By KHRISNA RUSSELL
Deputy Chief Reporter
TOURISM Minister Dionisio D’Aguilar has described recent amendments to the Gaming Act as a “happy medium” while calling on one gaming operator to modernise to avoid being negatively impacted by the changes.
He was referring to Craig Flowers, FML Group of Companies owner, who last week told The Tribune he saw the Minnis administration’s tax on lottery play to be “problematic”.
Mr Flowers explained that 85 percent of his business came from the lottery, adding he expected many customers to shift to online casino games where no taxes will be imposed. He called on the government to impose taxes on both lottery and casino games.
Otherwise, he predicted his business could take a huge blow as customers are likely to shift to casino-based games where there is more of an “incentive” to play.
Asked about this, Mr D’Aguilar said only a portion of gaming revenues will be affected.
“When we evaluated the gaming industry, I think I would have said in Parliament that only 45 percent of the gaming revenues would have been affected by this tax,” he said yesterday outside of Cabinet.
“Mr Flowers’ business is the one business that probably represents five or six percent of the industry that is skewed predominantly to what we know as the number business and so his business probably would be affected more so than others.
“But we had to look at a tax that we felt in general would garner the additional revenue that the government is looking for from gaming and have the least impact and we feel like this was a happy medium.”
Mr D’Aguilar added: “You know every other business evolved to where 55 percent of their business was from the casino games and 45 percent of their business was from the numbers business.
“He was the only one that did not make that transition. Maybe this is an opportune time for him to make that transition.”
The new winnings tax will see five percent paid on winnings up to $1,000 and 7.5 percent on anything greater than $1,000. Having been recently passed in the Senate, the changes now have to be signed off on by Governor General A Cornelius Smith before they come on stream, The Tribune was told yesterday.
This “small tax on winnings”, Mr D’Aguilar said, was projected to yield between $10m-$15m annually for the Public Treasury. He projected the tax would take the government closer to the $50m total web shop revenue target it had envisioned under the initial tax structure for the industry.
As for a crack down on non-compliant web shop operations, he said the Gaming Board still needs time to set up its enforcement unit.
“So I was thinking about this this morning and the law has just passed. In the Bill it said that the Gaming Board will develop an enforcement unit and once that has been developed we should proceed with haste to enforce the gaming laws and to ensure that people who are operating without a license are shut down.
“So we have just passed it. Let us digest it, get the infrastructure in place and then I am sure that we will move in due course.”
There is no official government position on the creation of a national lottery; however, the minister said there are some who have argued that established gaming operators should be the ones to run the lottery.
“What I said in my presentation is it (the legislation) left open the opportunity for a lottery,” Mr D’Aguilar said.
“Now I never said who would run that lottery. I said specifically in my speech that I did not personally believe that the government of The Bahamas should run a lottery because of our record of running things in general so we have not proceeded on that matter.
He continued: “We have received no advice on that matter and the government is not further along in determining what its going to do about a lottery, but if we were to decide to go into a lottery I am sure a very significant case could be made for ‘hey we have Bahamians involved in the gaming industry would they not be best positioned to run the lottery on our behalf?’
“They have the best distribution. They have the knowledge. I am sure a very profound case could be made for that, but one might argue that we have lotteries now.
“I mean you go on the and you see people drawing numbers every half hour. I’m told. So the only thing I think we haven’t done is to a five ball and six ball we’re already at a two three and four or three and four.”
Mr D’Aguilar said ultimately the rationale for wanting a national lottery should be explored.
“The government legalised gaming to generate tax revenue. So you could still have the same people regulate it. It’s just maybe you can change the tax structure.
“I mean there are many ways to skin this cat but we have as I said received no further advice from the Gaming Board on how best to proceed. So this is mainly conjecture at this point.”