Panaji: Goa is the only Indian state that permits gambling aside from state lotteries and horse racing. It has five ‘offshore’ casinos — basically ships anchored at the mouth of the river Mandovi — and another nine in five-star resorts.
The on-shore and off-shore casinos between them employ over 8000 people, according to industry sources. Aside from the jobs created in the State, they pay annual renewals fee of around ₹50 crore to the licensing authority, Goa’s Home Department, according to R.K. Srivatsava, who is both Chief Secretary and Home Secretary. In addition, Deepak Bandekar, Commissioner for Commercial Taxes says, the casinos also give the government revenue of nearly ₹130 crore a year through various commercial taxes, predominantly the entertainment tax which includes entry fees. He says that tax collections until October had shown a growth of almost 20 per cent as compared to previous year. This year, the state raised the price of entry tickets, from ₹700 to ₹1,000, which could have meant an easy further increase in tax revenue.
This now seems unlikely. According to sources in the industry, there will be a drop in takings because as the peak tourist season was about to commence, the Prime Minister made his demonetisation announcement.
In the weeks immediately following November 8, all the casinos were severely hit. “We are not an essential service,” says Srinivas Nayak of Casino Pride which runs four of the five casinos. “Ours is a leisure industry. Operations are based on disposable income and exchange of currency in cash, so there were hardly any customers till some cash became available in banks. The shortage also meant we were facing a problem in giving change.” Mr. Nayak says that more than a month-and-a-half since demonetisation, the position has not much improved. “ The government said they would relax the cash norms; that has not happened at all. You can imagine the situation when we are at the peak season of Christmas and New year. As it is this year because the year-end is without two of the Electronic Dance Music (EDM) festivals, the footfalls are terribly down.”
While some employees of casino companies told The Hindu that ‘reviews of human resources’ (i.e., impending shut-downs and lay-offs) had begun, Mr. Nayak says that while there have been no fresh recruitments this year — as usually happens during tourist season — no casino has retrenched anybody so far, and it wouldn’t make sense to do so. “Employees for us are like our family. It is emotional issue, not necessarily business. Our group itself has nearly 3500 employees. We have borne the difficulties and we have not cut any staff. But yes, the issue was discussed, and if business is still not normal after, say, January, the option is open and, well, managements will have to take a call.”
Narinder Punj of Casino Strike at Grand Hyatt in Bambolim, North Goa, is far more pessimistic. He said that with established casinos like Delta or Pride, the pressures would be different, but for Strike, which started operations in July this year, it looks dismal. “We have been dramatically affected by demonetisation. The business depends on our cash-flow to pay the customers. Unless government implements its promise of relaxing cash availability norms, I am afraid, we may come to thinking of closing the casino.” Mr. Punj says that Strike has already sent around 40 per cent of their staff on unpaid leave, and cash did not become freely available soon, retrenchment is inevitable. Mr. Bandekar told The Hindu on Tuesday that though the real impact of demonetisation would be known when the casinos deposit their entertainment tax for November in State treasury on December 31, "they have already informed us that they are hit by the demonetisation."
Government sources agree that revenues will fall. An official in the State’s Commercial Taxes department, who asked not be named, say that even the increase in entry fees, which would have meant a sure increase in revenue, is now likely to fail. Even Goa’s Chief Minister, Laxmikant Parsekar, who has not hesitated to say that his government relies on revenue from casinos, admitted recently that they were likely to get affected by the demonetisation decision.
Goa’s casinos are facing other pressures too. On December 15 Chief Election Commissioner, Nasim Zaidi, while on visit to Goa to review the election preparations for the upcoming state Assembly polls, had expressed serious concern about the possibility of casinos being misused for stashing and diverting of illicit funds, especially in view of the state heading for elections early in 2017. Responding to reporters, Chief Minister Laxmikant Parsekar said on December 16 that he had directed Director General of Police Muktesh Chandar to keep a watch on the industry.
