Canadian Banks Stand Firm On Web Shop Bar


Tribune Business Editor


CIBC FirstCaribbean’s Bahamian managing director yesterday confirmed the three Canadian-owned banks were standing firmly behind their position not to accept deposits from a legalised web shop industry.

Marie Rodland-Allen, in response to a Tribune Business question, said her institution - and the likes of Royal Bank of Canada (RBC) and Scotiabank - were prohibited from accepting web shop gaming deposits by the bank’s worldwide policy.

“As it stands we, along with the other major Canadian banks, have made a decision that we will not be accepting those funds,” Mrs Rodland-Allen said, in relation to licensed web shop gaming operators.

She explained that “a bank-wide policy” prevented CIBC FirstCaribbean accepting deposits, or dealing with any funds, that may be generated by Internet gaming.

RBC has already indicated that its resistance to accepting web shop deposits lies in its own global policy that prevents it taking in Internet gaming-related monies.

And, with both Commonwealth Bank and Fidelity Bank (Bahamas) having previously stated they would not accept money from a legalised web shop gaming industry, due to fears they might lose their US correspondent banking relationships, it appears only Bank of the Bahamas is left to become the sector’s ‘bank’.

Paul McWeeney, Bank of the Bahamas’ managing director, last week confirmed to Tribune Business that the BISX-listed institution had received “clearance” from its own US correspondent bank, JP Morgan Chase, to accept deposits from a legalised web shop industry.

While this will likely ensure a key Government policy objective that drove moves to legalise it, namely getting the multi-million dollar sums it generated into the formal economy and banking system, the rejection by all institutions other than Bank of the Bahamas nevertheless still represents a blow for the Christie administration.

For Bank of the Bahamas, which the Government owns via a majority 65 per cent equity stake, represents a small fraction of Bahamian commercial banking system assets. This means that a legalised, licensed web shop industry will still be shut out from most of the financial system.

Prime Minister Perry Christie previously disclosed he has met with RBC in a bid to persuade it to accept web shop deposits, but seemingly to no avail.

However, attorneys for the web shop industry and others have questioned why the Bahamian commercial banking industry is so reluctant to accept its funds, effectively accusing it of ‘double standards’.

Alfred Sears QC, attorney for the Gaming House Operators Association, has questioned why the banks are so reluctant to do business with legalised web shop operators when the latter are required to adhere to the same anti-money laundering and Know Your Customer (KYC) standards.

He suggested there was “a disconnect” between the banks and their rationale for not accepting web shop deposits, something that seems to be borne out by the Canadian-owned banks’ concerns.

While their global policies prevent them from accepting Internet gaming-related deposits, the Gaming Act specifically forbids the web shop industry from accepting online bets - a bar intended to make sure its customer base is restricted to Bahamian and local players only.

Mr Sears had told Tribune Business in a previous interview: “It’s not adding up to me.

“The gaming house operators have established structures which are equal or comparable to the same governance structures of the banks themselves in terms of the quality of people.

“There is a disconnect in this public conversation. What is there to object to? If the industry has the same governance structures, and is obliged to have the same KYC, the same anti-money laundering obligations, the same proceeds of crime obligations, why would there be an outright rejection?”

Similar sentiments were echoed by prominent businessman Dionisio D’Aguilar, who said that as a shareholder he had no objection to Bank of the Bahamas accepting web shop gaming deposits.

Mr D’Aguilar said the fear of losing correspondent banking relationships, and access to the US financial system, had always been cited as the reason why Bahamian commercial banks would refuse to accept deposits from even a legalised web shop gaming industry.

Yet JP Morgan Chase’s decision, he added, questioned the validity of such a position, as why would such a major international and US bank raise no objections to Bank of the Bahamas accepting such funds.

“It puts doubt into what the other banks are saying,” Mr D’Aguilar told Tribune Business. “Why would JP Morgan Chase, a world-renowned US bank, accept it and the other correspondent banks not?”


duppyVAT 5 years, 3 months ago

Perry is in a bind ................ how is he going to get around BNS,CIBC and RBC????????


observer2 5 years, 3 months ago

BOB on dey own...correspondent will accept deposits until they stop


JB357 5 years, 3 months ago

Looks like BOB will be on the come back trail closer than expected with all that money.


The_Oracle 5 years, 3 months ago

Because the overnight "washing" of the money doesn't work. To create a Gaming industry from scratch is one thing, legislation, level playing field and same starting line, but that is not what we have. We have pre-existing millions, if not billions, the proceeds of illegal activity. Is there not legislation for the confiscation of the proceeds and assets from drug dealing? Not that the Government ever moved on that with any moral impetus, save the occasional boat or vehicle. And when BOB is flush with cash, Will it become the pariah of the Banking world? And its shareholders? True to form, they never think these things through. The Numbers industry has created a cash economy that the drug industry must envy, and that the Government fears.


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