Bonanza in the Bahamas: The Islands of the Old Buccaneers Look for New Gold

Newsweek October 26, 1964 pp. 88-92

Three hundred years ago, the Bahama Islands, lying 70 miles off the coast of Florida, served as a natural hideaway for such notorious buccaneers as Captain Kidd, “Calico Jack” Rackham, and Edward (“Blackbeard”) Teach. Since those turbulent days, Bahamians have told tall tales of buried pirate gold, and treasure hunting through the islands myriad cays and shark-infested coral reefs has long been the status of a national pastime.

But today, as the winter tourist season opens in the Caribbean, Bahamians are much more interested in another kind of treasure: the gold that U.S. tourists and sports—shut off from Havana by Fidel Castro—can be persuaded to plunk down on the gambling table. Just 35 minutes and 88 miles by air from Miami, the swank Lucayan Beach Hotel on Grand Bahama Island now supplements the conventional appeal of green surf, white sand and swaying palms with the lure of blackjack, craps and roulette in its plush, chandelier-hung Monte Carlo Room. Full-time gambling has, in fact, brought a boom to the tropical, British-controlled island at the western tip of the Bahamas chain, and hotels and marinas have been sprouting up faster than palmetto scrub after a summer rainstorm. Plans are now afoot for a second, plushier casino, modeled after a minareted Moorish palace. And the resort’s present 500 hotel rooms will increase to 3,000 by the end of 1965. Among the new investors: Holiday Inn (which is building a 500-room hotel), U.S. ship owner D.K. Ludwig (eighteen-hole golf course, shopping center, convention hall, and two hotels), and the Canadian Power Corp. (150-room “boatel” for the skin-diving trade to be called the Oceanus Inn).

Tax Free: More that 100,000 acres of Grand Bahama Island also have been designated by the Grand Bahama Port Authority for residential real estate, selling now at $2.450 to $7,750 for one-third of an acre. And the Port Authority bolstering of the Bahamas tax-free status with a local repeal of all import and export duties, has drawn an increasing amount of light industry to the island—including a U.S. Steel subsidiary’s multi-million-dollar cement plant.
There is no doubt, though, that the big lure is gambling, and this has posed something of a problem for the Bahamian government. Sir Stafford Sands, hard-driving Minister of Finance and Tourism, is fully aware that legalized gambling could backfire and, if taken over by U.S. or European racketeers, turn the staid British colony into another freewheeling Havana. But he is also aware that gambling could be the magic ingredient required to develop the long-dormant potential of the whole Bahama chain of 700-odd islands. “A casino is a catalyst; it has already tripled the rate of development at Grand Bahama,” Sands declared recently in his wood-paneled second-story office on Nassau’s Bay Street. “If things go well, we may start similar projects on four or five other islands close to the American shore.”

Bahamas’ answer to the problem seems to be a curious mixture of tolerating known professional gamblers when they can be useful, plus a determination to keep them from outright control.

According to evidence amassed by the colonial police, American mobsters have already attempted one take-overbid. “As things stood earlier this year, “ Police Commissioner Nigel G. Morris says, “the U.S. mob had carefully laid plans to obtain virtual control of casino operations on Grand Bahama.”

