Politicos please don’t kill this labour intensive industry in Goa

On March 1st 2010, just gone by, 155 Days or 22 Weeks and 1 Day were completed since the 900 percent increase in the casino entry fee was imposed. When on September 1st 2009, the decision to hike the entry fee from Rs 200 to Rs 2000 came into effect the Digambar Kamat Government had two objectives 1) discouraging local youth from visiting casinos and 2) reaping additional revenue of Rs 36.50 crores annually.

On the face this so called 'social step' by the Kamat government looked credible but it was completely fragile as it is today bleeding the casino business. Forget about locals even tourists be it a domestic or an international are today reluctant to visit a casino by paying an entry fee of 2K. For example let's say a family of five adults on a visit to Goa, plans to visit a casino. This group now has to pay ten thousand rupees only as entry fee. Well this is preposterous for a family to pay ten thousand rupees only to gain entry in a casino. The same money could be spent by this family for their entire stay of 4 days in Goa.

Of late there have been many reports in the media about the increase in the revenue due to the increase in the entry fee "Revenue generated by casino entry fees has gone up: CM", "Over two and half fold increase in collection of casino entry fees".

These reports have compared the collection of 8 casinos operating in April 2008 to 13 casinos operational as on date of which 4 are offshore. Inspite of the uneven comparison and a ten fold increase in the entry fee these statistics show only 2.5 times increase in revenue collection. The aforementioned figures show that there is a reduction of 75 % in the number of tourists visiting the casinos.

Yes, the harmful indicator of the drastic increase in the entry fee can be gauged from the reduced number of entry tickets sold. The figures available from Commercial Tax Department indicates that when the ticket price was Rs 200 between June and August 2009, 90000 tickets were sold whereas in the period September to December 2009 only 15,685 tickets were sold when the entry fee was raised to Rs 2000. If we talk about the sale of entry tickets only by the casinos of South Goa, it has dwindled considerably from around 50 tickets sold per day before the hike to around 5 tickets per day after the hike.

The less number of guests means less consumption of food and beverages which directly means less collection of VAT. Incidentally, VAT on food and beverage is charged at 12.5 percent and 20 percent respectively. Similarly it will result in the reduction of Entertainment Tax paid to the Government. By the way, casinos have to pay 10% of their collection as Entertainment tax.

Likewise it has also meant a reduction in the business for taxis. When tourists visit casinos, they normally use chauffeur driven cabs.
However the worst sufferer of this staggering increase will be the employees. With drastic fall of visitors all the Goa casinos are incurring huge losses and few of them have already stopped operations and many are in the process of curtailing their expenses by downsizing payrolls.

It is important to remember that Casinos be it an onshore or offshore are a highly labour intensive sector of the economy. They provide good job opportunities to those who lack higher educational qualification. Casinos can indeed reverse the trend of Goans going overseas to earn a better livelihood. For example a salary of an average dealer (inclusive of the tips and other perks) is between Rs. 20,000 to Rs 30,000. Due their inherent attributes of possessing pleasing personality and command over English language a career in the casino is tailor made for the Goan youth.
In addition each casino is a significant user of local services. To name a few the business sectors accruing great advantages are hotels, food and beverage supply, cleaning services, electronics and telecommunications, advertising, maintenance, equipment repair and so forth.

We need to remind ourselves why the government gave permission to start casinos in Goa in the first place. Casinos did not come into Goa on their own. Rather they were invited and encouraged by the State Government to set up shop in Goa. It is worth noting that casinos are the single most important component of tourism that invites repeat business both for itself, hotels and the other related aspects of tourism.