The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Democratic National Alliance’s (DNA) leader yesterday said he was “amazed” that formerly illegal web shop operators were now themselves complaining about rogue rivals, charging that the Government had failed to achieve its objectives for the industry.

Branville McCartney implied to Tribune Business that there was an element of hypocrisy to newly-legalised web shops’ complaints, given that they had profited hugely from operating outside the law for so long.

And with illegal operators still managing to exist, the Government not having put in its own systems to monitor the industry, and most commercial banks still refusing to accept web shop deposits, the DNA leader argued that the Bahamas was “in the same position” as that prior to the Gaming Act’s enactment.

“It’s very strange; a strange set of circumstances,” Mr McCartney said of the ‘rogue operator’ complaints from Island Luck’s Sebas Bastian, and FML chief, Craig Flowers.

“About two-and-a-half to three years’ ago, they were all illegal and carrying on as if they were legal. No one said anything about it.

“It’s amazing that they’re now complaining about what they did: Operating illegally, as they were three years ago. It’s amazing to hear this sort of thing.

“You’re seeing now the web shops almost fighting among themselves in terms of other persons getting into the game, for want of a better word.”

Messrs Bastian and Flowers, together with Raymond Culmer, chief executive of Chances Games, all argued that illegal operators are now taking between 20-30 per cent of the web shop market.

Chief among their complaints is that rogue operators are still using the handheld devices legalised, fully licensed web shops are now prohibited from employing. And Mr Culmer said three illegal chains had a major presence on Grand Bahama.

Although the legalised web shops may be exposed to charges of hypocrisy, as argued by Mr McCartney, allowing rogue operators to persist is unfair to those businesses that have paid their fines, back taxes and fees to become regulated.

The situation also threatens to undermine the integrity of the Gaming Act and the Government’s objectives in legalising, regulating and taxing web shops, while also depriving it of due revenue.

And allowing illegal gaming, and the sums of cash it generates, to continue could also attract unwanted international scrutiny in terms of the potential money laundering danger it represents.

Mr McCartney, though, said the continuation of illegal web shop operations was a further sign that the Gaming Act 2014 and accompanying regulations had failed to achieve the Government’s goals.

With only Bank of the Bahamas willing to accept web shop monies, the DNA leader said the industry and the multi-million dollar sums it recycled remained outside the formal banking and financial system, thus exposing the country to potential money laundering vulnerabilities.

Mr McCartney also argued that the industry remained “unregulated” because the Government, through the Gaming Board, had failed to implement its own system for monitoring the web shops and their transactions.

“They cannot tell you to-date or verify who goes into the web shops, who plays those numbers, and how much is collected,” he added. “They can only go on what the numbers boys tell them.

“They have no system in place, notwithstanding that several years ago the Attorney General indicated she would ensure the web shop industry was properly regulated. That has not happened. I challenge the Gaming Board to say otherwise.”

Pointing out that it had been two years since the Gaming Act’s passage, Mr McCartney said the failure to implement proper monitoring and regulatory systems had left the Bahamas and its web shop industry “wide open” to abuse by money laundering and terror financing.

However, his view has been challenged by the Central Bank’s governor, John Rolle, who recently praised the web shops’ own technology and Know Your Customer (KYC) monitoring systems - adding that the industry knew who its clients were, and could even trace customer winnings.

Mr McCartney, though, continued: “What the Government said they wanted to achieve has not happened. They came up with an Act, but it has not happened because the Government has not regulated the industry or the web shops.”

He described the taxes and fees obtained by the Government from the web shops to-date as “a drop in the bucket” compared to what it should be earning, again due to the lack of regulation the DNA leader identified.

“The banks, with the exception of one, continue not to accept their money,” Mr McCartney told Tribune Business of the web shops. “That should tell us something.

“We’re basically in the same position prior to the enactment of the Gaming Act. Anything the Government wanted to achieve has not happened.

“It is very concerning. It’s not the web shop owners’ fault. It’s the Government’s fault. The Government did not do what they were supposed to do in regulating the web shops.”

Obie Wilchcombe, minister of tourism, who has ministerial responsibility for gaming, told Tribune Business recently that the Government wanted the web shops to do more when it came to combating potential financial abuses.

“There’s one area where we’re asking them to do more, which is further training of the MLRO (money laundering reporting officer),” he said.

“That’s important to us. That’s important to the integrity of the whole industry.”