The Legislature will have to amend the the V.I. Casino and Resort Control Act in order for the territory’s first casino to open by the middle of December, according to Eileen Petersen, chairwoman of the Casino Control Commission.
At Tuesday’s Senate Finance Committee budget hearings, Petersen told members that V.I. law states that six months prior to the time the CCC issues its first casino license, training must be provided to workers, 80 percent of whom must be V.I. residents. Legalized gaming is not supposed to be allowed until that occurs.
Because the opening of the government’s casino training school has been postponed until Sept. 15 and the casino portion of the Divi Carina Bay Resort on St. Croix is set to open sometime in December, Petersen said the law must be amended to allow for only three months of training.
"If training isn’t completed the casino won’t be allowed to open," Petersen said, adding that she notified Government House of the problem in June. "The coming three months are critical."
In a Sept. 2 letter to Petersen, the attorney for the resort and casino, Scott Redman, noted the need for an amendment so gaming can begin in December.
"We are concerned that notwithstanding our efforts to open the casino in December, the casino laws and regulations themselves may create an obstacle due to the late opening of the casino school," Redman wrote. "Appropriate amendments to the school-related timing requirements would appear to be needed to allow a timely opening of the first casino."
Committee chairwoman Sen. Lorraine Berry said the amendment would be offered at the next scheduled session of the Senate. A member of Senate President Vargrave Richards’ staff, however, was unsure of when the body would meet next because of the budget hearings.
Meanwhile, under Gov. Charles Turnbull’s revised budget the CCC is looking at a cut of more than 50 percent. The CCC is requesting approximately $1.4 million for fiscal year 2000 while the governor allotted $690,000. A 15 percent cut, which the governor is calling on all government department’s to implement, would place the commission’s budget at approximately $1.2 million.
When asked by Sen. George Goodwin how the commission would survive after a 50 percent cut, Petersen’s response was frank.
"We would have no regulation of the casino industry," she said.
Yet another problem in the commission’s regulation of casinos is the lack of funding for casino inspectors. Petersen said that instead of filling two of the three vacant slots on the five-member commission, the $160,000 savings should be used to hire two or three casino inspectors.
Currently, the commission has only two of five members serving. A third individual who would establish a quorum, Lloyd McAlpin, has been nominated by the governor but is not yet approved by the Legislature.
"The Casino Control Commission believes it can survive with a three-member commission," Petersen said. "It’s better to have three members full time than a five members part time."
Sen. Gregory Bennerson, however, said he was concerned about the proposed salaries for the casino inspectors — $30,000 a year — and for a $45,000 audit inspector position. He said that in a million-dollar industry underpaid regulators could be tempted to illegally supplement their incomes.
The Legislature’s Post Auditor, Campbell Malone, said casino auditing is a specialty that fetches a salary of at least $100,000 a year.
Despite the challenges facing the commission, Petersen said she anticipates processing at least two casino-hotel applications within the next 60 days. Should the two applicants receive licenses, Petersen said, they would conservatively generate approximately $1.2 million in gross revenue taxes a year for the government.
In addition to tax revenue, Petersen said that between 700 and 900 employees would be needed to staff the two anticipated casino-hotels.
