...as a society we should not put our confidence in the legalization of gambling for Bahamians ... we should rather rely on our abilities, discipline and hard work ...and appropriate public policy to improve our circumstance

Put not your confidence in gambling

By Phillip P. Sands

The Progressive Liberal Party’s pledge to conduct a referendum on aspects of gambling is the right thing to do in light of the sustained public debate on the issue.  Political parties should refrain from politicizing this matter as occurred in the 2002 referendum.  Civil society and individuals should lead the debate.

I oppose the government endorsing gambling by Bahamians in The Bahamas not because of any religious piety on my part, but due to my increasingly strong conviction that the arguments advanced by those in support of gambling are faulty, misguided and short-sighted.

Three main arguments are advanced to support allowing Bahamians to gamble in The Bahamas namely: constitutional discrimination; unenforceable laws; and enhancement of state revenues.   However, each of these arguments is fundamentally flawed and/or lacking sufficient objective evidence to support claims made.

Constitutional discrimination

It is clear that casino gambling in The Bahamas is discriminatory, but this does not violate the constitution.  The principal purpose of the constitution is to outline the fundamental rights and responsibilities of the country’s residents.  Bahamians cannot gamble and tourists can, but tourists are unable to engage many of the constitutional rights and responsibilities (like voting and employment rights) reserved for residents.  So, the constitution is discriminatory, but this does not make it self-violating and neither under the letter or spirit of the constitution can gambling be considered a right or responsibility.  Even if this were a constitutional matter, the right action to take would be to have the tourists conform to the current standard set for Bahamians and not vice versa.

Unenforceable laws

There is little doubt that it has been virtually impossible for law enforcement agencies to “break” gambling activities among Bahamians in The Bahamas.  However, a similar fate befalls the police in their attempts to stamp out strip clubs, the drug and firearms trades and prostitution.  Therefore, does this mean that the current inability of the police to tackle these problems should lead to their acceptance?

Using the premise that difficult to enforce laws should be abandoned, why not decriminalize the marijuana trade?  It also involves a large proportion of the population and, despite the high public expenditure devoted to its eradication, many of its users are never caught.  Of those who are imprisoned, thousands of dollars are spent to warehouse them in an overcrowded prison environment which, many argue, does little to rehabilitate and more to create hardened criminals of its inmates.

Families also pay a tremendous monetary and emotional price during and after the incarceration of their sons and fathers who often struggle to re-integrate into society, including the labor market, as they are saddled with a criminal record and the stigma of having been to prison.  Because of this, ex-cons seemingly are never able to repay their debts to society – some just for smoking a marijuana cigarette.  Yet, as a society, we have decided rightly that marijuana is contraband and its use is not permitted.  So, if we hold firm on this, why should our position be any different in relation to illegal gambling?  Decisions like this should be taken on principle, not on a whim.

Finally, if it is impossible to control web shops now that gambling for Bahamians is illegal, why do some of us think that the government would be able to regulate (including collecting all taxes due) these establishments which have become skilled at circumventing and defying laws, rules and regulations?

Enhanced state revenues

According to the May 24, 2012 edition of The Tribune, a national lottery could generate $190 million.  This money, unlike that gained from casino gambling, is money already in the local economy.  Yes, there will be some multiplier effects, but not anything more than if the money were used on some other forms of recreation (e.g., going to the movies and the bowling alley).

While prime minister, Hubert Ingraham projected the government collecting $30-40 million in taxes, which would represent about two percent of government expenditure, currently at $1.8 billion per year.  But, for the sake of argument, let’s be generous and project that the government would receive 40 percent of the $190 million.  This would total $76 million, or about four percent of the current government expenditure.

With average annual household income equaling $30,318 in 2008, a significant portion of household income would have to be devoted to gambling as reflected below in the chart.

According to the Bahamas Living Conditions Survey Report, the average Bahamian household spent 12.6 percent of its income in 2001 on personal care, clothing, footwear and entertainment collectively.  So, if 70 percent of Bahamian households participated in gambling, they would need to spend two-thirds of the money that they should be spending on these items ($2,592.17) on gambling alone.

Since lotteries, like any business, advertise and try to convince and entice people to buy their product, if the government facilitates Bahamians gambling, it would become party to encouraging its citizens in irresponsible behavior.  When families make poor money management decisions and neglect their responsibilities (i.e., housing, utilities, etc.) then the government too will be partially at fault – all for a mere four percent of its income.