Police Probe: The mob strategy, apparently, was to infiltrate a series of interlocking companies set up for the purpose of controlling the casinos. Though the Bahamas are internally self-governing, with Premier and Cabinet chosen from the legislature on the British parliamentary system, the London-appointed governor, Sir Ralph Grey, still retains control over foreign affairs, defense and internal security—which includes gambling. Under a special gambling exemption, granted by the governor, all casinos on Grand Bahama are controlled and operated by Bahamas Amusements, Ltd. Its 1,000 shares are held in trust for the government which can step in and collect any time it suspects corrupt practices. All casino profits, however, go to a separate company, the Grand Bahama Development Co., Ltd., or GBD. Major shareholders of GBD are Lorado Uranium Mines Ltd. of Canada (18 per cent), Canadian-born wheeler-dealer Lou Chesler, 51 (22 per cent), and the Grand Bahama Port Authority, primarily interested in industrial development (48 per cent). The remainder is held in small lots by individuals. In the take-over bid staged earlier this year, the Authority was offered a reported $17 million for its slice of GBD. Bahama police, working with the FBI, tried to identify the source of the money. Results of the probe remain a secret, but in the / the government ordered the Port Authority not only to retain its 48 per cent share of GBD but to upgrade it to a controlling 51 per cent.
In the shuffle, Lou Chesler was replaced as president of GBD by courtly Keith Gonsalves, executive vice-president of the Grand Bahama Port Authority. Now living in a suite at the London Hilton, the husky, quick-talking Chelser says cheerily: “I’m not an administrator and I shouldn’t be president. So now I’m sales manager.” In his new job he will masterminded sales of GBD’s 100,000 acres of prime residential real estate on Grand Bahama Island, but he still has his 22 percent.

To forestall any future take-over bids, the British Colonial Office in London has dispatched to the Bahamas a squad of topnotch English police officers, led by ascot-wearing Nigel Morris, who was police chief of rough-tough Singapore during the Communist attempt to infiltrate Malaya in the early 1950s. Scotland Yard has lent taciturn Superintendent John Bailey, 50, formerly an ace detective with the murder squad, to head up the Bahamian Criminal Investigation Department. As security chief inside the casino itself, Morris has installed Douglas K. Broadhurst, his deputy in Singapore. During the war, “Duggie” Broadhurst served as a colonel in the British Army, winning the DSO and the U.S. Bronze Star for operations behind Japanese lines.

Racketeers: Yet some Bahama wags claim that the witty, mild-mannered Broadhurst is still behind enemy lines in view of the large number of professional American gamblers who now work for the casino, mostly as supervisors. Both the Bahamian Government and the casino management have already come under heavy fire for their employment of unsavory elements. “The casino developers said they were going to be no American gamblers involved,” charges ex-FBI agent Dan Sullivan, now director of the Miami Crime Commission. “The next thing we hear is that Max Courtney—a person who was once close to convicted racketeer Frank Erikson of the New York mob—is the general manager of the casino. The second we hear that his associate would be Frank Ritter.” Sullivan’s attack was driven home last month when both Ritter (alias Red Reed) and Courtney (real name: Moise Schmertzler) were indicted in New York for failing to purchase a Federal gambling-tax stamp while running a bookmaking operation, described by U.S. officials as “probably the biggest in the U.S.,” with a weekly turn-over of around $1 million.

For its part, the colonial government is maintaining a stiff upper lip over its associations with the American underworld. Though it recently expelled five U. S. gamblers as undesirable, it will probably permit the casino to retain the services of Ritter, Courtney and a dozen others. One reason: the mysteries of the all-American game of craps was so alien to most European croupiers that they will require supervision by professional Stateside experts for some time. More important still, highrollers do not walk into a casino with a $50,000 wad stashed in their pocket. They play on credit. And the subtle business of gauging who is a good cuff risk, and for how much, requires a lifetime’s experience in the world of big-time gambling.

Last week the breezy, nattily dressed Ritter, 61, seemed untroubled by his indictment (the charge was not an extraditable offense). “That kind of thing is inevitable,” he told Newsweek Associate editor Timothy Hubbard. “If you’re going to gamble in the States, it just about has to be illegal, and that means cops and law courts. But being illegal doesn’t mean you’re unethical; it’s not like robbing a bank.” Such delicate moral distinctions as these have persuaded Police Commissioner Morris to let Ritter and Courtney (currently in London training a batch of new croupiers) continue at the casino in return for their professional gambling savvy.

