The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Gaming Board’s chairman yesterday pledged that the regulator will be “fair and clear” in addressing a web shop operator’s concerns that its funds are being improperly used.

Dr Daniel Johnson told Tribune Business the gaming industry’s supervisory body will respond “in short order” to Chances’ grievances that its monies are not being used in accordance with the Gaming Act and accompanying regulations to solely finance employee background checks and vetting.

“That’s something that we’ll have to verify,” he said of the gaming house’s contention. “We’ll have to check into that and it will be verified. Our role as regulator is to be fair and clear. We’ll put that together and report to them in short order. It will all be fair, and we’ll make it very clear.”

Dr Johnson’s comments came as Chances and its parent, Jarol Investments, yesterday formally requested “an audience” with the Gaming Board to address concerns that the regulator has been taking monies from the web shop operator’s investigative deposit account and using them for purposes not intended under the law or regulations.

They are arguing that the Gaming Act’s section 29 stipulates that funds deposited into this account can only be used to used to finance the regulator’s conducting of background checks into the integrity of all operators, locations and industry employees to ensure they are fit-and-proper to be operating in the sector.

Chances, which says it should have around $2.5m in its investigative deposit account, is alleging that the Gaming Board has instead taken close to $1m from this facility to help cover the costs associated with executing an industry-wide central electronic monitoring system developed by Indian company, Infrasoft Technologies.

Carlson Shurland KC, in an October 23, 2023, letter sent to the Gaming Board on Chances’ behalf, said the operator “formally objects to the decision taken by the Gaming Board regarding allocating funds from the investigative deposit account to finance the development and implementation of a central electronic monitoring system”.

Urging that the Gaming Board “re-evaluate” this decision, Mr Shurland added that the regulator seemed “oblivious” to Chances’ request that it account for what monies taken from the investigative deposit account are being used for “and surprisingly powerless to rectify the situation”.

“Therefore, our client respectfully requests an audience with the Board to address and rectify this matter,” Mr Shurland wrote. “This meeting aims to discuss the Board’s decision to use investigative deposit account funds for purposes unrelated to the... statutory purpose and to seek clarification on the legal justification for such actions.”

Demanding a response from the Gaming Board within seven days, Mr Shurland voiced optimism that Chances’ concerns can be resolved “through constructive dialogue and co-operation” with “an equitable resolution” reached.

Ian Tynes, the Gaming Board’s secretary, had earlier written to Chances on May 8, 2023, advising that the regulator was “preparing a thorough update regarding the implementation” of the central electronic monitoring system and associated expenses within 14 days of his letter. That update, though, has still not been released.

Chances, in its previously-dismissed Judicial Review, alleged that, of the $947,919 allegedly withdrawn by the Gaming Board from its investigative deposit account to finance the monitoring system, some $780,452 was paid to Infrasoft Technologies. A further $145,785 was spent on “agent fees”, and $21,692 went to a Bahamian technology provider, MicroNet.

The web shop operator, in its action, alleged that the central electronic monitoring system was on “indefinite hold” and has yet to implemented or executed. It is thus claiming that, not only are its funds not being used in compliance with the law, but they are also financing something that both the gaming industry and regulator have received no benefit from.

And Chances itself is now faced with injecting more money into its investigative deposit account to replace the near-$1m taken by the Gaming Board, hence its previous warning about downsizing and reduced charitable donations as a result of reduced profit margins.

However, Dr Johnson yesterday told Tribune Business the Gaming Board is aiming to implement the central electronic monitoring system “by year-end” as it is now undergoing testing. “I think all the testing is complete,” he added. “And we look forward to implementing the protocol by year-end. It’s in place, they’re testing everything and it’s awaiting implementation.”

Tribune Business understands that the central electronic monitoring system’s introduction will bring The Bahamas in line with international best practices and standards by enabling the Gaming Board to monitor transactions in real-time, and thus verify that games function exactly as they are supposed - and promoted - to, thus enhancing patron protection.

However, Raymond Culmer, Chances principal, has voiced septicism about the concept. “It’s obsolete,” he told Tribune Business. “The Gaming Board has access to our back office, and can generate any report from our back office. If they want to see a list of customers who deposited $200 in the last week, they can get that report from our back office.

“They’re harping on this that through this central electronic monitoring system they will be able to see transactions in real time. That’s impossible. Let’s say we only have ten customers online. Their spins on the wheels will be every ten seconds. If they put it on automatic spin it will be even faster. Someone seeing these transactions in real time, it doesn’t happen. It has to go from our system to the database.”

Infrasoft was initially awarded a contract to perform the necessary work almost one decade ago under the last Christie administration, shortly after the web shop industry was legalised.

Multiple sources, speaking to Tribune Business on condition of anonymity, confirmed that the arrangement suffered early troubles as a result of the Gaming Board failing to pay Infrasoft for work performed. Legal action for alleged breach of contract was said to have loomed at one point, but the matter was ultimately settled under the Minnis administration and payment made without recourse to the courts.

This was after the Minnis administration received legal advice that it was “locked into” the contract with Infrasoft, which involved two development stages. The first was a framework for the implementation of anti-money laundering and Know Your Customer (KYC) processes for both gaming houses and patrons, which has already been implemented.

Now the second part, which awaits execution, is the central electronic monitoring system. “The Gaming Board has real time access, so if a customer has a complaint they can ask the customer what happened and play back the data, and say that’s what happened and did not happen,” one contact, speaking on condition of anonymity, said.

“There was, though, some resistance in the industry about giving access and some people were raising data protection issues.” Another source, also speaking confidentially, said: “I think the system is necessary. I just don’t know why the industry doesn’t go ahead and get it done.”