By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
A leading web shop operator yesterday slammed the Canadian-owned commercial banks as “reckless and irresponsible” for not accepting deposits from a legalised industry, arguing that they were exposing their “true agenda”.
Island Luck’s chief executive, Sebas Bastian, questioned how the banks could justify their position when they were also accepting casino related deposits.
He told Tribune Business this suggested their stance was “ not about the what, but it is about the who”.
“I feel that their latest statements are reckless and irresponsible, and nothing more than a smokescreen to push their real agenda,” Mr Bastian said. “The reason I say that is because last November we passed the Gaming Bill, which made it lawful for casinos and web shops to engage in interactive gaming.
“These very same casinos do business with these banks now. However, their policy is not to do business with [web shop] gaming operations. I don’t know how one form of gaming is acceptable on one hand, and not acceptable on the other hand, which only leads one to believe that it’s not about the what but it is about the who.”
Mr Bastian implied that the position of the Canadian-owned banks - Royal Bank of Canada, CIBC FirstCaribbean and Scotiabank - was discriminatory, and that they were failing to live up to their obligations to finance the dreams of Bahamian entrepreneurs and spur economic growth.
He challenged the banks to present their plan to promote Bahamian entrepreneurship and better the Bahamian economy, saying that barring that, “they should have nothing to say”.
Mr Bastian added: “Historically they have always found creative ways, and financial lingo, to impress against the average Bahamian trying to better themselves in this country.
“The Government must protect the sovereignty of our country. The banks were brought here to promote investing and savings, but look at their actions today, with them laying off Bahamians while keeping foreigners employed, along with the fact that they are doing business with one set of people in the same business, but opting not to do business with another group in the same industry.
“You have a better chance of winning the lottery twice than getting a loan to start a business with the bank. Just look at the fees they are charging. Where in the world do you pay to deposit money into a bank that they are going to lend to other people to make money from? Only in the Bahamas. All of their actions beyond gaming are totally out of the scheme and initial objective that they were originally brought here to achieve.”
“I cry shame on them,” said Mr Bastian. “Instead of wasting time telling the people how you are going to disenfranchise the gaming operators, tell us your plan to better our economy. Unless you have a plan, in my opinion, you should have nothing to say.
“If you don’t have anything to further help Bahamians toward their goals and passions, and further this country, then you should have nothing to say at all.”
The Island Luck chief executive yesterday launched the company’s mega casino at Village Road, noting that it was taking all the risk.
“This has been a location that we had planned long before the Gaming Bill had been passed. We don’t call it premature, because the way we do our business is we always try to be practical, and the risk lies on us,” Mr Bastian said.
“Currently it is lawful for us to operate in this location. This location was a part of our initial affidavits. It is not not a new location, it has already been registered with the Gaming Board. The risk really lies with us. If we don’t get a license we will have one beautiful location for rent. Maybe one of our colleagues will rent it from us.”
Mr Bastian added: “Island Luck has always kept the pace, being innovative and first in, introducing new things to enhance the customer experience.
“We remain optimistic. Although there are no guarantees, it’s just a gamble that we are willing to take at this time to keep our expansion, rebranding and vision for our company on course. If we are not licensed, I will be happy to know I gave it my best shot and have done what I have always done to defy all odds, and offered the best possible product within the industry that I am operating.”
Comments
Sickened 9 years ago
Mr. Bastian, what you fail to realize is that all of the money you have made here is proceeds of crime and no-one should touch it. The Canadian banks are basically sending a message to the Government of The Bahamas saying this very point. When and if you get licensed you will still have plenty of dirty money that no respectable bank (except JP Morgan) would want to touch.
ThisIsOurs 9 years ago
Can't buy respectability
duppyVAT 9 years ago
Webshops are not the first "proceeds of crime" money in this country!!!!!!!!!!
ThisIsOurs 9 years ago
The more he speaks I'm convinced he's not the brain behind the operation
TheMadHatter 9 years ago
I know that one of the requirements of opening a business chequing account is to have a business license. The bank wants a copy of that.
Instead of questioning why the Canadian banks won't do business with him, he should be questioning why the Bahamian Govt won't give him a business license.
GrassRoot 9 years ago
This comment was removed by the site staff for violation of the usage agreement.
banker 9 years ago
Who ever made the comment about this man not being the brains behind the operation is right. Banks have to follow a KYC (Know your customer) chain of compliance. That means they have to know the origin of the money and the individuals behind it -- not just from the webshops, but from the customers of the webshops as well. The webshops do not do KYC and hence they are perfect venues for money laundering. Nobody launders money through a casino because of strict oversight. If the CEO of Island Luck can't see this, he indeed is a low fence - one brick short of a load. The figurehead chairman should know this as well.
JohnDoe 9 years ago
Wow. To speak so confidently and to be so wrong. Before you speak any further please read the Gaming Act and its regulations. Web shops, by law must comply with the same kyc requirements of Bahamian banks pursuant to the FTRA. Further they are regulated by the same regulator as Casinos in the Bahamas so there is no difference in oversight. I do not know the chap, but what I know is that we should arm ourselves with knowledge and facts before spewing unfounded opinions and taking at face value everything someone tells us.
banker 9 years ago
I would kindly suggest that you familiarise yourself with international standards, not Bahamian ones. I would also point out the KYC due diligence, several years ago, was transferred from a central body with rubrics to the individual institutions themselves, relying on their compliance procedures instead of central codified ones. In other words, it "we offer guidance, but no directives, and if you are wrong, it is your fault". That is why the Canadian banks are barring these essentially illegal funds. Your admonition about arming one's self with knowledge should be taken personally and not be skin deep -- with all respect.
