With political infighting threatening to derail Bermuda’s pursuit of a destination casino industry, a prominent American regulatory expert has stepped up to defend the island nation’s fledgling Gaming Commission.
Kevin Mullally, who heads government relations for Gaming Laboratories International, said the self-governing British territory?a tiny, tourism-dependent nation about 600 miles east of the Carolinas?could support a “world-class” gaming model.
Bermuda possesses “all the attractive tourism components that one would look for in a place to build a gaming resort.”
Mullally, a consultant with the embattled Bermuda Gaming Commission, added that he has “great respect” for the commission’s members, led by veteran California regulator Richard Schuetz as executive director.
The government sees tourism as vital to the well being of the island’s economy. Junior Tourism Minister Kenneth Bascome stated recently that improving the health of the industry is a “national imperative.”
To that end, the Gaming Commission, working with the Bermuda Tourism Authority, has its sights set on a major mixed-use development consisting of luxury residences and a casino hotel proposed by resort giant St. Regis. The project has yet to break down, however, and progress has been slow, sparking complaints from at least two prominent parliamentarians that the commission has failed in its mission.
MP Mark Pettingill has said the body deserves a “zero” for its work in “advancing the gaming product in Bermuda.”
Another outspoken critic, MP Shawn Crockwell, who formerly served as Minister of Tourism and Transport, has repeatedly accused the government of misinforming the House of Assembly about its discussions with prospective casino operators over gaming fees and other key issues.
Last week, Commission Chairman Alan Dunch rose to the defense of the body, saying its critics are “ill-informed.”
“Whilst unfortunate, this is not entirely unexpected,” he said, “given the general lack of in-depth understanding on what is involved in creating a gaming industry from scratch and the natural tendency of people to be impatient.”
He said the commission, founded two years ago with the passage of the Casino Gaming Act of 2014, is dedicated to “getting on with the task of creating this new industry as expeditiously as we can.”
“The commission has spent months working closely with the Bermuda College, many of the island’s accounting companies, the faith community, the recovery community, the legal community, the charities community, and numerous other segments of Bermudian society to ensure gaming is properly introduced and integrated,” he said. “We have sought help from the New Jersey Division of Gaming Enforcement, the UK Gambling Commission, the Governor’s Office, the U.S. Consulate, the Nevada Gaming Control Board and numerous other governmental groups. Bermuda’s Financial Intelligence Agency, National Anti-Money Laundering Committee, and the Bermuda Police Service have also collaborated with us.”
Mullally has blamed delays in vetting developers and granting licenses to the fact that the Gaming Act has required extensive revisions. Yet, despite this, the commission had made “very substantial progress” in deciding “what types of projects would best fit Bermuda,” he said.
“If the commission’s recommendations for rules can be adopted quickly, the more visible work of the commission can begin,” he said.
Former casino executive and now gaming consultant Steve Norton says Bermuda is well positioned to create resorts where gaming is an amenity, but not the major draw.
“Bermuda’s primary visitor now comes from the Eastern U.S. and Canada, that all have casino gaming nearby,” Norton says. “Therefore your visitors, may prefer a resort that offers gaming; but that will no longer the primary reason for the trip. Your visitor will be coming for an island vacation; to enjoy the beach, sun and sand, and the wonderful experience that Bermuda provides. So the addition to casino gaming is primarily providing evening entertainment, and putting you on equal footing with competitive island destinations that already provide casino and various types of musical shows and entertainment.”
He says unless VIP operators are allowed in, the revenue from gaming is going to be limited.
“Without junket type programs,” Norton says, “I would expect the best a 500 room casino hotel could win, is in the neighborhood of $7 to $14 million, from their own guests; plus persons staying at nearby resorts. That is based on a 70 percent occupancy winning from $75 to $150 per occupied room night.
And he says complaints from politicians that the multi-million fees required to obtain a casino license are overblown.
“For Bermuda, the actual win tax rate is much more critical, to potential developers and operators; than a one time fee,” says Norton.
