We’re taking a huge gamble with plans for supercasino complex

By Matt Cooper

Friday, June 17, 2011

IT LOOKS like we never learn in this country, no matter what. What other country grants planning permission for a €460 million development that depends for its financial success on the inclusion of something that is not legal?

What other country decides that the location for this venture, if things happens to make its centrepiece legal, is suitable when it falls outside the terms of the national strategy for the proper use of land and when an assigned and qualified planning inspector makes an explicit recommendation against granting permission?

What other country would give approval for the construction of a mass of tourist facilities, other than the illegal one, when we already have a surplus of those, and when the State has had to take possession of an enormous number of them at an enormous financial cost?

I’ve banged on about the Tipperary project for Two-Mile-Borris in this column a couple of times before but its progress towards actually happening has been stunning. This week it received planning permission from An Bord Pleanala for construction of nearly all elements bar the 15,000 seat concert venue. All that is needed now is a change by the Government to the gaming laws, to allow for the operation of a large-scale casino and the project would be in an excellent position to begin construction.

The pressure on the Government from local interests in Tipperary to make the necessary change to the gambling laws to allow for a casino licence is likely to be immense. North Tipperary County Council, which granted the original permission that An Bord Pleanala confirmed subject to conditions, must be delighted at the potential levies it can collect and the commercial rates. The people of Tipperary North — where unemployment and emigration is a scourge, just like in the rest of the country, must love the idea of potentially 1,000 jobs during three years of construction — assuming the hiring is done locally — and hopefully another 2,000 jobs afterwards.

What’s not there to love about the idea of massive new 500-room hotel, a golf course, an all-weather horse racing track, retail shops and a replica of the White House? And why object, if the owners of the complex are willing to do this without seeking any state funds, or even bank loans from Irish-owned banks? Where is the risk, compared to the upside?

Well are here just some of the reasons: All around the country, NAMA and/or bank receivers are in control of hotels and golf courses; the hotels are undercutting competitors to stay open but there is massive surplus capacity and the golf clubs do not have sufficient numbers of paying members to cover overheads; Horse Racing Ireland is believed to be thinking of shutting courses because they cannot pay their way and shopping is no longer the national pastime.

What happens if the thing is a failure? Who will maintain it? What would the country do with another white elephant, this time in the middle of a rural area? And how would we define "success"? The State might take a massive cut, through charging for the licence and taking a percentage of whatever revenues are gambled, but what about the social damage caused to those who lose enormous sums of money, as will happen? It is a matter of personal choice what people do with their money of course but it is well known that casinos are central to the development of gambling addictions. With many people financially ruined, do we want to give them even greater temptation to make things worse? Or do we say that it’s only for the tourists? If the State had regulated the provision of finance in the past decade — stopping the ready availability of loans for gambling on property and on the stock market — then the banks would not have been ruined and individuals and companies destroyed with them, and the nation’s finances too. People and institutions were allowed to gamble money that they didn’t have and the State, having turned a blind eye, is now being required to pick up the tab.

This project can only work if its driver, the former garda turned property speculator and amusement arcade owner Richard Quirke, gets the licence for the super casino; it would be the cash cow for the entire project, subsidising other parts of the operation and providing the money to repay the loans and dividends for whatever other rich investors he attracts.

But this is very important. Who would end up making the profits? Who would these investors be? Who, if they were to get a licence, would be given an opportunity to almost print money?

It is not always the case either that all such ventures are successful. If you want proof then all you have to do is look at the Chinese city of Macau and look at how the Irish state is now the co-owner of a major gambling emporium there that is not doing too well.

The State has an interest there courtesy of Sean FitzPatrick, the disgraced architect of Anglo Irish Bank’s implosion, for which Irish taxpayers are stumping up €29.4 billion to cover his reckless gambles. FitzPatrick is one of the co-owners of Fisherman’s Wharf, a restaurant and casino. It was one of these "can’t lose" bets he made. Macau is the only city in China where legalised gambling is allowed, but there has been in such chaos since China took possession of the city in 1999 that a major crackdown has been enacted to limit people’s ability to "play" at venues such as FitzPatrick’s.

The venture has been nowhere near as lucrative as expected and yet we, here in Ireland, are picking up the tab. And if you go to Las Vegas — that den of mafia involvement, prostitution and other social ills that has been hailed by people this week as an example that Tipperary should follow — you’ll find a history of bad investment and major losses by casino operators too.

No Irish bank is going to provide finance in the NAMA environment. Quirke in one of his rare public utterances has said he doesn’t want it anyway. The idea that foreign banks would lend money to what Lowry called "the most sophisticated and ambitious project the country has ever seen" seems implausible given this country’s reputation in international circles at present but Quirke may have equity investors lined up to minimise the bank loans.

All the Department of Justice has done so far was to publish a discussion document last December entitled Options for Regulating Gambling, one of which was to permit at least one "resort casino" of the type being planned for Two-Mile-Borris. That was under the old Fianna Fáil-led government which existed on a wafer-thin majority and which was prepared to consort with Michael Lowry.

Since then the Government has changed and the Fine Gael/Labour administration is not beholden to Lowry. He has been subject too of the most damning final report by the Moriarty Tribunal which has confirmed him as a person with whom no government should be prepared to deal.

If Lowry is part of a group that manages to swing a casino licence then we will have confirmation that this country cannot be reformed.

The Last Word with Matt Cooper is broadcast on 100-102 Today FM, Monday to Friday, 4.30pm to 7pm.

This appeared in the printed version of the Irish Examiner Friday, June 17, 2011