Even with the catalytic boost of gambling (Nassau itself has long sported a casino at the Bahamian Club, but unlike the Lucayan it only opens a couple of months in mid-winter). the Bahamas has not been neglecting the traditional tourist business, In recent years the islands have raked in non-gambling dollars at a sprightly clip: during 1964 alone some 650,000 visitors will spend an estimated $58 million savoring the delights of the little British colony (population 130,000; approximately 85 per cent are colored).

Neon Ban: Last week, in the capital city of Nassau—where neon signs are banned by law—camera-toting tourists thronged the narrow sun-baked streets (average winter temperature: 67) in pursuit of duty-free perfume and liquor ($3 for a fifth of good Scotch). Fellow enthusiasts, many just off the pleasure liners docked at Prince George Wharf, haggled over baskets in the Old Straw Market, bought T-shirts emblazoned “Property of H.M. Prisons, ” and clicked their cameras at native fishing boats unloading along Woodes Rogers Walk (named after the famous English privateer who cleared out the pirates and in 17181 became the colony’s first royal governor). Other tourists, riding in gaily fringed one-horse surreys, clopped through winding streets of pink stucco cottages and cozy whitewashed Anglican churches for a peek at the cannon-ringed governor’s mansion—inhabited during World War II by the Duchess of Windsor while her royal husband put in a stint as governor. At night a few tourists crammed into the tiny Savoy Theater to watch “Bikini Beach” and the Beatles in “A Hard Day’s Night.” But most favored the live local beat, and crowded into Dirty Dicks on Bay Street or the plush Carlton House Bar to savor goombay—calypso with a Bahamian twist.

Behind the sinuous lilt of the goombay, however, another rhythm is be- / [92] coming increasingly strident in the Bahamas—the hammer beat of new construction work.

The greater part of this is on New Providence, the colony’s central island. On the south shore, just 10 miles by road from Nassau, the 2,500-acre Coral Harbour development now sells homesite lots at prices ranging from $4,000 to more than $20,000. On the western end of the island at Canadian beer baron E.P. Taylor’s 1,000 acre Lyford Cay, CBS chairman William S.Paley is building a plush winter cottage. Twenty other homes are also being built on the super-posh project, which numbers among its residents Baron Guy de Rothschild and Lord Astor. And just a five-minute ferry ride from Nassau stands A&P heir Huntington Hartford’s $40 million Paradise Island project—now up for sale. Key selling motive: failure to obtain a casino license.

Prefabs: Though the Bahamas boast more miles of beach than the rest of the Caribbean combined, development of the so-called Out Islands (as distinct from New Providence which supports 60 per cent of the total population) has been much slower. A few isolated projects, such as the 42.5 million Treasure Cay of National Car Rental chairman R.E. Dumas Milner on Great Abaco, the development of more than 20,000 acres on Eleuthera with a syndicate headed by Pan Am’s Juan Trippe, and a group of developments on the north shore of Andros, are already underway. But they still leave a great part of the Out Islands wholly undeveloped. And this, according to Sit Harold Christie, a dominant force in the colony’s clannish business community for more than twenty years, is where the Bahamas’ future lies.

Since he returned to his native islands after serving as a pilot with the British Air Force in World War I, gregarious real-estate dealer Christie has bought and sold more than 100,000 acres of land—most of it high-priced luxury acreage. “The new trend today is to community developments for middle-income groups.” Christie declared while relaxing in the lushly vegetated garden of Cascadilla, his spacious Nassau villa. “We are experimenting with prefabs on Andros and Grand Bahama. These should give us a two-bedroom cottage on an interior lot with all utilities for $20,000.” Though the full dimensions of the middle-income land market are still unmeasured, most Bahamian realtors feel they are on the threshold of a boom that could develop every island in the colony.

Blue Sky: Most Bahamians realize, though, that continued prosperity depends on how well they promote their island paradise, from the white-beached expanses of San Salvador (where Colum. / umbus made his first landfall in 1492) to the gaming rooms of Grand Bahama and by the pirate taverns of bustling Nassau. By 1970 the islands expect to draw well over a million tourists a year. After that, they hope the clear blue tropical sky will be the limit.