The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government has collected $20 million in back taxes and penalties from web shops since November 2014, and expects to announce licence winners under the new regularised regime by May or June 2015.

During his contribution to the 2014/2015 mid-year Budget debate, Obie Wilchcombe, who has responsibility for gaming, said the transition process to a legalised web shop industry has gone “very smoothly”.

“We have had issues from time to time, but the lawyers from the Attorney General’s Office, the gaming houses and the casinos have had issues with various things, and we have sat down and been able to work out things out amicably,” the Minister for Tourism said.

“I am so very pleased with the fact that you have a professional core of people working in these gaming houses. If you look at the work they have been doing, they have been providing us with the information that  we required, and when mistakes have been made they are prepared to correct them and come back to us.”

“Since November to this day we have already collected almost $20 million in back taxes and penalties. We are not finished yet because we are hoping to cause for the process to move smoothly, so that by May or June we will have announcement about the persons who have been awarded the various licenses to proceed,” said Mr Wilchcombe.

His comments rather gloss over the disputes between government and operators over several key terms in the Gaming Act that have delayed the licence tender process, and the transition has not been as “smooth” as he suggests.

    Tribune Business had reported last month that the Government and web shop industry had been at at odds over how the sector’s ‘retroactive taxes’ were to be calculated, although sources yesterday confirmed that the issue had been resolved.

A government notice published in the newspapers this week confirmed Tribune Business’s exclusive revelation last week that the deadline for web shops to respond to the licence tender had been extended from February 20 to March 10.

This is so every operator can understand the agreed ‘rules of the game’, and know how they have to calculate their retroactive tax burden and comply with all the Government’s regulatory and legal requirements.

According to information from the Ministry of Finance, there were at least 251 web shops in operation, run by 35 different companies, in 2013.

Licence applicants must pay $5,000 plus another $2,000 to cover the license application fees for each gaming house premises license. A $100,000 deposit, plus another $30,000, is required to cover investigation costs into each gaming house premises license application.

While the tender document sets no limits on the number of licenses that can be issued, the terms set out suggest that the sector will have a smaller number of operators and web shop locations.

    The Gaming Board tender also stipulates that the interactive games made available by operators “must have a theoretical and demonstrable return to player percentage of not less than 75 per cent”.

And an “essential minimum requirement” of the tender is that applicants make ongoing contributions, for the duration of their licenses, to sustainable community and social causes such as education, health care, sports and the arts, culture, charities and public parks and spaces.

Similar demands are made in respect of “sustainable’ corporate social investments in the Bahamas, with applicants required to devote a “minimum amount of 1 per cent of taxable revenue” to each.