The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE twin five percent Stamp Tax levies on web shop patrons are a "significant concern" for operators, the Gaming House Operators Association's chief executive said yesterday.

Gershan Major told Tribune Business that while it was difficult to determine the financial impact of the taxes until they are enacted next month, the industry feels they will deter Bahamians from gaming with the same frequency and spend.

"It is a significant concern. We don't know what the true effect will be until it is enacted, but it is a certainly a concern. We will have to wait until we see a trend analysis to make a definitive determination," Mr Major said of the two stamp tax impositions.

Patrons will pay the five percent levies on deposits and over-the-counter (ORTC) lottery sales. Christiansen Capital Advisors, in a study commissioned by the Association, predicted that they will suck between $13.3m and $19.9m annually from the pockets of Bahamian gaming patrons and alter consumer behaviour.

Mr Major added that the government is still coming to terms with the complexity of the web shop industry, as indicated by its decision to spend imposition of the Stamp Tax until mid-August.

Dionisio D'Aguilar, minister with responsibility for gaming, told Tribune Business that the delay in imposing the tax on customer deposits and over-the-counter (OTC) lottery sales stemmed from the need to "re-certify" web shop systems and games.

He explained that the recertification was a direct consequence of imposing the twin five percent levies, as this means all web shop computer platforms, games and payout ratios now have to be adjusted to incorporate the new tax.

These changes must be "certified" by an independent third-party examiner, who attests that the games offered by web shops will operate as advertised, and have not been "manipulated" to the industry's advantage.

Mr D'Aguilar said the recertification process typically took four to six weeks to complete, forcing the government to push implementation of the twin five percent levies back from July 1 to mid-to-end August.

"We've advised the Government of the requirement through the Gaming Board that technology used in the industry requires certification and modification. The independent-approved laboratories do that. They have to come in and look at the systems, agree to the modifications in order to affect the changes and certify them," said Mr Major.

And Mr D'Aguilar said: "What was found was that it wasn't a sufficient period for gaming house operators to adjust their programmes to account for this new levy.

"What happens is that all of the systems that are operated by the gaming houses are certified by a company that the programmes are working as they should," he said, naming the company involved as GLI (Gaming Laboratories International).

"When you write a programme or have a game you offer online, the payout ratios and the way it operates is certified by a company that says the game operates under these specs. They go in, look at the programmes, and certify it's operating as it should and none of the gaming house operators have gone in and manipulated it otherwise.

"If the payout ratio is 95 percent, this company goes in and certifies the payout is 95 percent of gaming patron spend. This relates mostly to the casino games. All your games, your platforms have to be modified to account for the fact that, out of the money paid by the customer, 5 percent has to go to the Government and 95 percent on the account."