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A case for casinos
Tuesday, October 23, 2007
In March this year, the Seminole Tribe of Florida completed a US$965-million (euro738-million) purchase of the Hard Rock cafes, hotels, casinos and music memorabilia from the United Kingdom-based Rank Group PLC.
According to Mr Jim Allen, CEO of Seminole Gaming, the deal for Hard Rock International was composed of a US$525-million bond offering and a US$500-million equity contribution, less US$60 million for closing costs and working capital.
The deal marked the Seminoles' entry in the worldwide hospitality industry and basically gave their gaming operations a foothold in American states where gambling is legal.
The sale gave the Seminoles control of 124 Hard Rock Cafes, five Hard Rock Hotels, two Hard Rock Casino Hotels, two Hard Rock Live! concert venues and stakes in three unbranded hotels. It also gave the Indians a collection of rock 'n' roll memorabilia that includes 70,000 pieces, including guitars owned by legendary musicians Jimi Hendrix and Eric Clapton.
We recall that the Seminoles were the first Native American tribe to get into the business of casino gambling; and the Hard Rock deal, we have been told, represents the first purchase of a major international corporation by an American tribe.
Before they got involved in the gambling business, the Seminoles, whose members number approximately 3,300, were mired in poverty.
Now, more than 90 per cent of the tribe's budget, we have been told, is made up of gaming revenue, which stands at approximately US$500 million.
Each member of the tribe receives a monthly dividend from the gambling operations and revenue generated by the businesses is pumped into education, health care and other services.
After they signed the deal, the Seminoles announced that they had plans to increase the number of Hard Rock hotels to 15 in the next three to four years, a decision, we have no doubt, would further ensure the tribe's economic survival.
The Seminoles are not the only American Indian tribe to have invested in casino gambling and made themselves financially independent. However, we chose to highlight their experience as just one example of how a people with sharp business acumen and a determination to lift themselves out of penury took a bold decision and are today much better for doing so.
We raise the case of the Seminoles against the background of the re-emergence of the casino lobby here in Jamaica. The tourism minister, Mr Edmund Bartlett, it appears, is in support of the introduction of casino gambling, but seems to be a little hesitant to give a firm answer on the issue.
While we suspect that Mr Bartlett's hesitancy may be grounded in concern for the church's strident opposition to the introduction of casinos, we urge him and the Government to give the matter serious thought. For though, we admit, casinos are no panacea, they most certainly will attract more revenue and significantly enhance our tourism product.
Of course, the Government would have a responsibility to deal with the issue of problem gambling and ensure that mechanisms are in place to limit this problem, which exists in all jurisdictions that have legalised casino gambling.
The key, therefore, is finding the right balance, something which the Bahamas seems to have done successfully so far. We could learn a lot from them.
Tuesday, October 23, 2007
In March this year, the Seminole Tribe of Florida completed a US$965-million (euro738-million) purchase of the Hard Rock cafes, hotels, casinos and music memorabilia from the United Kingdom-based Rank Group PLC.
According to Mr Jim Allen, CEO of Seminole Gaming, the deal for Hard Rock International was composed of a US$525-million bond offering and a US$500-million equity contribution, less US$60 million for closing costs and working capital.
The deal marked the Seminoles' entry in the worldwide hospitality industry and basically gave their gaming operations a foothold in American states where gambling is legal.
The sale gave the Seminoles control of 124 Hard Rock Cafes, five Hard Rock Hotels, two Hard Rock Casino Hotels, two Hard Rock Live! concert venues and stakes in three unbranded hotels. It also gave the Indians a collection of rock 'n' roll memorabilia that includes 70,000 pieces, including guitars owned by legendary musicians Jimi Hendrix and Eric Clapton.
We recall that the Seminoles were the first Native American tribe to get into the business of casino gambling; and the Hard Rock deal, we have been told, represents the first purchase of a major international corporation by an American tribe.
Before they got involved in the gambling business, the Seminoles, whose members number approximately 3,300, were mired in poverty.
Now, more than 90 per cent of the tribe's budget, we have been told, is made up of gaming revenue, which stands at approximately US$500 million.
Each member of the tribe receives a monthly dividend from the gambling operations and revenue generated by the businesses is pumped into education, health care and other services.
After they signed the deal, the Seminoles announced that they had plans to increase the number of Hard Rock hotels to 15 in the next three to four years, a decision, we have no doubt, would further ensure the tribe's economic survival.
The Seminoles are not the only American Indian tribe to have invested in casino gambling and made themselves financially independent. However, we chose to highlight their experience as just one example of how a people with sharp business acumen and a determination to lift themselves out of penury took a bold decision and are today much better for doing so.
We raise the case of the Seminoles against the background of the re-emergence of the casino lobby here in Jamaica. The tourism minister, Mr Edmund Bartlett, it appears, is in support of the introduction of casino gambling, but seems to be a little hesitant to give a firm answer on the issue.
While we suspect that Mr Bartlett's hesitancy may be grounded in concern for the church's strident opposition to the introduction of casinos, we urge him and the Government to give the matter serious thought. For though, we admit, casinos are no panacea, they most certainly will attract more revenue and significantly enhance our tourism product.
Of course, the Government would have a responsibility to deal with the issue of problem gambling and ensure that mechanisms are in place to limit this problem, which exists in all jurisdictions that have legalised casino gambling.
The key, therefore, is finding the right balance, something which the Bahamas seems to have done successfully so far. We could learn a lot from them.