A Christmas Island casino once considered the most profitable in Australia should be brought out of mothballs, a parliamentary committee into developing northern Australia has recommended.
The tiny Australian territory in the Indian Ocean, 1,600 kilometres north-west of the Australian mainland but only 300km from Java, is known for its immigration detention facility, phosphate mine and annual red crab migration.
But in the mid-1990s a new casino was the playground of the wealthy elite of Suharto's Indonesia, flying direct from Jakarta.
Following its closure in 1998 during the Asian financial crisis the island's population halved to 1,300.
In 2004 the Federal Government blocked an application to reopen the casino on the grounds it could have a negative social impact.
In a report released on Thursday, the Commonwealth parliamentary committee for northern development warned the territory faced an uncertain economic future unless it developed more sustainable industries such as tourism.
"The committee recommends that the Australian Government commit to facilitating the approval process to enable the reopening of the Christmas Island casino," the report states.
"Neither mining nor immigration-related activities will sustain the island's economy indefinitely, and the casino has the potential to play a major role in transitioning the Christmas Island economy away from its traditional mainstays.
"While phosphate mining will continue for the next 20 years there is a need to diversify the economy as the detention centre activity declines."Former high-roller casino now holds detention centre workers
The casino could be re-opened at "relatively short notice", according to the resort's owner Soft Star, which made a two-page submission to the committee.
Soft Star managing director David Kwon bought the casino and accomodation apartments for $5.7 million in 2000 and re-opened the resort in 2007.
Mr Kwon also proposed developing an $800 million commercial space launch centre on the site of an old phosphate mine, with construction to start in 2001 and operations to commence in 2003.
The Asia Pacific Space Centre never eventuated.
The former casino now provides accommodation for several hundred public servants and contractors for the detention centre on the opposite side of the island.
"In recent times some $15 million has been spent refurbishing the resort," Mr Kwon wrote in the submission.
"During its previous operation between 1993 and 1998 the resort complex employed some 396 staff, of whom about one third were permanent residents of the island.
"I am advised that appropriate measures can be implemented by the Border Protection authorities and the Australian Federal Police to meet the highest standards of transparency and accountability in terms of the re-instatement of the casino operation.
"This proposal has received the support of the Christmas Island Council, local members of Parliament and the local community."Nothing sustainable about detention centre: shire president
General secretary of the union of Christmas Island workers and president of the shire of Christmas Island, Gordon Thomson, utterly dismissed the Federal Government's reported concerns about negative social impacts.
He said 90 per cent of the island supported a re-opening.
"The plan of the community has never been to rely on detention services by the economy that's something that's been imposed above us by the federal governments," Mr Thomson said.
"The shire of Christmas Island has supported consistently the reopening of the resort as a casino resort.
"If we were to see the decline of immigration department activity on the island, and therefore the decline of numbers of staff requiring housing at the resort, then the resort would be in very difficult circumstances financially."
"Having the resort restored to a casino resort would be most beneficial to our community, to our economy, to employment and sustainability of our economy.
"There is nothing sustainable about detention centre operations. The ups and downs that we've been through over more than a decade now has not been beneficial to the long-term economy of the island."
He estimated the casino could re-open within a month of being issued a licence.
"It's all set to go," he said. "The owner has done a lot of work refurbishing the hotel rooms and the casino infrastructure is still in place.
"It would be a very very short order of time to see it up and running."Negative social impact argument nonsense: Snowdon
Committee member and MP for the seat of Lingiari, which covers Christmas Island, Warren Snowdon said he "very strongly" supported the recommendation.
He also rejected the idea the casino had a negative impact.
"That's just nonsense," he said. "There was negligible impact on the social fabric of the community that is verifiable or proven.
"I'm not certain why people would be arguing that. Gambling already happens on Christmas Island.
"Having a regulated gambling outlet is very important, but most importantly most of the people who will be gambling at the casino will not be coming from the Christmas Island community, but offshore."
He said the casino had turned over hundreds of millions of dollars.
"I actually issued the first licence for the casino on Christmas Island," he said.
"It was a sad day when it closed and it should reopen as soon as possible.
"It made significant contributions to the community through a community-benefit fund.
"Most importantly we need the Government to look positively at any proposal to reopen the casino provided the regulations are properly met."
However, he added the casino would not re-open "overnight".
"A process is required to make sure it operates in a fair honest and open manner," he said. "It has to be properly accountable for what it does."Rise and fall of an Indian Ocean pleasure palace
The Christmas Island casino was first conceived by Frank Woodmore, a Perth property developer, in the early to mid-1980s, according to the 2001 parliamentary committee inquiry following the sale of the casino to Soft Star.
"In 1981 Indonesia had just closed its three licensed casinos, all of which were in Jakarta, owing to the perceived incompatibility of religious sensitivities with gambling in Indonesian society," the report stated.
"With Jakarta only an hour's flight from Christmas Island, it was thought that the casino and resort would be in a unique position to attract wealthy patrons or 'high rollers' from Indonesia and other parts of Asia.
"Following the opening of the casino and resort in 1993, there was a major expansion of tourism on Christmas Island.
The casino heralded the island's dramatic reinvention.
Until the late 1980s the island was basically a mining town, the Chamber of Commerce and Industry told the committee.
"There was no private accommodation," it said. "To even come to the island you had to get the permission of the mine, because there would not have been anywhere to stay.
"This private business sector has built up – entirely as a result of the opening of the resort in 1993 – into something that is quite substantial."
A 2002 ABC Four Corners report, The Christmas Party, told the story of the casino and the powerful Indonesian figures behind it, including President Suharto, who gave the venue his personal blessing.
"It was an orgy of cash," a former manager told the program. "The first weekend the profit they made was $15 million."
The casino turned over $12 billion in its first two years.
"We were taking more money than all the casinos combined in Australia," a former executive told the program. "I'd worked in casinos throughout the Middle East and I'd never seen such action."
An insider said some gamblers were involved in drugs, prostitution and arms dealing.
The casino's Achilles' heel was air services to the island.
In 1996 there were return services to Christmas Island from Perth, Broome, Singapore and Jakarta. But in 1997 operators cut services and passenger arrivals fell dramatically.
In 1998 the Asian financial crisis struck, the tourism industry collapsed, the casino's owner went bankrupt, and the casino closed.
A 2001 parliamentary committee found the economic impact had been "devastating".