By KYLE WALKINE
Tribune Staff Reporter
THE government will likely award a maximum of eight web shop licences as it moves to regulate the sector, Tourism Minister Obie Wilchcombe told The Tribune yesterday.
According to information from the Ministry of Finance, there were at least 251 web shops in operation run by 35 different companies in 2013.
Mr Wilchcombe, who has responsibility for gaming, said placing a cap on the number of web shops is part of the government’s efforts to “protect the integrity” of the country and closely monitor all the players involved.
“We’ve talked about five or six licenses to provide,” the minister said. “But again, some people have discussed eight. I don’t think it’s going to be 15 or 20. I think we’re going to have to talk about the number. But the most I think will be (is) about eight, if that high.”
“If the system is not managed correctly then we would probably end up with more underground games going on and that’s not what you want,” he added. “What’s important for the Bahamas is always the integrity of the Bahamas. We have to ensure that when we put in place the licenses and the regulation that the companies that are going to pass through the process are going to be able to maintain and live up to the expectations because we’re going to be closely monitoring.”
The government also plans to create a compliance unit to serve as a watch dog for the industry, Mr Wilchcombe said.
On Monday, The Tribune reported that the owner of a small, newly formed web shop feared that the government’s plans to regulate the sector would force smaller operators to join up with larger operations or drop out of the market.
The owner of Let’s Play, who did not want to be named, also took issue with the government’s proposed plans to impose a $1 million licensing fee as well as a performance bond on the sector. The web shop operator said the proposed fees are “unfair” to smaller businesses and in the best interests of the “big number bosses.”
“The government is just basically siding with the bigger boys who have been in this game for years,” the web shop owner said. “It may be a one-sided thing whereas the government is giving them what they want and that is as little competition as possible.
“It wouldn’t be fair,” the businessman added. “I admit the market is saturated. But what the government plans on doing isn’t fair to the small man. Like they said in their campaign speeches they ‘Believe in Bahamians.’ I’m a Bahamian. I found a business venture that I want to capitalise on and I jumped on it. They’re basically telling the average Bahamian man under the age of 30 that you can’t get involved in this business because it’s only for a selected few. That, I think is not fair.”
However, Mr Wilchcombe said the young entrepreneur may be speaking out of turn as the government has made no final decision on the licensing fee or performance bond that operators will have to pay.
He said the proposed $1 million fee and the proposed 15 per cent tax on the industry were figures that were under consideration by officials in the former Ingraham administration.
“We’re seeking to work with everybody,” Mr Wilchcombe said, debunking claims that the government is operating in favour of the bigger web shop companies.
“I think at the end of the day we’re trying to find a situation that’s equitable to all. I think in a regulated business it comes down to competition. It will be mindful for them to wait until all the facts are out there and then come and talk with us further to see where we are.”
Mr Wilchcombe said he has been briefed several times on what rate the government should tax the web shop industry and added that he expects another briefing today.
He said the tax on web shops will be determined based upon the sector’s earnings which are presently being audited.
“Again, it’s the revenue structure for the country,” he said. “It has to be a workable number, so we don’t have an uncontrollable proliferation and it also depends on what the industry can afford.
“You don’t want to tax the industry to the extent that the industry is going to find itself in an advantage over any other industry. But it has to be based upon good business practices and an understanding of the work that has to be done as well as the technology that has to be put in.”
The tourism minister is expected to table legislation to regulate the web shop industry when the annual budget debate is complete.
Prime Minister Perry Christie said last week that once the sector is regulated, web shop taxes will be retroactive to July 1.