Gaming and financial regulations in The Bahamas

Bahamas ‘10 to 15 years’ ahead of curve on casino gaming

Director of UK institute focused on financial crime suggests need to address illegal gaming




By ALISON LOWE
Guardian Business Editor
alison@nasguard.com

The Bahamas is “10 to 15 years ahead of the curve” in the region with respect to legal gaming and associated regulation, but will likely have to very soon consider the implications of illegal gaming in the “web shop” industry if it is to avoid the “very painful downsides” of unregulated gambling, an international gaming and financial crime regulation specialist has warned.

 

Kleo Pappas, director of the International Governance and Risk Institute, told Guardian Business that he expects that illegal gaming is a topic that will arise during the forthcoming “Bahamas Gaming Forum: Fostering Growth, Transparency and Social Responsibility”, which the institute is hosting at Atlantis resort next week.

 

A UK-based entity that specializes in organizing and running financial crime prevention training programs, consultations and gaming regulation seminars, the International Governance and Risk Institute’s forum will bring together regional officials and firms navigating the challenges of managing gaming regulation in an environment of evolving technology, while remaining competitive.

 

Among those expected to attend from throughout the region, the U.S., Canada and Australia are casino managers, money laundering reporting officers, gaming regulators, law enforcement officers, compliance officers and international firms seeking access to emerging markets for gaming.

 

The event will be opened by Minister of Tourism Obie Wilchcombe and Prime Minister Perry Christie, and will see speakers focus on issues such as the growth and regulation of Caribbean gaming, anti-money laundering, essentials of gaming law, customer due diligence for online gaming and “cheat intelligence”.

 

Pappas said that recently-tabled legislation in The Bahamas which would allow mobile gaming on resort campuses throughout The Bahamas certainly raises interesting new questions for regulators who might seek to ensure this type of activity is being managed in a responsible and legal manner.

 

“Without a doubt, because having mobile gaming is gambling remotely [it raises new challenges]. You’re not going to a resort, you’re not snapped on a camera or anything like that. And socially - and I don’t really know because I haven’t been immersed in this country’s regulations - I am not sure how they will effectively limit that to on-campus.

 

“If you are on the side of the fence that doesn’t want gaming to become prevalent, there is the question of how those on the other side of the fence may view (mobile gaming) as the thin end of the wedge.”

 

Pappas said that The Bahamas is a model for other jurisdictions that may be interested in pursuing gaming to a greater degree, but indicated that the jurisdiction may eventually have some catching up to do with respect to dealing with the “numbers” sector.

 

“I think for The Bahamas what you have going for you though is that you are in a place where a lot of jurisdictions are going to be in 10 to 15 years from now.

 

“You are further along this evolution of gaming and financial regulations; your financial intelligence unit is very well run and organized. There are fail-safe measures in place for the financial services industry which wouldn’t take a lot of effort to modify them for the gaming sector.

 

“But if this is something that is happening illegally, I don’t think it’s going to be a very long time before they have to look at it. And by all means look at something like they have in the UK, put the emphasis very much on the gaming operators to put money into a pot to make sure there is a social awareness, that people realize the very painful downside to gaming that is done to excess,” said Pappas.

 

He compared unregulated gaming to Prohibition in the U.S., and told Guardian Business that he expects the topic to come up at the forthcoming forum.

 

“We’re going to have one or two debates I’m sure and panel sessions, and if it doesn’t get raised I’m going to raise it,. The parallels are very similar to the Voldstead Act - the prohibition of alcohol for that famous 10-12 year period in the U.S. where they decided they would have the ‘sober society’ and concentrate on what was important.

 

“The church was very much behind that, and what was the result? People drank astonishing amounts of booze, huge amounts of money was spent on it, and you had this gangster class of people that rose up. The elicit gaming that happens here, you are not alone in that, Trinidad and Tobago has the same issue.

“They don’t have a regulator because they don’t want to be seen to regulate something that is illegal, but they realize that the writing is on the wall, the end is nigh and they are at the point where they either take the plunge and legalize it or stamp it out somehow.”

