Ever since Prime Minister Narendra Modi took the bold step to demonitise Rs 500 and Rs 1,000 notes, in Goa it is the casino industry that has suffered a major impact. In the absence of cash, some casinos have remained shut for two to three days. This is the pain that Modi was probably talking about and the fact that it is affecting gamblers, who had cash to spare before November 8, might come as a consolation to the middle class who have to brave the sun to withdraw money for domestic use. The sharp drop in clients is an indication of how dependent the casino industry is on hard cash and this in turn leaves it vulnerable to money laundering. It would not be incorrect to state that a portion of the cash used at casinos might come from doubtful sources.
Casinos, by virtue of their business, are vulnerable to money laundering. It might be interesting to state here that nearly 100 million dollars that was stolen from the Central Bank of Bangladesh was routed to casinos in the Philippines, after which is vanished into thin air, meaning there was no trace of the money. There is a reason why this happened. In 2013 the Philippines tightened its laws against money laundering. However, casinos owners persuaded the government to keep them out of the list as they claimed, tougher laws would affect their business. A US Congressional-Executive Commission on China Annual Report 2013 stated that a whopping $202 billion in ill-gotten funds are channeled through Macau each year and added that the enclave’s phenomenal success is based on a formula that facilitates if not encourages money laundering.
Even as the State Government, assisted by Union Defence Minister Manohar Parrikar embarks on a journey to turn Goa into a cashless economy, the question upper most in the mind is whether it has thought about casinos? Or will the government leave casinos out of the cashless endeavor, like the Philippines on grounds that it would affect their business? The government had a meeting with bankers on how to go ahead and a decision has been taken to start with market vendors. This tends to give one the impression that casinos might be let off the hook.
One of Prime Minister Narendra Modi’s objectives for launching the demonetising process was to deliver a knock-out punch to the black money system. If one assumes that a lot of black money is used for gambling activities in casinos, then Modi has succeeded in a small way. However, the process will get normalised if the infrastructure for creating black money and utilizing it is not demolished. Casinos are vulnerable and one of the ways is to force all gambling houses, onshore and off shore, to go cashless. Because if the government does not do this, it will leave itself open to the charge of not only encouraging the use of black money but also benefitting from it, by way of taxes. This could undermine Modi’s game plan.
