GAMING BILL 2014
A Bill for an Act to provide for the modernization of the Gaming Regulatory Dispensation in The Bahamas, the continuation of The Gaming Board for The Bahamas; The Licensing and Regulation of Gaming Activities and Matters incidental thereto Enacted by The Parliament of The Bahamas
A contentious and controversial poll from the people on the regularization and taxation of what were then hundreds of “illegal , unlicensed lottery Web Shops” and the rejection of support for a National Lottery in January 2013, are the pre-cursors to a modernized, energetic and performing Gaming Act and Regulatory regime in the Bahamas today.
The new, provocative and detailed Act was brought to Parliament on 11th September 2014 and under vigorous debate passed the muster in the lower House and in the Senate and was signed into law by The Governor General.
Gambling in the Judaea Christian culture in the Bahamas formed the most enigmatic vulnerability and expose of the Bahamian mindset. Pastors preached it was a deadly sin. Full stop. When Casino Gambling was formally introduced in 1965 with the licensing of a Casino in Freeport and the Casino on Paradise Island, Churches galvanized their memberships to oppose and pulpits became MowTown hits for fiery sermons on the gates to damnation which begin with gambling.
All the while in the clear and present open, Bahamians participated in any range of illegal gaming at hundreds of night clubs which offered Poker, Black Jack, Tonk and Dice (craps) games with a detailed look out man for the Police and a very experienced card and dice shark –The House Man-supervising these games. And then there were the Number Houses. Father Allen, the American businessmen who pioneered the “Chicken in the bag” national dietary past time also ran a Numbers operation. Percy Munnings, who was elected National Treasurer of the ruling Progressive Liberal Party unopposed in every consecutive national convention has his Numbers operation. Gene Toote a likeable old curmudgeon started his chicken in the bag business as well alongside his Numbers operation on King Street. Laverne Bowe Stewart and Audley Archer operated out of the Zanzibar on Blue Hill Road and another location on Martin Street. The Haitian community had its own Numbers business ran by its locals and Haitian men found ready employment as Numbers Runners/Sellers for the Number houses. Talbot Stokes Thompson, another big operator shot a man during a Police Raid on his Numbers compound and went to jail.
Yet Powerful sermons from the White and Black segments of the Methodist Church, H. W. Brown was raining fire and brimstone at the historic Bethel Baptist Church, Alexander Black was waxing at Annex Baptist on Wulff Road and Talmadge Sands was quietly extolling the pitfalls of Casinos and gambling at Zion Baptist on Shirley Street.
The irony is the Church leaders had this compromise that their job was to first save the souls of their Bahamian congregations. So if Tourists from faraway places wanted to come to the Bahamas and lose themselves in the Casino that was alright by them.
Alright until the PLP government in keeping with recommendations made by a Royal Commission of Inquiry on the future conduct of Gaming in the then colony created this unpardonable offence of wanting to expand Casino licenses.
The issue was so explosive that the most powerful man, next to Prime Minister Pindling in the Cabinet was the Minister for Finance Carlton Elisha Francis. Francis was born in the United States to Bahamian parents. Highly qualified as a mathematician at prestigious universities, Francis was also an exemplary leader in the Baptist church.
The Baptist were the strongest denomination to give the fledgling PLP in Opposition political support. Now in Government it appeared as if the PLP had forgotten who the boss was.
The Baptist lost their voices, tambourines and church hats rallying against the expansion of Casinos. Francis broke with the Cabinet and when the Communication was made to the House of Assembly on the Government’s intention to expand Casino Gambling, Francis in a moving speech resigned his portfolio on the floor of the House of Assembly.
By 1972, the Bahamas was on the road to National Independence from the United Kingdom. The issue of Casino and Gambling form a very revealing ethos of the prevailing view on Casino Gambling. The Penal Code already codified all other areas of local gambling as illegal and stiff penalties and prison terms could be had for a simple game of Black Jack amongst friends. Police targeted Numbers Runners whose receipt books were used in the Magistrate Courts to convict and jail many.
