects the sector’s lack of competitiveness versus rival gaming destinations.
The decline in stopover visitors over that 2007-2011 period was nowhere near as sharp, Mr Clinton showed, producing comparisons between the Bahamas and rival gaming meccas to prove his point.
Comparing this nation to Singapore, Macau, Atlantic City, Las Vegas and Biloxi (Mississippi), Mr Clinton’s presentation showed the Bahamas’ generated the lowest revenue per casino of all in 2011 - just $48.691 million.
This figure was based on three operating casinos and total revenues of $146.073 million, yet Singapore’s two casinos were generating $2.222 billion per establishment that same year.
By the same yardstick, Macau’s 33 casinos were earning $1.076 billion in gross revenues per facility. And the figures for Atlantic City and Las Vegas were $296.5 million and $241 million respectively, with Biloxi standing at just shy of $100 million in gross revenues per casino.
And the Bahamas was shown as the only one of the six lacking an independent testing laboratory; private salons for VIP gamers; liberalised gaming credit; and the enforcement of gaming debt.
Yet Mr Clinton also hinted at the opportunity if the Bahamas got reform right, pointing out that 18 of the 25 wealthiest US counties were within an hour’s drive of an airport that has direct flights to Lynden Pindling International Airport (LPIA).
He added that some 163 million US residents lived within 1,000 miles of Nassau, and with 276 flights to the Bahamas per week - generating an annual direct seat capacity of 9.5 million - there was plenty of room to accommodate them.
Mr Clinton told Tribune Business that 34 per cent of US east coast gamblers, who regularly visited Atlantic City, travelled abroad “at least once a year” - creating a major market if the Bahamas could upgrade its product to capture them.
Although gaming was no longer confined to Atlantic City, with Florida, Pennsylvania, Massachusetts and Maryland all pushing into this market, Mr Clinton said the Bahamas - if it passed the potential reforms - would have “an advantage over all the east coast jurisdictions”.
This was because none of them are permitted to offer sports betting and wagering. Among the suggested changes is that the Bahamas permit ‘in-play’ or ‘mid-game’ sports betting, and Mr Clinton added: “We’d be the only legal gaming jurisdiction on the east coast with that form of sports betting.”
The Bahamian casino industry is also seeking reforms that permit hotel guests to gamble from anywhere on the resort campus, vis iphones and smart phones, and facilitate Internet gaming.
“These are major competitive advantages, and being so close to the US, we really have an advantage for people who would otherwise have limited gaming options,” Mr Clinton said.
And he pointed out that the Bahamas, located just a 30 minute jet flight from Miami, had the potential to provide a much close alternative gaming destination for Latin American gamblers, who frequent Las Vegas and Atlantic City.
“If we do have a compelling offering, we could see an uptick from Latin America, specifically Brazil and Argentina,” Mr Clinton told this newspaper.
While Baha Mar’s casino projections had not factored in the potential benefits from legislative reform, meaning it would “be fine in either case”, Mr Clinton said their enactment was vita for the industry to grow its profits, employment and tax revenues.
“Otherwise we’re trying to complete on a global scale with our hands tied behind our backs,” he told Tribune Business.
“This is one Bill, away from the issue of taxes, that can actually grow the economy.”
With the average stopover visitor spend estimated at $1,700, Mr Clinton said passing a Gaming Bill that incorporated all industry recommendations would boost annual tourist numbers by 200,000.
However, the extent of the economic impact will depend on exactly what reforms are considered and approved by Cabinet to go before Parliament.
“It really has the benefit of growing the economy, but we have yet to find out what it is,” Mr Clinton told Tribune Business.
“What is Cabinet considering? If it is what the industry put in, we will have a minimum of 200,000 new tourists. It’s one of the few opportunities you get from a legislative perspective to really drive the economy.”
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