With Greek Cypriots allowed to cross to northern Cyprus for the first time in decades, attention has focused on the lure of Kyrenia’s casinos. But the sector hadn’t waited for Greek Cypriots to hit the big time, raking in the cash from Turkish gamblers feeding their addiction after Ankara clamped down on the mainland’s casinos.
By Gokhan Tezgor
THE RUSH and thrill of having a fortune tied up on one number on a roulette wheel or a draw of a single card runs in the blood of many in the Mediterranean and Levant.
So when Turkey closed its casinos down five years ago, it didn’t take long for tens of thousands of Turks suffering withdrawal symptoms to find solace in the haven for their habit in northern Cyprus.
And in spite of fears that gambling tourism would do little for the economy as a whole, enriching only underworld criminals and corrupt officials, the sector last year earned the Turkish Cypriot economy a cool 2.5 trillion Turkish lira (approximately $1.6 million) in income tax and two trillion TL ($1.3 million) in employee taxes, according to Turkish Cypriot tax department director Hudeverdi Ekemen.
Add to that the peripherals in terms of food and drink consumed by gamblers and family members spending money away from the roulette table and you realise the handful of Greek Cypriots racing to the casinos in the last month is just a drop in the ocean.
For the January to April quarter, Ekemen estimated the sector had earned a cumulative revenue of to two trillion TL ($1.3 million).
When the casino trade transferred to northern Cyprus after they were banned in Turkey in 1998, many Turkish Cypriots feared the crime and corruption that had characterised the industry on the mainland would simply hop on the boat to Cyprus. The 1996 gangland murder of ‘casino king’ Omer Lutfi Topal, just months after he picked up the Jasmine Court Hotel in Kyrenia from Turkish Cypriot businessman Asil Nadir, seemed an ominous portent of things to come.
What’s more, many feared there would be little knock-on benefit for the broader economy.
“What is the benefit of having gamblers on the island?” was the common complaint. “They eat and drink at the hotels, they gamble all night, sleep all day. They don’t leave their hotels.”
But the first indicator of economic prosperity from casino tourism was when taxi drivers began replacing their quarter century-old Mercs with newer, more luxurious models.
Gamblers were going out — and a lot. Businesses saw boosted sales, as the bored relatives of gamblers hit the shops. Restaurants had increased bookings.
One food and beverage manager at a Kyrenia area hotel and casino said: “No one has the right to criticise casinos for not earning the country money.
“We buy up to $10,000 worth of alcohol for a weekend casino group, we buy produce and meat to feed them. Who do we buy all this from? Local distributors of course.”
Huseyin Gokboru, manager of the Turkish Cypriot Tourism ‘Ministry’, said the 21 casinos in the north paid $2,961,290 for their annual licences.
The cost of licences varies according to the number of slot machines and live gaming tables in each casino. The average casino pays about $130,000-$150,000 a year for its licence, though one last year paid as much as $205,000.
Moreover, he added that average occupancy rates for hotels with casinos in 2002 was 46 per cent, while hotels without casinos had just 29.4 per cent occupancy rates.
Turkish Cypriot Hoteliers Association president Turhan Beydagli admitted there were considerable spin-offs from the gambling craze: “Casinos as a hotel facility do provide a direct benefit to the tourism industry. At the end of the day, if casinos can fill planes and hotel rooms there is no reason for them not to be a boost.
“We support the casino industry if a casino is a facility of the hotel, but we do not support the industry if the hotel is a facility of the casino just to put up gamblers,” he added.
Beydagli added the tourism industry in the north had little to gain if the primary goal was to bring junkets over for three days, with guests just going from their rooms to the casino and spending all their time gambling.
“Keeping people at the roulette wheel during their whole stay does not inject them into the rest of the country as a tourist,” said Beydagli.
But the tax department’s Ekemen said this was not the case: “The revenues generated by the casino sector go beyond just what is paid for in taxes; casinos have a multi-faceted affect on the economy,” said Ekemen.
“Casino guests have to eat, drink and be transported, and these are all supplementary boosts to the economy,” he added.
And Beydagli admitted that the doubters had on the whole been proved wrong: “There have been arguments in the past that casinos have no benefits for the Turkish Cypriot economy, but at the end of the day when a casino guest arrives in the country, the hotels have to make purchases from local food distributors and drink distributors.
“In addition, casinos pay taxes, they pay for work permits for their employees, utilities, etc, so there is a direct benefit.”
Ekemen agreed: “The casinos have become an organised sector that has a direct benefit for the economy.”
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
