Lock, the sequence you cited was based on real-life events:
Meyer Lansky, the character on whom Roth is based, was very tight with Fulgencio Batista, the Cuban dictator portrayed in the film. When Batista seized power in '52, he saw that US tourism had fallen way off because gambling in Havana's casinos was crooked. He brought in his old pal Lansky because Lansky had a reputation for giving the suckers an even break. Lansky and Batista built the Havana Riviera, Cuba's largest casino/hotel, which opened in March, 1958. Lansky was aware of rebel activity, but he was secretly sending money to Castro to keep his options open. He misled himself into thinking that he could continue to control gambling after Castro took over in January, 1959. Uh-uh--Castro closed the casinos and whorehouses, and booted out all the gangsters. Lansky lost his hotel. (He did have enough influence with Castro to get Santos Trafficante, his major Mafia partner in Cuba, sprung from one of Castro's jails.)
As for the film: Everything in the script indicates that Roth thought the rebels had no chance of taking over--wishful thinking. I believe his intent was to take the $2m from Michael, have Michael assassinated, then either keep the $2m, or give it to Batista as a gift from himself (Roth), not Michael. Michael took an incredible risk going to Cuba, where Roth was the most powerful gringo and could have him swatted like a fly. But Michael was intent on playing out the game until he knew for sure who the traitor was in his family. He knew that Roth wouldn't move against him until Roth had the $2m. That's why he didn't bring the money to the island, and later, when Fredo brought it, he didn't hand it over. I believe that Michael saw that the rebels would win. I also believe that he wanted Fredo to bring the money and to be with him in Havana as a test to see if Fredo was involved in the betrayal and Tahoe shooting. Note the intense looks Michael gives Fredo when Fredo asks if anyone he knows is in Havana, and later, when he introduces him to Johnny Ola.