The Bahamas Gaming Forum will take place from October 28 - 30 at Atlantis resort.

October 25, 2013

thenassauguardian

CaribbeanBlog International

Months after the failed January 28, 2013 gaming referendum, gambling continues to be one of the most divisive ...and unnecessarily distracting issues in The Bahamas

A bad gamble

Gaming Bill resurrects calls for end to discrimination

By CANDIA DAMES
Guardian News Editor
candia@nasguard.com

The government of Prime Minister Perry Christie had another bad week last week.

In fact, it seems the Progressive Liberal Party (PLP) administration has been tying itself into one strangling knot after another.

Leading up to the first anniversary of its May 7 victory, it is finding itself increasingly on the defensive and has been making the kinds of moves that awaken public angst and weaken the confidence of citizens in their government.

An increasingly hostile and confusing tone on work permits, a highly publicized immigration blunder at Atlantis resort and the junior national security minister’s suggestion that the Americans are fueling our crime problem by sending us criminal deportees were all matters that caught our attention last week.

But it was public reaction to The Nassau Guardian’s revelation on the proposed Gaming Act 2013, and an announcement that web shop layoffs could come as early as this week, that showed most clearly that the government has a lot of work to do to stem what seems to be rising anti-PLP sentiment.

Months after the failed January 28 referendum, gambling continues to be one of the most divisive and unnecessarily distracting issues in The Bahamas.

In the lead up to that referendum, there was great confusion about the process.

In the weeks and months since, there remains great confusion on the way forward for the web shop sector.

By far, the matter that is dominating national discussion is that proposed act on gambling.

As we reported, it would permit holders of casino licenses in The Bahamas to facilitate online and mobile gambling.

With a deal sealed with Las Vegas’ Cantor Gaming, Atlantis is set to offer its guests mobile gaming as of this week.

Minister of Tourism Obie Wilchcombe, who has responsibility for gaming, said yesterday this will be offered during a “test period” and the property would have to apply for the relevant license to continue mobile gaming and eventually introduce online gaming.

The failed gambling referendum notwithstanding, many people are insulted by the discriminatory bill that would allow Atlantis, Baha Mar and the holders of other casino licenses in The Bahamas to do legally what is being denied Bahamian business people.

The bill has been in the works since shortly after the Christie administration came to office last year.

It was developed outside any considerations connected to the gambling referendum, and the government worked closely with industry stakeholders in its development.

The outrage over the government’s ongoing discriminatory approach to the gambling issue is most understandable when added to the fact that the new bill excludes permanent residents and work permit holders from the class of people not permitted to gamble legally.

The bill speaks only to the prohibition of Bahamian citizens.

Under existing legislation, permanent residents and work permit holders are also prohibited from gambling.

For Bahamians, the move could not be more insulting.

Another provision of the new bill would allow people outside The Bahamas to gamble via the website of a local gaming license holder.

But those people must be in jurisdictions that allow online gambling.

Wilchcombe said there will be tight controls to guard against Bahamians gambling from other jurisdictions.

REFORMS

While Bahamians ought to be concerned over the matter, any hysteria and anger toward the investors who have long been pushing for these industry reforms are misdirected, in my view.

As good and valued investors, Atlantis and Baha Mar deserve to have legislation passed for the protection and improvement of the gaming sector and the tourism industry.

The decision to block Bahamians from gambling in local casinos is not the investors’ decision.

The casino operators in fact have said more than once that they would welcome Bahamians gambling in casinos.

The decision to keep Bahamians from gambling in casinos is the government’s continuation of a controversial and discriminatory decades-old policy.

Wilchcombe said yesterday the policy has served us well and it would need to be carefully examined before any changes are made because there are serious social and economic considerations.

“We have always restricted Bahamians from participating in the gaming activity at our casinos and it was in fact the best compromise for a tourism destination and a country that has a strong opposition from Bahamians participating, particularly the church,” he said, referring to the initial decision on casino gambling several decades ago.

“Way back then, it was a happy compromise and I think that it has proven to be beneficial for the country and it has not hurt The Bahamas.