The nature of the game

Moreover, gambling is a zero sum game and for every winner, there must be losers.  In fact, for every winner there are many losers.  If one spends $1 and wins $600 playing the numbers, I estimate that at least another 999 people must lose (assuming they spent $1 each).  State-sponsored gambling is a tax.  We already have an unjust regressive taxation regime which disproportionately burdens the poor.  What Bahamians should really be calling on their government to do is to restructure the system of taxation where the upper middle and wealthy classes “man-up”, embrace “the Buffet Rule” and take on a greater share of the tax burden.

Yes, many Bahamians currently gamble and there is a loud call for its legalization.  However, under scrutiny the justifications offered for the legalization of gambling are fatally flawed.  It may be true that currently there is little that the state can do to stamp out the illegal gambling which takes place in the country; and even if the majority of citizens voted against it, thousands of Bahamians will continue to gamble in The Bahamas.

So, the real issue is not whether or not our laws vis-à-vis gambling are discriminatory or that the government cannot enforce its current prohibition related to Bahamians gambling, or even that the proceeds from gambling can supplement government revenue.   The real issue is whether or not the society and government, without strong justification, should endorse gambling, which is likely to create other more fundamental policy and moral dilemmas and problems.

I say as a society we should not put our confidence in the legalization of gambling for Bahamians, but rather we should rely on our abilities, discipline and hard work and appropriate public policy to improve our circumstance.

Jun 22, 2012

thenassauguardian

caribbean Blog International

The revelation that the Bahamas government would not legalize gambling for Bahamians was like a slap in the face to some number house bosses

Numbers houses 'losing business'
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:



The revelation that the government would not legalize gambling for Bahamians was like a slap in the face to some number house bosses, who claim the backlash that followed the government's decision has caused a decline in business and has forced them to make serious cutbacks.

One businessman, who claimed he was expressing views shared by Island Luck, FML and Asue Draw, which reportedly represent more than 70 percent of the local market, said after opening up their books to the government, they were shocked when it was revealed that the law would remain unchanged.

The businessman, who wished not to be named due to reported pressure from the police and financial institutions, said if someone had asked the number bosses two weeks ago whether their businesses would have been legalized, they would have said with absolute certainty that they would be.

While he said they respect the government's decision to leave the law as it is, they want to know what will happen next.

The comments came two weeks after the Cabinet Office announced that the government will not proceed with the legalization of gambling. The government has instead concluded that a referendum should be held after the next general election so Bahamians can have the final say on the divisive issue.

"Now what?" asked the group's spokesman, who added that since the government's declaration, police have been coming around their businesses more frequently and "harassing" their customers.

He said sometimes police cars are parked in front of their businesses, which has led to a drastic slowdown in business.

Things have gotten so bad, 10 to 20 percent of the staff working at the various sites have or will be laid off, the businessman said.

The number boss told The Nassau Guardian that representatives from the government and the Ministry of Finance approached them months ago seeking to get information to assist with the legalization of gambling.

"When the government made the announcement (that they were considering legalizing gambling) we opened our doors and we invited them in," he said.

"We provided them with all the necessary information that they needed. We wanted to support the government's decision, [we] wanted to help the country in terms of the deficit and we know the money could go a long way."

The businessman claimed that the bosses were told that by June 30 the necessary legislation would be passed in Parliament for the legalization of some form of gambling.

"We were all under the impression that it was going to be legalized," he said. "You don't have the Ministry of Finance walk through the number man's door if this is not something that the government has in mind. They contacted us," he stressed. "They met with us individually."

He said when they found out that the law would remain unchanged "it was a blow to everyone".

"We really didn't expect it. We were hoping that just like how they called us in the beginning, they would have called us back. We were accommodating. We had to hear about it in the paper. We don't know where to go from here. We want to know what is the government's position for the future. We need to know, the public needs to know because for every two people against it three people [are] for it."

The businessman said while he was not looking forward to his business being taxed, he was not against it and he was relieved that his business would be legitimate.

The prime minister has said the government would have collected $30 million to $40 million annually in revenue from the gambling business.

However, the businessman said based on the current market it would have been more like $15 million.

"I would love to see our $15 million a year build a school today and a hospital tomorrow," he said, adding that the Florida Lottery has donated millions of dollars toward education.

"We don't mind it being legalized," he continued. "It's a gray area that has not been enforced. We don't like the idea of being illegal businessmen. So the tax was never an issue. It's not a good feeling walking in banks and other financial institutions and being known as some number man, or getting the headache of getting kicked out of banks. We're mostly just guilty by association... because you're known as a number man, you're frowned upon and they just don't want to do business with you."

