Tuesday, November 13, 2012

If there is to be a gambling referendum, it should address the big three: ...casino gambling, a national lottery and online gambling/web shops

Is The Gambling Referendum Worth The Time?

Tribune Features Editor

THE upcoming referendum is really yucking up my vexation. I join the chorus of Bahamians encouraging the government to put a proper referendum forward; one that is worth suffering the inconvenience of going out to vote. There is no shame in doing the right thing.

My concerns, however, do not echo some of the popular discourse. I for one believe some of the complaints represent plain ole “bad mind”: grudgfulness and hypocrisy. And I have no intention of perpetuating that.

If the government is going to put a question to the Bahamian people by way of a referendum, it has a responsibility to educate the Bahamian people about the question and the premises upon which it is based. It is completely inadequate for the government to say it is staying out of the fray. Gambling in the Bahamas is a complex issue and an uninformed public serves no one.

My first point explores the issue of web shops. There is a major point that seems to be eluding the government and many observers; Web shops in the Bahamas are licensed businesses. They are not illegal operations, even though they function within grey confines of the law.

Bahamians tend to make generalised statements about gambling being illegal. However, there is a big difference between something that is illegal (meaning, something that contravenes the regulations set out in a particular statue) and something that is simply unregulated. In reality, much of what web shops now do is not illegal: They are simply not regulated.

Those distinctions may seem meaningless as Bahamians discuss the matter over the airwaves. However, they are very real in the face of the law. The legal experts employed by web shops are well aware of this, and they use it to their advantage. Let us not forget, the attorney for one of the web shops was a former member of parliament.

These businesses are not fly by night operations. They are run by astute businessmen with sharp attorneys. To date I am not aware of any successful legal challenge which resulted in a web shop license being revoked or a web shop being closed. To the contrary, web shops continue to grow and expand.

I am no legal expert, but it is obvious that loopholes in the law have enabled web shops. The real crime is not the business acumen and legal prowess of gambling bosses, it is the shortsightedness and perhaps ineptness of subsequent governments in failing to get ahead of the industry, which is surprising considering the House of Assembly is riddled with lawyers.

On this point there has been zero accountability, and it has left the Bahamian public confused and uninformed about the issues. The Free National Movement (FNM) is grasping at straws to criticize the Progressive Liberal Party (PLP) led government, but neither party has clean hands.

Government regulations have simply not kept pace with the evolution of the numbers business. The failures have created grey areas in the law that makes it near impossible to regulate the industry or prosecute its players. This is particularly true as it relates to the wire transmission of wagering information (online gambling).

Bahamians are still applying an old school way of thinking about numbers to an industry that has made quantum shifts. Long gone are the dice and paper days when underground gaming houses actually pulled numbers. The business model has changed.

Technology – specifically the advent of online gaming – has given gambling bosses the ultimate opportunity to step out of the shadows onto the frontlines having no regard for the Lotteries and Gaming Act.

Web shops are some of the most technologically advanced businesses in the Bahamas. They have invested millions in technology. They purchase world class software from the same providers who supply banks and other companies in the financial services industry. They use sophisticated systems that are elusive. The laws or law makers simply did not anticipate this sort of development.

A consumer can setup a charge account with a web shop and from the comfort of their own home gamble online. Without unjustifiable invasions of privacy on the part of the government, such a practice is impossible to prohibit.

A web shop can set up a computer lab and provide Internet access to its consumers and free itself of responsibility as to what its customers do online: write a business proposal, read soap opera news or gamble online.

Online gaming has become so popular with women that they now comprise the largest share of web shop customers, according to inside sources.

It has created a completely new and extremely profitable revenue stream for web shops.

The laws that govern the gaming industry are highly technical. When online gaming exploded, it made international regulators dizzy. Online gambling houses were able to exploit a host of loopholes and grey laws.

There is still a raging global debate about how and if to regulate or prohibit online gambling. Bahamian regulators are far behind on the learning curve.

Last week, Gaming Board Chairman Andre Rollins questioned the legality of bets being waged using lotteries from in the United States. He said the government would have to look into the practice if the referendum were to pass. This investigation should not take much time.

According to industry insiders, it is perfectly legal to use publicly broadcast US lottery numbers in the way they are currently being used locally. A Bahamian, who wages a bet on the Miami lotto, for example, is not buying into the Miami lottery. They are on betting they can guess the outcome of the Miami lottery. Third parties are not permitted to use the logos, slogans or trademarks of the originating lottery. The results, however, are public knowledge, and third parties are free to use these numbers how they see fit.

International sports bookies do a similar thing when they establish bets on various national sports associations, such as the National Basketball Association (NBA). International bookies cannot use NBA trademarks, but they do not need permission from the NBA to establish a bet around which team might win any particular game.

How does this relate to the referendum? For one, it complicates the matter highly, because the Prime Minister has said, should the people vote no, he will enforce the law and shut down web shops. That sounds good, but a government cannot arbitrarily shut down a business or revoke a business license. The business has to have committed an actionable offence. If the legal experts can effectively argue that existing statutes do not regulate the activities they engage in, then the government would have no legal basis to shut down web shops. They would have to enact new laws before they could touch the web shops.

Web shops are not going to roll over and disappear. They are going to fight. I do not say this having some special insider information. It is only logical. It is a million dollar business and the industry’s financiers are heavily invested. Alternatively they will return to the shadows or take their business outside the country.

