Casinos in South Africa's homelands: Boon or bust?
The decor is pretty much the same worldwide - glittery and bright, and ever so sophisticated.
But the ''Wild Coast'' casino complex on the southern tip of Africa has a feature that sets it apart from most gambling establishments. The new development has risen next to thatched huts that have no electricity or running water. Most of the casino's neighbors have their wealth in cattle, not bank accounts.
Despite the neighborhood, the drop in the gold price, and the region's economic tailspin, this casino is not considered a high-risk gamble here. Gambling is a booming business in southern Africa. And Holiday Inn's Wild Coast project on the Indian Ocean coast, a two-hour drive from the nearest major city, looks like no exception.
''We're very pleased,'' pronounces Nigel Matthews, managing director of Holiday Inns in southern Africa. The Wild Coast casino and hotel development, costing $26 million, has had well over 350,000 customers since it opened last December - ahead of expectations.
But not everyone is pleased with the spread of gambling in southern Africa. There is concern about the social impact of gambling, particularly when set within the poor, undeveloped communities of the subcontinent. Some economists question whether casino complexes can ever be more than peripheral in economies too primitive to provide any of the goods consumed at sophisticated tourist resorts.
The South African government comes in for particular criticism. Although it staunchly forbids casino gambling on the same moral grounds that it censors movies and literature, it quietly accepts gambling in the so-called independent homelands. The homelands are largely rural areas set aside for blacks to have their own governments.
Four of these states have been designated ''independent,'' although no other country in the world recognizes them. Three now have casinos and the fourth is believed to be planning one. The Wild Coast complex is in the Transkei homeland on the Indian Ocean coast.
Those who oppose the homelands policy as a means of politically expelling blacks from white-ruled South Africa find the gambling aspect just one more negative feature of the concept.
The casinos have obvious economic appeal to the homeland governments, which otherwise are heavily dependent on South Africa. Operators of the casino hotels take on the homeland governments as partners. For example, the Transkei government has a 25 percent stake in the operating company of the Wild Coast complex and a 54 percent share of the property development company. Transkei also receives a tax on gross casino revenues and a corporate tax on the profits of the entire development.
There is concern among some that the casino business will have a corrupting influence on the fledgling homeland governments. Three cabinet ministers of the Venda homeland government were recently found to also be directors of the company that runs the territory's casino. They have since agreed to resign as directors.
The casino business in southern Africa was launched in 1966 by Holiday Inns with a hotel and gambling facility in Swaziland. Eight such hotel casinos have sprouted since in Lesotho, Botswana, and the independent homelands.
The casinos probably do more good than harm in strictly economic terms, says Prof. Gavin Maasdorp of the University of Natal.
A South African financial journal recently estimated that the casinos and hotels pumped about $160 million into the economies of the homelands and neighboring states of southern Africa last year. Some $65 million of that was estimated to be gambling losses, and the rest tourist spending.
For the people who find a casino in their neighborhood, jobs are probably the most important benefit. The Wild Coast Casino Hotel provides 1,100 jobs for poor blacks, who have few other job opportunities in the same area.
However, whether a casino complex actually promotes long-term development in a poor rural area is questionable, says Professor Maasdorp. In a country like Swaziland, with a sufficiently developed economy to provide resorts with citrus fruit, sugar, and alcoholic beverages, casinos and tourist attractions can help boost local businesses. Maasdorp figures that in Swaziland one-third of all tourist expenditures stay in the country.
But in the undeveloped independent homelands, the picture is different. They have little they can sell to the casinos and casino patrons, and so the ''linkages (economic spinoffs to the local community) are probably tiny,'' Maasdorp says.
Social costs and benefits of casinos are less clear cut. The Sun City complex in the homeland of Bophuthatswana, built by the Southern Suns hotel chain, recently got a pat on the back from the American television program ''60 Minutes'' for bringing blacks and whites together in a social setting. Such mixing is rare in segregated South Africa.
However, Bishop Desmond Tutu of the South African Council of Churches says the casino complexes are attracting prostitution and showing pornographic movies - the things South Africa will not permit on its own soil. ''We should not turn other places into our own dens of iniquity,'' he says.
There are no firm figures, but the clientele of these casinos is predominantly the more affluent South African whites. And it appears there is an unquenched demand in South Africa for more casinos within striking distance of the white population.
Ciskei, the homeland most recently granted independence, has reportedly given Southern Sun the right to develop a casino.
And in May, the tiny homeland of Kwandebele, with a population of some 200, 000, requested independence from the South African government. Already, Holiday Inns has exclusive rights to develop a casino complex there, which is an attractive prospect because the territory is close to the main white population centers of Johannesburg and Pretoria.