“We have been able to build an economy without income tax, etc. and it’s really because of our progressive tourism industry, one which included gaming.”

Wilchcombe also rightly pointed to the need and desire for the gaming aspect of tourism to be more competitive — thus the need for the Gaming Bill.

Anyone who takes offense to this bill ought to take that up with their government — not the holders of casino licenses who have for years been working with the government (the former administration included) to effect these necessary reforms for a more competitive gaming industry.

In a paper outlining recommendations for reforms, casino licensees note that in recent years, casino gaming has expanded worldwide.

To stay competitive, the largest jurisdictions have been forced to update their regulations to accommodate shifting consumer tastes, technology and potential sources of new tax revenues, the document points out.

It adds that Nevada, Macau, Singapore, New Jersey and the U.S. Gulf Coast states have structured their laws to reflect recent developments.

Casino operators are hoping the reforms outlined in the Gaming Bill would drive gaming revenues and create a sustainable competitive advantage.

They made 14 recommendations to the government in a document titled “Guide to modernization of casino regulations in The Bahamas”.

One of the recommendations calls for segmented VIP gaming suites and salons. It would allow enclosed gaming rooms to be located anywhere on the resort campus of a licensed casino.

Other recommendations include credit card payments for chips and duty free exemption for gaming equipment and interactive/mobile gaming.

The licensees also proposed the impostion of an entry level for permanent residents and work permit holders.

The document notes that in Singapore, residents must buy a daily pass for US$100 or yearly pass for US$2,000 for casino entry, limiting access to those with financial means.

Wilchcombe said without critical reforms, the gaming sector would lose ground.

THREAT

A separate but very closely related issue involves the web shop industry, which is reportedly suffering under a threat of raids.

Bahamian citizens must continue to demand an end to discrimination on gaming.

Had the referendum passed on January 28, one assumes the government would have been well on its way in structuring a properly regulated web shop sector.

But Bahamian citizens would still have been barred from casino gambling.

The absence of that question from the ballot is one reason some people gave for voting against the regularization and taxation of web shops and the establishment of a national lottery.

It is also the reason some people gave for staying away from the polls altogether.  Voter turnout in fact was less than 50 percent.

Prime Minister Perry Christie has promised that while the casino question was not on the January 28 ballot, it would be a question on the ballot of a promised constitutional referendum if the Constitutional Commission recommends that it be addressed.

It would be unfortunate if the discriminatory nature of the bill derails the industry’s push toward modernization and reform.

But the failed referendum should not be taken as a true reflection of the views of the electorate on gambling.

Had the government taken its time and addressed gambling for Bahamians in its totality and in a clear process where adequate information was provided, it might have avoided anger and confusion over this very necessary step it is taking for casino owners.

Bahamian businessespeople who have for years been operating web shops now feel like second-class citizens, as do Bahamians who are being told about the provision that would provide for work permit holders and permanent residents to take part in an industry they have been told to keep out.

Wilchcombe has said the Cabinet will review the bill tomorrow.

Perhaps it would also examine why so many people have reacted so strongly against it.

April 29, 2013

thenassauguardian

Caribbean Blog International

...the current operation of the gaming industry in The Bahamas leaves much to be desired ...and in some ways contravenes international laws

Gaming Industry Breaking Int’l Laws

By Ianthia Smith
The Bahama Journal



As it stands now the gaming industry in the country poses many problems for the country, both nationally and in the international arena, which is why Prime Minister Perry Christie says the country must come to a decision soon as to how it will proceed with this issue.

Prime Minister Christie said the options for his government are simple: either shut down local web cafés or make them legal.

He added that that decision would soon have to be made as the current operation of the gaming industry in The Bahamas leaves much to be desired and in some ways contravenes international laws.

“The web shop operators are unable to secure bank accounts for their businesses as they do not satisfy the relevant anti-money laundering rules,” he explained. “There are concerns regarding the way in which the cash generated from the business is legitimised.”

“The web shops are used to facilitate the transmission of funds between individual resident on different Islands in direct contravention of the relevant banking and anti-money laundering rules.”

