By NEIL HARTNELL
Tribune Business Editor
The Grand Bahama Port Authority (GBPA) “will take steps to cause Chances Games to respect” its regulatory authority if the web shop fails to “regularise” its license terms and fees, Tribune Business was told yesterday.
Fred Smith QC, the GBPA’s attorney, told this newspaper that Chances - and other web shops - needed to recognise his client as “the one-stop shop licensing authority” for Freeport after its injunction bid was rejected by the Supreme Court.
Mr Smith emphasised that the GBPA had no desire “to put Chances or its employees out of business”, adding that it only wanted the web shop operator to co-operate with Freeport’s quasi-governmental authority.
However, he warned that the GBPA is not only preparing to act against Chances, but all Freeport-based businesses that are operating either without a license or outside the terms of their licenses.
The Callenders & Co partner said this was essential to maintaining an orderly business climate in the city, where all companies competed on a regulatory and taxation ‘level playing field’.
“Given that the court has ruled that there is no basis for maintaining their action, the Port Authority will be taking steps to cause Chances to respect its licensing jurisdiction in Freeport,” Mr Smith confirmed to Tribune Business.
“I wish to emphasise that the Port Authority is not in the business of preventing economic growth, and we of course wish to encourage any and all companies to do business in Freeport and help grow our economy, but it must be within the context that we [the GBPA] are the one-stop shop licensing authority. That is the whole construct of Freeport.”
Mr Smith reiterated the GBPA’s position that clause 2 (23) (a) of the Hawksbill Creek Agreement gives it the “exclusive licensing authority for gaming and amusements” in Freeport, a definition that it believes includes web shop gaming.
He called upon Chances Games and its parent, Jarol Investments, to bring the license terms and associated fees for its three Freeport locations into line with the GBPA’s demands.
“Now that the court has refused the motion for the injunction, the Port Authority once again invites Chances to regularise its licensing status in the Port area, and to regularise the terms of the license and the license payments to the Port Authority,” Mr Smith told Tribune Business.
“The Port Authority repeatedly emphasises that it doesn’t want to put Chances or its employees out of business. We want Chances to succeed; every business in Freeport is a success story for the island and its residents.
“But the essence of this is that one must give unto Caesar that which is Caesar’s. The only way for the Port Authority to encourage compliance from licensees and businesses that are operating outside the terms of their license, or without a license, is to take action.”
Mr Smith’s warning of imminent regulatory action, should Chances Games fail to bow to the GBPA’s wishes, will be seized upon by the web shop operator’s management as further justifying their appeal against the Supreme Court’s ruling.
Raymond Culmer, the web shop’s principal, alleged in an April 7, 2017, affidavit that 150 Bahamians will be made jobless if the GBPA makes good on its threat to cancel its Freeport license and close the business down.
He added that Chances’ Freeport locations would “suffer irreparable prejudice and damage” as a result, with staff terminations merely “contributing to the unemployment statistics of Freeport”.
Chances had originally sought an injunction to prevent the GBPA “from interfering with and/or cancelling” its business license, and increasing its license fee, until the Supreme Court determined the main issue between the parties - who has regulatory authority for web shop gaming in Freeport.
Freeport-based web shops, according to the GBPA, are currently licensed as Internet cafes, not for gaming activities, meaning they are effectively breaching their license terms.
The GBPA is also seeking to impose higher license fees on Freeport-based web shop, bringing these in line with what it charges casinos, namely $300,000 or 1 per cent of winnings - whichever is greater. Chances fears this amounts to a 500 per cent increase in GBPA license fees.
However, Justice Petra Hanna-Weekes refused to grant the injunction on the basis that Chances/Jarol had raised “no serious issue to be tried”, since the GBPA had already rescinded the letter upon which the web shop chain’s case was based.
Mr Smith yesterday said the GBPA was not picking solely on Chances, adding that it planned to take action against all Freeport-based companies without a license, operating in breach of their license, or failing to pay associated fees.
“Additional steps are being taken against all other licensees operating outside the terms of their licenses,” he confirmed, “as well as action against those operating without a license.
“I wish to emphasise that many of the steps being taken by the Port Authority are with a view to encouraging business, not discouraging business. We merely want them to work within the jurisdiction of the Hawksbill Creek Agreement. This is a very simple formula, and we hope businesses will act accordingly.”
Mr Smith and the GBPA successfully defeated the initial injunction bid by pointing out they had subsequently withdrawn the January 25, 2016, letter that formed the entire basis of Chances’ case.
Their August 31, 2016, letter clarified that the initial missive had incorrectly stated that the GBPA was acting under the Gaming Act. Instead, it was using the Hawksbill Creek Agreement as its lawful authority.
Justice Hanna-Weekes said the second letter meant that the January 25, 2016, document “upon which [Chances] pegs its pleaded case has been completely overtaken by events”.
She added that the issue had now become whether Chances was breaching its license agreement with the GBPA, and if it needed to amend its license and pay a higher fee, as a result of its web shop gaming activities.