He said many Bahamians have pre-conceived notions that the gambling business leads to the bankruptcy of many people. However, he said the majority of people spend about $3 to $7 on a ticket to gamble.

"The average persons does not spend excessively on numbers. It's just the volume. You give a small investment for a big return. These people are putting in $1 and getting $900," he said.

Asked whether he considered the numbers business to be illegal, the businessman said, "We consider it to be illegal in a sense. The walk-in part of business could fall into the illegal category but the Internet is free for all."

Asked what he would say to the government, if given the opportunity, he said, "We're not complaining, we're not crying but it's just reality. We need to know where do we go from here."

June 9, 2010

thenassauguardian

Bahamas Blog International

Fort Charlotte MP Alfred Sears and Fox Hill MP Fred Mitchell both agree that the Government should Legalize Gambling for Bahamians

Mitchell, Sears say govt should legalize gambling
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:



The government ought to find the "courage and conviction" to legalize gambling in the country, according to two opposition MPs, who recently voiced their support for such a move.

Fort Charlotte MP Alfred Sears and Fox Hill MP Fred Mitchell both agree that the Ingraham administration should immediately legalize some form of gambling for Bahamians.

Their announced support of gambling came more than a week after the Cabinet Office announced that the government will not proceed with the legalization of gambling. The government has instead concluded that a referendum should be held after the next general election so Bahamians can have the final say on the divisive issue.

However, Mitchell said he believes something should be done now.

"[Prime Minister Hubert Ingraham] is unable to exercise the courage of his conviction in the area of legalizing gambling in this country," said Mitchell in the House of Assembly during debate on the proposed new budget last Thursday. "I support the change in the law which will legalize gambling to all Bahamians without any discrimination whatsoever and the regulation of the gaming that's presently going on."

He added: "I need go no further than to say that the two religious leaders who last spoke on this issue, both the Roman Catholic and the Anglican, saw no intrinsic moral evil in gambling and so therefore the case against it in my view rests and the government should without delay move to allow Bahamians of adult age to exercise their specific choice of entertainment or investment if that is their desire. I do not gamble."

Sears said instead of opposing gambling, the churches should teach their members discipline.

"I heard the prime minister talking about taking away the concessions from persons under the Industries Encouragement Act (IEA)," Sears said as he made his contribution to the budget debate last week.

The prime minister announced last week that those businesses which have benefited from tax concessions for five years or more would have to pay 10 percent stamp tax duty on imports starting July 1.

Sears added that he would like Ingraham "to be just as biggety and just as bold" with the people affected by the IEA as he is with Atlantis.

"Concessions should be to attract," he said. "But we are still giving [them] away. You are taking [concessions] away from Bahamians, but yet Atlantis is getting $4 million cash and they're getting it to promote casino gambling. So you mean to tell me that my tax money is being given to Atlantis to promote casino gambling? And let me disclose right now that I support [it]. I represent Mr. Craig Flowers and I personally support the legalization of local gaming in The Bahamas."

Flowers was charged in a magistrates court several months ago with allowing his business to be used to conduct a lottery. The case is ongoing.

Sears said Bahamians will continue to gamble, if not in The Bahamas, elsewhere.

"You cannot have Bahamians going to Miami to buy lotto and my tax money is being spent to attract people here to gamble," he continued. "And my cousin and the church members are working in the casino. And the churches are going to Atlantis and asking them to let them have their functions in Atlantis and walking through the casino. Mr. Speaker, we must learn to make the tough decisions about public policy and not pander to special interests. Is it in the interest of The Bahamas?"

Ingraham told The Nassau Guardian recently that investigations had determined that the government could have brought in substantial revenues annually from the legalization of the numbers business.

"Quite candidly, I had hoped that we would have legalized the numbers business," Ingraham said.

"I'd hoped that we would have collected between $30 million and $40 million annually in revenue from the gambling business. Our investigations revealed that that's the kind of revenue we would have gotten as taxes.

"And I was hoping that we would not have to impose taxes on the Bahamian people, at least not to that extent, but that is not to be. So we have to get the money anyhow to provide the services that we have to provide to the population of The Bahamas."

The Cabinet Office statement said the government made the decision not to proceed with the legalization of gambling "after consultation with a wide range of community leaders and other citizens, including leaders of the church."


June 7, 2010

thenassauguardian

Bahamas Blog International