Government to Casinos: Just Deal With It

May 9, 2008

The official government response this week to casino industry warnings of a potential loss of 3,000 jobs was rather dismissive: Tough bounce. Casinos are illegally open 24 hours, anyway.

“There was no law that authorized casinos to operate during the day,” said Vice President Laura Chinchilla. “If (a 24-hour schedule) had existed by law, we wouldn’t have been able to change it by decree.” President Oscar Arias’ administration issued decrees last month that will force casinos to operate on a more limited schedule, from 6 p.m. to 2 a.m.

Currently, casino operators open shop at their own whim. Rafael Vargas, president of the Costa Rican Casino Association, said the betting havens are open anywhere from 18 to 24 hours. No one ever had a problem with the schedules in the past.

“It’s been this way up until now,”Vargas said.

The government’s decree has yet to see the light of day. Chinchilla, who led the regulatory commission, said she hopes it will soon be published in the government weekly newspaper, La Gaceta, at which point it becomes law.

Largely mimicking legislation that has been kicking around the Legislative Assembly for eight years, the decree would require casinos to be located in hotels of at least four stars with a minimum of 60 rooms.

Casinos would be allowed a maximum of 10 tables and 60 gaming machines.

Independent street

entrances would also be forbidden.

However, the decree differs greatly from the stalled legislation, which would set hours from noon to 6 a.m. Chinchilla said casino operators have taken the noon-to-6 a.m. schedule as the new standard.

Jorge Hidalgo, vice president of the association and executive president of Casinos Concorde Costa Rica, said he is “98 percent” in favor of the decree.

But he is 100 percent against the new hours. Casinos typically operate with 80-100 employees over two shifts, Hidalgo explained. Working under the new eighthour day, managers would require only one shift of employees.

Hidalgo estimated the industry would have to slough 3,000 jobs across 38 casinos to abide by the new regulations. That number could reach up to 12,000, if industries tied to casinos are factored in.

David Pirie is also concerned about the new schedule. The marketing manager for The Thunderbird Group in Costa Rica estimates the company would have to cut 600 employees from their nine casinos – including the Fiesta and Lucky’s chains.

“We will comply with what the law says,” Pirie said. “If we have to cut (jobs), we will.”

Hidalgo hopes the Arias administration will reconsider schedule changes and realize the gravity of the situation. If the hours are cut, he believes bettors would turn to other venues, such as the Internet and illegal, backalley gambling dens.

“There is a demand (for longer hours),” Hidalgo said.

All except one of Costa Rica’s casinos would fall within the new guidelines, Hidalgo said. Under the decree, the Horseshoe Casino, located kitty-corner from the Hotel and Casino Del Rey in downtown San José, would be illegal because it is not part of a hotel.

“I think that (the government) wouldn’t be able to apply the decree retroactively,” he said.

Any new casinos trying to shoulder into the mix would have to face the tougher guidelines.

Russian casino enterprise Storm International announced in February its plans to remodel a 3,500-square-meter building in San José – complete with 10 tables, 170 slots and 60 hotel rooms – in July 2008. Total investment was estimated at $5 million.

The new regulations are thought to be a response to Storm’s plans.

“Unfortunately we do not give any comments on Costa Rican gaming now,” wrote Lavrenty Gubin, a Storm press representative, in an e-mail this week.

 

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