Understanding all of this, I maintained the view from before the general election that a referendum on web shops made no sense. It was an unwise populist promise. I still hold this view. Anyone with eyes to see knows well that gambling is by and large embraced by Bahamians.

There are as many web shops in the Bahamas as there are churches and liquor stores. Perhaps the Bahamas Christian Council is jealous.

I heard Mario Moxey of the Bahamas Christian Council (BCC) making asinine arguments on the radio the other day about morality and gambling. Morality is irrelevant to the public policy question at hand.

I am not questioning the BCC’s right to spiritually advise its believers about the immorality of gambling. Christians have a right to hold the view that gambling is a sin. I do not believe they have the right to impose that view on others, or to insist public policy reflect that view. But I understand the church is desperately trying to be relevant.

Walk through the doors of a web shop on any given day at any given time: There will be people standing on line or sitting in front of the computers who do not agree with the BCC’s perspective. They do not see gambling as wrong. And it is their right to feel that way.

Gambling may very well be immoral within the Christian worldview, but is that really a basis on which the government should use public policy to prohibit all Bahamians. Is there a valid case that can be made against gambling that should not also apply to alcohol or tobacco consumption? Clearly not.

The government needs no permission to eliminate the grey areas which have enabled web shops to thrive. And the law as it stands empowers the government to grant exemptions for specific types of gambling, whether a church raffle or an internet gaming shop. It is largely because of the vocal opposition of the church and its political implications that the government has not and would not act. The PLP gambled that a referendum would provide the cover to act, one way or the other.

The government has tangled itself in a real web. Should the people vote no, the government will have an even bigger mess on its hands and the potential political fallout will be far worse that what currently exists.

The tide seems to be turning against the government and not for any reasons relating to how Bahamians actually feel about web shops or gambling. The perceived backtracking on the national lottery election promise and the lack of transparency around the government’s foreign consultants is pissing the public off. It has raised suspicion of kickbacks. The public seems ready to vote no, just to spite the government. If that happens, the referendum will have caused much more problems than it is worth: unnecessary problems at that.

I am undecided about going to cast my vote in the referendum; I feel it will be a waste of my time. The referendum addresses nothing of substance and there are no stakes in it for me. I am not a gambling enthusiast, although I have patronized web shops before. So I would suffer no great loss should web shops be closed down, but I would also take no offence if they remained open. So why should I go vote?

Casino Gambling

I would go out and vote for a constitutional worthy gambling question.

The government currently upholds a policy which allows non-Bahamians to gamble inside the Bahamas, while prohibiting Bahamians from being able to do so. Is such a policy discriminatory and/or unconstitutional and should it be upheld? These issues are referendum worthy.

The current casino policy is clearly discriminatory. It was instituted during a time when Bahamians were seen as irresponsible and incapable of handling the freedom to gamble. It was enacted by the government under pressure by the church lobby pedaling the same social mayhem theory as today. It was objectionable then and it is objectionable now.

There is no way a foreigner should have the right to engage in any activity in my country that I have no right to participate in. For me, there is no other argument.

A layman’s reading of the constitution, specifically Article 26, which deals with how the constitution defines discrimination, suggests that the existing casino policy is not unconstitutional. It seems the crafters of the constitution fashioned a specific clause (26.4e) to satisfy the church and casino lobby. (Thanks to Dr Ian Strachan for opening up the discussion on this issue).

The clause prohibits discrimination except where the law makes provision for “authorizing the granting of licenses or certificates permitting the conduct of a lottery, the keeping of a gaming house or the carrying on of gambling in any of its forms subject to conditions which impose upon persons who are citizens of The Bahamas disabilities or restriction to which other persons are not made subject.”

In essence, it seems the discriminatory practice existed prior to the drafting of the constitution, and this clause was included in the constitution to secure the status quo and to protect against any legal challenge to the establishment.

The clause does not, however, obligate or compel the government to support the policy, which quite clearly discriminates against Bahamians. It only provides legal cover to the government if it chooses to support such a policy.

Should the government support a policy that discriminates against Bahamians gambling in casinos? No. If the government wished to have a referendum to affirm the will of the people on this particular issue, it would certainly be a vote worth casting. Why? Because it affirms a basic yet fundamental principle of freedom and sovereignty.

The government would show real leadership by putting this question to rest.

If Bahamians had more access to gambling opportunities there are obviously risks, but the social mayhem theory being pedaled is a fantasy. The gaming industry should not be a free for all. There should be government regulation and protections put in place to address the social concerns. But history has shown the futility of prohibition and wisdom compels us to err on the side of freedom of choice.

I will discuss the national lottery issue in detail next time. For now, I will say the government’s actions have raised serious questions about transparency and due process. It makes no sense to start the argument with questionable evidence that concludes a national lottery is not feasible. A referendum is needed to establish the will of the people. If the Bahamian people desire a national lottery, then the government should undergo a rigorous and transparent process to create one. It has been done before in comparable jurisdictions and unless we are inept a national lottery can apply here.

There is obvious interest in a national lottery and the government’s actions fly in the face of the public. As I understand it, there may be a new announcement coming as early as today addressing the government’s position on this.

I will end where I started: There is no shame in doing the right thing. If there is to be a referendum it should at least address questions worth suffering the inconvenience of going out to vote. If there is to be a referendum, it should address the big three: casino gambling, a national lottery and online gambling/web shops. The government has kicked the bucket down the road for too long. Let us not waste anymore time.

November 12, 2012