Citing a study that concluded that legalizing slots in places other than casinos could represent multimillion losses for the industry and the government, as well as the elimination of hundreds of jobs, the Puerto Rico Hotel and Tourism Association blasted Tuesday a proposal by Rep. Rafael “Tatito” Hernández to get those machines online.
During a news conference Tuesday, PRHTA officials warned the proposal would create a “ghetto of highly addictive games in communities where they are located.”
“It is highly damaging, a bad recycled idea, a dangerous bet in which the big losers will be the tourism sector, the Tourism Company’s budget, and Puerto Rico. It will eventually exacerbate the fiscal crisis facing the government,” said PRHTA Chairman Ismael Vega.
Basically, the trade group reacted to the lawmaker’s push to legalize thousands of slots machines that have popped up in makeshift gaming rooms, unauthorized hotels, restaurants, mom-and-pop stores, as well as grocery stores.
The problem behind the proliferation of such adult entertainment machines is that thousands of them are not authorized by the Treasury Department, so they are neither monitored nor obligated to contribute to the government’s coffers.Illegal gambling halls are taking a bite out of the highly regulated casino industry, execs say. (Credit: © Mauricio Pascual)
In Puerto Rico, slot machines are only legally allowed inside hotels, which are highly regulated by several government agencies. In fiscal 2012, island casinos generated $156 million in revenue that was split between the General Fund, the University of Puerto Rico and the Tourism Company.
The bone of contention
Earlier this year, the head of the Puerto Rican Commercial Recreation Businesses Inc., Pablo Rivera-Corraliza, said connecting and regulating gambling halls to Treasury’s system would create 5,000 jobs as new operators emerged.
However, the PRHTA said legalizing just 20,000 of gambling hall slots would cut hotel casino revenue by between $68.4 million and $148.8 million and jeopardize nearly 1,000 jobs. Furthermore, approving gambling hall machines could slash the UPR’s funding by $26.9 million, while the General Fund would stand to receive $9 million less, the trade group warned.
“This proposal plays with funds to promote to Puerto Rico to bring more tourists, tourists who buy airline or cruise tickets, stay in hotels and inns, take a taxi or rent a car, eat in our restaurants, shop in our malls , visit our attractions like Toro Verde or spend a few days in Vieques or Culebra,” said Clarisa Jiménez, president of the PRHTA. “Make no mistake, threatening casinos is threatening thousands of jobs in the economic development chain that tourism represents.”