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Web Shops Urge Patron Tax Delay

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Web shops are urging the Government to reconsider the New Year's Day introduction of the long-awaited patron winnings tax due to the "additional burden" it will impose on COVID-hit consumers.

Leander Brice and Garvin Newball, A Sure Win's co-chief executives, told Tribune Business their clients need "more time to bounce back" given the hardship imposed by the pandemic's devastation of employment and incomes.

Saying they were sensitive to "the plight" of patrons, the duo said in a statement: "As an innovative industry, we remain committed to adapting as needed to the ever-changing environment in which we operate.

"However, we are concerned about our patrons as they will be burdened with an additional tax. We want to see our customers win, but most importantly we want them to enjoy all of their winnings. Especially with the impact of COVID-19, an additional tax at this time may dampen the spirits of many who game with us as a source of entertainment and relaxation.

"We understand the constraints of the Government and the need for new revenue opportunities, but we truly understand the plight of our gamers and we urge consideration in the timeline of this new tax roll-out to give our patrons a bit more time to bounce back in this current economic climate."

The A Sure Win duo spoke after Senator Kwasi Thompson, minister of state for finance, gave the domestic (web shop) gaming industry less than two weeks' notice that the tax will be implemented during last Wednesday's address on the Fiscal Strategy Report.

Underscoring the increased taxes and fees Bahamian businesses and consumers will likely have to bear as a result of the fiscal and economic blow-out created by COVID-19, Mr Thompson said the Government will start with a levy that is already on the books.

"To help counter the revenue losses, starting on January 1, 2021, the Government intends to implement the Gaming tax on winnings, passed in the House of Assembly in 2019 as part of the Gaming House Operator Amendment Regulations," he revealed.

One web shop operator, speaking on condition of anonymity, said they were unaware of the New Year's Day goal until this newspaper contacted them the following day. Some including Island Luck chief executive, Sebas Bastian, joined his A Sure Win counterparts in protesting there had been no consultation and that the Government has given insufficient notice of its intentions.

However, the Government's efforts to tax web shop patron winnings date back to 2018, and many will argue as a result that the industry cannot claim ignorance over its potential imposition or say it had insufficient time to prepare.

Its introduction has been delayed several times already, most notably when the Government in 2019 tabled regulations in the House of Assembly that failed to give the start date for the winnings tax.

The date oversight added further delay, as web shop operators were also given additional time to have their games tested and certified by independent laboratories that the terms and conditions had not been altered due to the tax’s introduction.

The new winnings tax is projected to generate between $10m-$15m annually in extra revenue for the Public Treasury. While a relatively small sum in the overall fiscal scheme of things, it will certainly shrink gamblers' winnings at a time when they will be hoping to land every cent possible due to COVID-19 related high unemployment and income cuts.

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. Dionisio D’Aguilar, minister of tourism and aviation, said previously that just 45 percent of web shop gaming activities will attract the new patron “winnings” tax with online casino spins remaining untouched “for now”.

This means that a gambler who wins $1,000 will pay $50 in tax, reducing their take-home winnings to $950. Someone who wins $2,000 will pay $150 in tax, leaving them with $1,850 to take home.

Mr D'Aguilar added that the Government had decided to focus this levy solely on lottery/numbers operations because it was too “complicated” to calculate the winnings from online casino spinning, indicating that Bahamian gamblers had got off relatively lightly.

The minister said the comparable winnings tax rates in Jamaica and Barbados are 15 percent and 20 percent, respectively. In the US, he added that the federal tax rate was 25 percent, with state and local taxes on top of that.

While the web shop industry is arguing that the Government is eroding patrons' winnings at the worst possible time, other observers may argue that such a levy is essential to deterring Bahamians from gambling away scarce incomes or unemployment benefits on games of chance.

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