These religious positions are necessary to understand the similar energies in 2013 on the Government’s question to the Bahamian people on two issues:-
- Do You Support the Regularization and Taxation of web shop gaming?
- Do you support the establishment of a National Lottery?
Polling was conducted on the 29th January 2013 under the auspices of the Parliamentary Commissioner and held at Polling Stations in Constituencies across the country, very much the same as a General Election of the ill-fated Referendum of 2002.
Religious Leaders respectfully opposed and lobbied their members to turn out the vote. The former Government while in office had begun the process of discussions on regulating the Web Shops changed course and its Leader Hubert Ingraham advised he would be voting NO to the questions.
Mr. Ingraham would confide to others later that his position changed after a visit from a leading protestant prelate who asked if the Prime Minister wanted to risk his legacy being shadowed by the legalization of Web Shop gaming for Bahamians.
On February 6th, 2013, the Bahama Journal reported the official count at that point was as follows:-
- On question #1 – 48,012 voted NO and 30,767 voted YES
- On question #2 – 48,012 voted NO and 30,767 voted YES
This was followed by calls from political interest and church leaders for the Web Shops in the country to be immediately closed and for the Police to enforce the law.
The Web Shops were also before the Supreme Court seeking clarity on their position. Prime Minister Perry Christie advised the Web Shops to close. New Court decisions kept the situation in limbo.
On 11th September 2014, the Christie Government laid on the table of the House of Assembly a compendium of new legislation to modernize, regularize gaming and the casinos and to bring the web shop into a lawful and regulated circumstance.
This is how Perry Christie summed it up in a recent chat:-
“ I saw Percy Munnings having done more for the social advancement of so many down trodden and neglected by his charity and generosity than all the combined forces of opposition hiding in Pindling’s office because the Police were coming for him. I saw Gene Toote who gave his all in support and encouragement to help Hubert Ingraham become Prime Minister having to sit in a jail cell because of a police raid. I saw Laverne Bowe Stuart, out on the corner of Blue Hill Road every morning at sun up parceling out lunch monies and text and exercise book and geometry set monies to needy students and their parents. Yet he had to dodge and hide. How could we continue to operate like this in a country where the Bahamian people want to do this and are doing this and we have a system which makes them less than what they are? In taking the risk to legalize Web Shop gambling, I lost my Government. But I had said in 2001 that I would rather lose doing that which is right, than win doing that which is wrong,” Mr. Christie has said.
Here are some takes from the historic Communication Prime Minister Christie made in Parliament in tabling the legislation:-
TRANSFORMATIVE LEGISLATION FOR THE GAMING SECTOR
“This Legislation is set to transform The Bahamas into a vibrant internationally competitive gaming jurisdiction , anchored by solid and detailed legislation which not only honors the international obligations of the Government, but which will also act as a catalyst for the generation of revenues, economic development and the advancement of the public good with a socially responsible framework”.
WHAT TAXES, EARNINGS AND BENEFITS WILL LOOK LIKE
The economic impact from these comprehensive gaming measures will be considerable, and will stimulate economic growth for the public benefit as well as enhance Governments revenues and fiscal policies. From unverified information received from the majority of the web shop operators, the following projections have been calculated and are subject to change once audited or verifiable financial statements are produced, and the licensing process or gaming houses have been completed.
Penalties, back business license fees and applications fees payable during the transition period are expected to yield some $25 million.
“On an annual basis during the first full year of operation, the higher of a gaming tax at the rate of 11 % Gaming tax plus 2 % social contributions and annual monitoring fees are expected to yield some $22 million, on a gaming tax of 25% or earning before deduction of interest, Taxes, depreciation and Amortization are expected to yield some $29 million. It is expected that the current level of employment estimated around 3,000 persons should stabilize and further improve in a regulated environment.”
