Crockwell: gaming dispute 'not helpful' | The Royal Gazette:Bermuda News


Casino Gaming was introduced by Premier Brown, back in 2010 and 2011; as an important amenity to increase Island tourism. In 2014, a study by the Innovations Company, projected that casino gaming would increase visitor arrivals by 43,000, and casinos would win $50 million in the first year; based on the Islands 10,000 rooms (a number I find difficult to reach).

In 2014, Tourism Minister Crockwell, indicted his Committee was looking at Singapore and Aruba as models for Bermuda to follow. Aruba, and possibly Puerto Rico and the Bahamas are more appropriate models, where casinos are important amenities, but not major profit generators like in Singapore. Singapore has a population of around 5 million, with over 80 percent ethnic Chinese, (that are big bettors at the game of Baccarat). There two casinos, backed by 40,000 hotel rooms, one of Asia's busiest airports and a light rail system that covers the Island, the airport and the two casinos; produce a casino win of over $4 billion annually, at 2 destination resorts, each that cost multi $billions to built; by the Las Vegas Sands and Genting. The Bahamas, has a destination resort on Paradise Island, now known as Atlantis; with 4,000 rooms, but when we opened the Paradise casino, in 1967, we had a 10 year gaming monopoly, which included Nassau. And back then, our only North American competition was in Nevada, so the casino attracted many customers, that came just for the casino gambling. Now with gaming convenient in the North East, parts of the South, Canada and the Midwest; casino gaming in Bermuda will primarily be an added attraction for evening entertainment. However for customers that expect to have casino games available at their resort destinations, it puts your Island on equal footing with other resorts; except for Florida and Caribbean Winter weather.

I still question Bermuda's decision to allow 3 casinos, one of which is in St George's, inconvenient to the majority of Island resorts; where only 236 rooms are proposed; and replacing a resort with 600 rooms.

With an annual hotel occupancy around 60% and an average room rate of over $300, Bermuda will continue to make its money from the hotel; as the Strip in Las Vegas now does. There the 23 largest properties, make 73 percent of their profits from the hotel (40 percent), restaurants and bars (13 percent), the convention department (20 percent) and only 27% from the casino; that at one time produced all of the profit. But with the new dependence of the convention trades, that fill the harder to sell mid-week nights; these resorts enjoy a 92.1% occupancy and an average room rate of $163.

I understand that Bermuda wants a new destination resort, with golf, spas, shows, multiple restaurants and convention facilities. But, even with a 10 percent casino tax rate, I can't see any casino company making that kind of investment today. And with the low occupancies at the existing visitor accommodations, Bermuda may be better off adding a casino to one of the larger existing resorts, possibly with the addition of a show room, that could offer a nightly review type performance; to attract customers from the other hotels and from the cruise passengers.

Even if the St. George's resort, won the same per day as the larger Strip casino resorts, offering multiple shows, lounges, restaurants, spas, and convention facilities; it would only win $10 million a year, based on current occupancies, and the win would more likely be $5 million or less. If Innovations was actually assuming Bermuda has 10,000 rooms, at 60% occupancy, $50 million is achievable, but I still have trouble finding over 3,000 accommodations.

There is no question that the addition of one or two casinos is in the best interest for Bermuda tourism; but I find it difficult to believe that a major gaming company, will invest in a true destination resort.

Richard Schuetz doesn't deserve the, politically motivated, negativism, that should actually be directed at previous tourism and Legislative leaders. I have worked with Richard on two occasions, at Nevada casino resorts; and his knowledge of the industry, initially in marketing and more recently in casino oversight, are outstanding.