How can you say that KYC is effected with a webshop account that is opened with dubious paper credentials by a disinterested employee who merely glanced at documentation when the account was opened?
JohnDoe 9 years ago
Clever debate trick of when in doubt start talking even more confidently and begin to generalise, exaggerate and obfuscate. That does not change the fact that you were dead wrong in your statement above. Now you claim that under "international standards" "KYC due diligence several years ago, was transferred from a central body with rubrics to the individual institutions themselves, relying on their compliance procedures instead of central codified ones. In other words, it we offer guidance, but no directives, and if you are wrong, it is your fault". Do you really believe that? So are you saying that each Bahamian Bank or any bank in the world in any country, for that matter, can have its own kyc standards with no duty or obligations under local kyc laws? Please cite which central body in The Bahamas transferred such authority to "individual institutions" as you state above and under what legislation was this transfer effectuated?
banker 9 years ago
Prior to 2011, ACAMS, which has international reach in publishing KYC and AML standards, published a Capability Maturity Model that re-stated Initial, Repeatable, Defined, Managed and Optimized models for KYC that eliminated specific rubrics and instead offered a simplified model with leeway for country-specific implementation. The specificity of the rubrics were taken away with the new model, and instead the compliance onus was placed on member implementation and not an ACAMS implementation algorithm. I am not talking about Bahamian legislation, I am talking about international KYC banking compliance procedures. And as to your questions, yes, each jurisdiction can have its own implementation procedure as long as it aligns with the ACAMS model of high level compliance. It is a huge problem for financial institutions, because in the old days, one could tick off a check list of compliance items. Now, one must insure KYC compliance without being specifically told how to do it, and if you get it wrong, you are censured and blacklisted. Generally, the compliance procedures are inspected but not tested rigorously until this is a compliance failure.
So in effect, different banks can have different implementation algorithms for KYC and they still all adhere to the high level KYC principles. The efficacy of the fit and form but not the function of KYC implementation models are not externally validated and verified with any rigor until there is a compliance failure.
Does this explain it for you in greater detail?
JohnDoe 9 years ago
Go back to wiki and read that again until you understand it! And by the way if you are going to use wiki at least use the latest version.
banker 9 years ago
You're too funny. My master's degree is in Machine-Learning to identify Customer Transfer Models for profiling and Transactional Behaviour Dynamic Models from Big Data on client accounts for KYC Compliance Planning. Look that up on Wiki! LOL!
ThisIsOurs 9 years ago
You lost me at behavior dynamic models. But yay:) a lot of people think compliance is accounting for all the money they will earn after regulation, they fail to realize that there must be some independent verification of the source of every single dollar they've accumulated before regulation as well . Honestly I don't see how it's possible, not when the US may have indicted your business partner for human smuggling...how would you separate what was earned where?
banker 9 years ago
You're absolutely right. BTW Behaviour Dynamic Models are particularly powerful things. Let's supposed a webshop does $300,000 a month. Let's suppose that it varies with a given standard deviation (a standard deviation for a particular set of data tells you how much the daily deposits vary by). Now lets supposed that the webshop shows that for two days out of the month, the deposits are way above the normal plus a standard deviation. In other words the deposits suddenly start to swing upwards from normal behaviour. If normal behaviour is resumed, then those transactions are suspicious. It looks like someone is laundering money. A computer monitors these transactions with a model. The model is built from the customers previous history.
But as you point out, that is after the fact. KYC also involves knowing who deposited those funds into your legitimate business, and the source of those funds. I am sure that the webshops do not do due diligence. They take everyone's money. I see illegal Jamaicans buying numbers and I'd like to examine the due diligence done on them.
And it is indeed laughable to think that you can deposit a businesses money into a chartered bank if your partner has been indicted by the US Dept of Justice.
duppyVAT 9 years ago
Soooooooooooo, did Royal Bank take the Bay Street Boys bootlegging money back in the 1920s??????????? Did the Canadian banks take Pindling's drug boys' money back in the 1970s-80s?????? What is the difference now??????????? All is blood money....................... SMH
banker 9 years ago
The difference is Al Qaeda, 9-11, FATCA, the John Doe subpoena, ISIS, ... the world has changed considerably.
ThisIsOurs 9 years ago
Branville McCartney told Tribune Business that the Bill makes the Bahamian gaming industry “a laughing stock”, because it provides for ministerial discretion to grant web shop operator licences to persons convicted of gambling-related and other offences. Nov-14
ohdrap4 9 years ago
it might well be that he is right.
But, will anyone have the guts to undo this legalization in the future?
I wonder.
I fear for people who buy condos from them. Once they have washed sufficient funds by selling to people whose income is legal, they can leave those communities anytime, unfinished or unkempt, and the home owners will have to finish it up.
has happened in other countries.
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