PROBITY IS A MUST
The most fundamental cornerstone of any credible gaming dispensation anywhere in the world can be distilled into a single word. That word is “probity”. Probity focuses on establishing that any given person who seeks to be involved in the gaming industry whether as a regulator or as a license holder, is fit and proper to do so and moreover remains fit and proper on an ongoing basis. The currency of probity is therefore information concerning the relevant individual ranging from information regarding the personal history of that person, or business history, where that person is a corporate entity, to information relating to the financial history, capacity and dealings of that person as well as criminal history and associations with other persons. As a means of ensuring that prospective participants in the gaming industry can be relied upon to manage their gaming operations in a manner which is fair and honest and complies with the requirements of the law, the Gaming Bill empowers the Gaming Board to conduct comprehensive probity investigations into applicants for licenses and certificates of suitability against the qualification criteria set forth in the legislation. The license application process therefore involves the disclosure of wide ranging and extremely sensitive personal and financial information about that person applying for the license. Furthermore the obligation to disclose this information extends to all persons holding stipulated levels of financial interest in the prospective license holder which is generally set at a threshold of five per cent.
It follows that in the performance of its statutory mandate the regulator and its staff will become privy to extensive information regarding applicants and license holders which both sensitive and proprietary in nature. Accordingly it is equally important to ensure that the custodians of this information should meet appropriate standards of personal probity, and will respect and maintain the confidentiality of the information at their disposal.
THE EYES OF THE WORLD ARE ON THE BAHAMAS
All nations are under the global microscope that strives to ensure multilateral compliance with proper financial regulatory standards and the avoidance of risks. In that context, the international community is also placing a heightened focus on Casinos and gaming as it looks to cause countries to clamp down on the potential for money laundering and related crimes, including the financing of terrorism. International standards have been developed and agreed and states are regularly being subjected to peer reviews and assessments to determine their level of compliance with those standards, the risk that present themselves and the measures that are being taken to mitigate those risks.
The Bahamas is no exception in this regard and the eyes of the world community are clearly upon us. Within the Organization of American States there exists a Committee of Experts for the Mechanism for Follow Up on the implementation of the Inter-American Convention against Corruption. That Committee will be making an on-site evaluation of the Bahamas over the period September 23 to 25 in 2014 to determine the level of compliance with the provisions of that convention.
WE COULD NO LONGER RECONCILE THE INCONSISTENCIES
It became increasingly apparent to the government that there is a need to regularize, to right size and to rationalize the web shop industry in The Bahamas which in the past has not been licensed and regulated. This need arises firstly from the fact that there is an established public demand within The Bahamas, for the services offered by this industry, which can no longer feasibly be reconciled with the overall prohibition or participation in this form of gaming by persons living or working in The Bahamas. Moreover, the nature of the services offered by the Industry, in particular its on-line offering, poses a range of particular risks, which have been highlighted earlier and which can only be effectively addressed through a licensing and regulatory regime which is both legally enforceable and specifically tailored to meet the prevailing international standards of best practices in the context of prevention of money laundering and terrorist financing.
There is also a need to ensure that operations of this nature will at all times be owned exclusively by Bahamian citizens. The licensing of these activities will enable the Gaming Board to monitor and the Minister to approve the corporate ownership structure of license holders, as well as the procurement of financial interests in such license holders.
BOLSTERING THE BAHAMAS’S IMAGE
The regularization of the Web Shop industry will also play a major role in entrenching in The Bahamas a gaming dispensation in which there is complete clarity as to which conduct is legal and which is illegal and in which the rule of law holds sway. This will not only bolster the image of The Bahamas as a jurisdiction which offers a clear cut legislative environment for the conduct of all types of gaming activity but will be of enormous benefit to its people.
REGULATIONS TO ALTER PREVIOUS DISTINCTIONS
While the new legislation ill presently permit non-Bahamian tourists to participate in casino gaming and Bahamians and residents to participate in gaming in the Gaming Houses, the new legislation goes further to empower the Minister responsible for Gaming to make Regulations permitting participation in the types of gaming contemplated in casinos and gaming houses by any category or all categories of persons. Such Regulations may also regulate the circumstances under which such participation shall be permitted. As a result, when promulgated, such Regulations would end the distinction between categories of persons allowed to game in casinos and gaming houses, as well as the types of games offered in casinos and gaming houses.