Fortunes of offshore casino operators in Goa continue to remain uncertain due to the sudden demonetization of 500 and 1,000 rupee notes as announced Indian Prime Minister Narendra Modi on November 8. The demonetization operation was announced to combat black-money, corruption, terror-financing and counterfeit notes but has also had a tremendous impact on the common man, daily operations and small businesses.
Casinos in Goa have also been impacted by the demonetization drive. Casino owners claim that their businesses are closed as they have insufficient currency notes to pay their employees and the customers are also stumped due to the deficit in currency notes. Electronic transactions at casinos which are still legal have severe limitations as if a customer deposits 10,000 rupees at the casino and loses 6,000 rupees, the casino does not have change to repay the remaining 4,000 rupees.
Approximately 95 percent of casino patrons are domestic tourists mostly hailing from Maharashtra Karnataka, Andhra Pradesh, Delhi and parts of North India. Since these domestic patrons are also facing the same problem, they do not have any money to spend at the casinos due to the withdrawal limits imposed by the Modi government. As a result customers are staying away from Goa’s casinos and casino operators have been forced to shutdown operations. A third of Goa’s total entertainment tax comes from casinos and state officials fear that state coffers may be hit by the drop in casino business.
While PM Modi has called on the country to be patient and help with the process to clean up blackmoney in the country, there are many who are skeptical if the demonetization process will have significant results.
In a statement, a casino operator who did not wish to be named said “The entire exercise is based on the presumption that all cash is ‘blackmoney’ and all online transaction is ‘whitemoney’. This is untrue. We have ‘explained-money’ in the books for trading on day-to-day basis to run the business (employee salary and operational costs), but I am unable to do so.”
Chief Minister of Goa, Laxmikant Parsekar said that at the cash-crunch was felt across the country and in almost all sectors of business. CM Goa Parsekar remains concerned that the tourism industry could also be impacted as Goa is currently in the middle of its peak tourist season and the demonetization plan will limit spending across the state and its casinos.