Seems like it's a done deal that VLT's are coming to town. Senator James has the Bill, the Governor and Senators need the Tax Revenues in order to fund pet projects and as the Global recession deepens the revenues may be needed to keep government employees paid for one more day. Still, the question remains who else will it help and who will it hurt.

There have been several websites supporting VLT's in St. Croix such as the former crucianvlt.com and thanksvlts.com. Both of these have secrete registrations so it's impossible to know who is funding these puff pieces in favor of VLT's. A pretty good guess would be Southland Gaming as they make more in profit each year off of St. Thomas VLT's than the Government gets in taxes and since they have virtually no expenses other than “charitable donations” to the select few on their list they have the most to gain of any of the stakeholders.

The big push on these web sites is that small businesses are being locked out of gaming profits and in our bad economy, they are going broke because Divi is sending all their profits to Mississippi. Of course they don't mention that all of Southland's profits are going to North Carolina to create jobs in Mr Huckabee's home state and his business activities in South Carolina employ hundreds more in his native state than he has in the Virgin Islands. This is truly a North Carolina empire created and built on the St. Thomas Gambling addiction.

On the original site, crucianvlt.com, several businesses were identified. In addition, other small businesses owners haqve expressed interest in becoming gaming centers if the law passed. The list includes Pier 69, 2 Plus 2, Gertrude's, Oscars, The Sand Bar and other restaurants and Hotels that lease or own large open spaces that are under utilized because of the bad economy. This web site has been shut down and only one supporting local business, Gertrude's, is identified as supporting VLT's on the new secret web site, thanksvlts.com.

One possible reason is of course the last Gubernatorial election where many of the proponents of VLT's (because of the bad economy of St. Croix) were also in favor of the Mapp-Sekou Team for the same reason. I cannot envision these small businesses who were considered “enemies of the state” by Supporters of Dejongh-Francis being rewarded for there revolt against the administration. I don't know whether the disenfranchisement of St. Croix Businesses will be done legally in the bill or administratively by Southland and the Virgin Islands Lottery Commission but I simply can't conceive of poorer Friends of Ken Mapp sharing in the pie when there are so many rich St. Thomian's who want even more money and perhaps even deserve it as payback for the financial support of the Governor in the last election.

So any change in the law will deliver more tax revenues to the Government and more wealth will be retained locally even if it's all retained by St. Thomas interests. Naturally, Robert Huckabee. will get his share but once again this will be initially at the expense of Treasure Bay and the state of Mississippi and in truth the poor business people who spearheaded this effort will be no worse off even if they get no benefits at all.

The only people who will really be hurt are the 300 employees of Treasure Bay and Divi who will lose their jobs. Currently, Divi has gross profits around $25 million with the government share being about $4 million. In addition, Treasure Bay directly employes 150, and pays Divi about $4 million a year in rent. Without that $4 million, Divi Hotel and Resort would not be able to stay open. Since the casino profits are 93% local, there was no reason for either Divi or Treasure Bay to ever make a major investment in advertising and develop a loyal stateside following. Comparable stateside casinos would be spending up to $10 million a year on advertising to remain competitive. So if the casino is squeezed by all the gaming centers, Divi and Treasure Bay would have to make a major investment in advertising and with the global economy the way it is, that would be highly unlikely.

In the long run Treasure Bay Casino will survive and become even more profitable because of fewer employees, less rent and fewer losses from Table games. Slot machines are extremely profitable because only one technician is needed to keep them going and and Table Games are high risk. If a dealer does not remember all of the rules and guidelines of Blackjack, the player has the edge. The more a dealer has problems with math, the more a player has an edge because no one protests when they are handed too much money and in the end, one dealer can only handle 2 – 5 players so payroll is much higher with the risky table games.

The Racino bill which nobody really wanted, not even the horsemen, was pushed through by Senator Nevile James to help his friends at Treasure Bay and his friend Dennis Brow. This is an all slot machine entertainment center no matter what it is called. With only a couple of employees, no rent and no losses from Table games, this will be a highly profitable operation. Since support for the horsemen is paid for by the government revenues it behooves them to push for more race days so they would be even more profitable.

Unfortunately, the loss of $4 million to Divi would cause the hotel to close and 300 people would be out of work. This analysis does not include the potential for increased casual gambling when there are slot machines in every, bar, restaurant, hotel and rum shop as Mr. Huckleberry personally told me is his business model. I doubt that the Legislature can or will do anything to regulate this industry. A simple sentence in the racino law mandating that the operator of the racino must operate a hotel casino on the same island would have kept the Divi Hotel open but none of the Senators who voted for the Bill nor the Governor who signed it cared enough to try and preserve the 300 jobs at Treasure Bay and Divi.

Increased gambling because of greater opportunity, and local availability will not stimulate the economy and the opposite is true as churches, painters, yard care workers and others loose support because more money is spent at gaming centers and less on other personal items purchased from locals. Charities will suffer even more then they have in the past few years and it will be harder for students to solicit money for class projects and athletic teams. .

Those who know me understand that I am not opposed to gambling, I am opposed to stupid laws that exploit people without community benefit. In the early days of Las Vegas, it was the only state in the Nation which allowed legalized gambling so indeed “what happened in Vegas stayed in Vegas”, especially the money because there was no other place for the owners to invest in the industry which was making them rich. They spent their profits on new Hotels, Convention Centers and Advertising. The same was true of Indian Reservation Gaming where it is a little know fact that profits from Reservation must be distributed among tribe members or reinvested in the community.

One of the humorous aspects is the VLT's are being touted as part of the American Free Enterprise System to allow locals to compete with Divi while giving exclusive control to Southland at their current Tax rates,. The logical extension to the American Free Enterprise system would be to call them slot machines, have the industry regulated by the Casino Control Commission and call for proposals from legitimate Machine Vendors and Manufacturers to give the maximum revenues to the Government and and train and fund Local Businesses Owners who are duly licensed to host the machines with perhaps five distributed locations thorough out the island instead of in all 164 rum shops. The Owners would be selected on the basis of the percentage of proposed community reinvestment in unrelated businesses, the amount they are investing, and the number of jobs they create.

Oh well it's an idle dream as I have learned to expect that a well funded bad option will always be selected over wisdom when it comes to private interest laws.