The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government has placed a ban on opening new web shop locations, a Cabinet Minister yesterday suggesting gaming advances could ultimately make physical sites "obsolete".

Dionisio D'Aguilar, who has ministerial responsibility for gaming, acknowledged concerns over the Government's ability to enforce zoning regulations designed to prevent web shops from operating near schools, churches and in residential areas.

"It's obviously very difficult to put that genie back in the bottle," the Minister said, speaking ahead of the weekly Cabinet meeting.

"You have someone who has invested millions of dollars building a location where it shouldn't really be, so now what do we do? Tell them to knock it down and start again?

"There is a complete moratorium on new locations, so there will be no new locations for the time being until we assess. I don't envision any time soon that we will loosen that regulation."

The rapid expansion and proliferation of web shops throughout the Bahamas has caused increasing concern among many observers, especially on the Family Islands, where they have been accused of "sucking the life" out of local communities and economies.

The former Christie administration elected to impose a 10-year ban on new entrants to the web shop gaming industry following the process to legalise, regulate and tax the sector, rather than place a moratorium on the number of locations.

Mr D'Aguilar was one of the move's leading critics, arguing that the moratorium preventing the entrance was anti-competitive and effectively created a 'cartel' or oligopoly in the web shop sector. However, his predecessor as gaming minister, Obie Wilchcombe, argued prior to May 10 that the number of web shop locations had fallen from 635 pre-regularisation to 372 sites at June 2016, with 31 applications pending.

"This will result in a total of approximately 403 licensed locations in the country, which equates to a 36.5 per cent reduction in the number of locations that were active at the commencement of the regularisation process," Mr Wilchcombe said.

But given that the Bahamas has an estimated 377,374 population based on 2013 data, the 403 web shops still amount to a ratio of one location for every 936 Bahamians and residents.

Some in the web shop industry itself have also suggested that a moratorium should have been placed on locations, as opposed to operators. Craig Flowers, influential proprietor of the FML Group of Companies, advocated this strategy prior to Mr D'Aguilar's announcement yesterday.

Mr D'Aguilar, meanwhile, suggested that the web shop gaming industry was in a state of rapid, continual evolution that may eventually take it to a state where the business goes completely online and no physical locations are needed.

He explained: " The gaming industry is becoming more technologically advanced. There will probably be a time when a gaming house location will be obsolete. People will log on, go online and game.

"They will transfer the money electronically and be paid electronically. Gaming houses in the next 10 years as we know it will probably be very different, and there will be far less locations. I think that's probably where they are trending towards."

Nine companies applied for gaming house licences when the Government began the process to legalise, regulate and tax the sector. Eight applicants were subsequently provided with provisional licenses, with Bet Vegas the only operator to have been denied. Bet Vegas mounted a legal challenge to that decision via Judicial Review.

FML, Island Luck, Nassau Games, Percy's Island Games, A Sure Win, Chances, Paradise Games, Bahama Dreams and Asue Draw were all awarded licenses. However, Asue Draw + Spin later announced it would not renew its gaming house operator license for 2016-2017, and exited from the industry.

Mr D'Aguilar reiterated yesterday that he does not support the web shop operator moratorium until 2027, but added that any decision on the issue would ultimately be made by Cabinet.

"We're gathering information. I fundamentally don't agree with a moratorium, but that will be a Cabinet decision. I just don't believe in those types of restrictions," he said.

"It's a learning curve. I'm beginning to learn more about the industry and, once I feel that I am comfortable about what is happening in that industry, the Government will make decisions on the way forward, bearing in mind that the previous administration took a first crack at setting up, regularising and legalising the gaming houses.

"Now that we have a few years worth of information we can sit back and assess, and say is this regime sufficient or do we need to strengthen the regime with additional regulations? I think we are at that point now and we're reviewing it."