If approved by the Senate, the Law for Municipal Economic Development that passed in the House of Representatives earlier this month by 31 votes to 17, will see the casino on the old Roosevelt Roads military base on the coast in Ceiba, some 50 kilometres from the Puerto Rican capital San Juan, being converted into an innovative entertainment centre. The proposed bill sets the regulations for allowing the establishment of similar casino resorts throughout the island, making possible casino, slot machine and video lottery development in all municipalities that wish to host such projects.
The new law includes an amendment put forward by the Department of Economic and Commercial Development (DDEC), which proposes a scale of taxation dependent on the amount invested. For example, a fixed tax rate of 25% would be levied on a development where US$500 million has been invested, 15% on a US$750 million investment, 10% on US$1 billion, down to 8% where US$1.25 billion or more has been invested. Any project must include three elements: a world class hotel of 4-star minimum; commercial and recreational facilities; and tourist attractions such as casinos.
Tax revenues generated by the casino would be divided in the ratio 40-30-30. In the case of the Roosevelt Roads project this would mean 30% to the government, 30% to the Tourism Company, the DDEC and the Roosevelt Roads Development Authority, and 40% divided between the municipalities surrounding the entertainment centre, with special concessions for Vieques y Culebra and the concept of a ‘green triangle’.
The proposed law is not without opposition from legislators and community leaders. Whereas the original proposal was for Ceiba, gaming establishments are now being proposed throughout Puerto Rico. For some this is a step too far as the majority of players at present casino operations, permitted in 5-star hotels and tourist areas, are locals and not tourists. The new law would also remove the cap on amounts wagered and leave the number of slot machines at any casino to the discretion of the Tourism Company, the gaming regulator in Puerto Rico. (E-05.17.10)
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