The prime minister said continued operation of the web shops in the manner outlined leaves The Bahamas exposed to international scrutiny and sanctions for failure to implement anti-money laundering rules.

He added that this position is not acceptable and needs to be addressed without further delay – an issue Mr. Christie said has been ignored for too long.

The prime minister added that this is why his administration plans to put in place what he is calling grandfathering provisions that will ensure that operators run a well regulated business which provides appropriate player protection and complies with anti-money laundering and anti-terrorism laws.

“The grandfathering provisions will, however, provide no guarantee that a licence will be awarded,” he said.

“Rather, existing operators will have to prove that they have conducted their gaming operations with integrity and fairness towards consumers, and, moreover, that they have the financial capacity and organisational structure to meet the high regulatory standards that will be demanded of them.”

He said the licences for web shop operators would be conducted in a similar manner to the licenses issued by the Gaming Board for land based casinos, this would include the appointment of an independent board, rigorous investigation of operators and their employees and input from external regulatory consultants from outside of The Bahamas who will make a recommendation to the Gaming Board on the suitability of each applicant.

The taxation regime and level of charges for licenses for the web shops, the prime minister added would be a combination of a flat rate tax licence fees and a cash bond.

The referendum will now be held on January 28 next year.

The legal framework to make that happen will be debated next week.

16 November, 2012

Jones Bahamas

Caribbean Blog International

Bahamas: Committee looking at gambling for legal residents

By Keva Ligtbourne ~ Guardian Senior Reporter ~ kdl@nasguard.com:



The committee formed to comprehensively examine the country's gaming laws may be leaning toward recommending that legal residents be allowed to gamble in The Bahamas, according to Minister of Tourism Vincent Vanderpool-Wallace.

"In particular there is a group of people who are in The Bahamas whose income does not derive from The Bahamas, but they are residents in The Bahamas without the right to work," he said.

"In very many respects they resemble a visitor. So they are now prohibited under section 50 of the Lotteries and Gaming Act from engaging in gaming in The Bahamas. So that is something that we are taking a look at the possibility of enabling those persons to be considered, but that is not a final decision. A great deal of thought is still going into all of the amendments we have to make."

Bahamian citizens and permanent residents are prohibited from gambling under the current law. However, tourists are allowed to gamble.

Last year, Bahamas Hotel Association President Robert Sands said the BHA supported a national lottery and the amendment of the gaming laws to allow permanent residents to gamble in casinos in The Bahamas.

However, the BHA does not support extending casino gambling to Bahamians.

For years, the debate over whether Bahamians should be allowed to gamble in The Bahamas has been a hot topic across the country. There are those like the religious leaders who are adamantly opposed to the idea. Many of them believe it would contribute to the breakdown of families and the society.

Then there are others who say legalizing gambling in The Bahamas for Bahamians would help fund sporting activities, culture events and education, etc.

Over the years, successive governments have been reluctant to address the issue.

Vanderpool-Wallace insisted that the committee has not considered or made any suggestion or recommendation with regard to allowing Bahamians to gamble legally.

As the committee considers what laws should be relaxed as it regards gaming in The Bahamas, a group called Bahamas Gaming Reform continues to push to end what it says is discrimination.

The group's chairman Sidney Strachan, said: "In response to numerous calls and speculation that the government may be in the process of initiating changes to the current gaming laws, Bahamas Gaming Reform (BGR) applauds any move by the government to reform the country's [archaic] gaming laws. However, BGR stresses that it must be done right and not stop short of ending the blatant discrimination against Bahamian residents."

He said Bahamians are excitedly hoping that what has long been a national pass time — the numbers game -— may finally become legal.

"Bahamians will no longer feel threatened, terrified or harassed while harmlessly queuing up at local web cafes," Strachan said.

"In spite of the heavy sighs of relief from many quarters of the country, anything short of complete reform (permitting Bahamians to be stakeholders and players in our casinos) will be an affront to Bahamians and only deepen the social divide as foreigners will again be afforded more privileges in this country."


April 07, 2010

thenassauguardian

Bahamas Blog International