The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A web shop operator is appealing the Supreme Court’s refusal to prevent the Grand Bahama Port Authority (GBPA) from potentially cancelling its license to operate in Freeport.

Carlson Shurland, attorney for Jarol Investment, which operates as Chances Games, confirmed to Tribune Business that “the appeal is filed” after Justice Petra Hanna-Weekes declined to grant the company’s application for an injunction against the GBPA.

Chances had sought an injunction to prevent the GBPA “from interfering with and/or cancelling” its business license, and increasing its license fee, until the Supreme Court determined the main issue between the parties - who has regulatory authority for web shop gaming in Freeport.

Mr Shurland and Chances moved for an injunction after Fred Smith QC, the GBPA’s attorney, warned in December 2016 that the quasi-governmental authority planned to act against Freeport-based web shops “operating in breach” of their business licenses.

He told Tribune Business this action could involve the GBPA cancelling the licenses of all Freeport-based web shops, unless they agreed to amend them and pay significantly higher fees.

Mr Smith argued that his client had little choice but to “bring some order” to a chaotic situation where Freeport-based web shops are not currently licensed by the GBPA to conduct gaming activities.

Chances is now exposed should the GBPA choose to act on Mr Smith’s warning, after Justice Hanna-Weekes, in a March 27, 2017, ruling, declined to grant the injunction sought.

She ruled that there was “no serious issue to be tried”, as the entire basis for Chances’ injunction application was a letter whose contents had been completely “rescinded” by the GBPA and Mr Smith.

The web shop operator’s action was centred on a January 25, 2016, letter from the GBPA which called on Chances to apply for a provisional gaming license from it.

The GBPA cited the Gaming Act 2014, and associated regulations, as giving it the authority to make such demands. Chances, though, argued that such a demand was illegal because it was the Gaming Board, not the GBPA, which had regulatory authority for the web shop industry in Freeport.

Raymond Culmer, Chances’ principal, alleged in an affidavit that the web shop chain believed it “had an excellent prospect of success” with its action on the basis that the GBPA had never been granted regulatory authority for gaming.

Justice Hanna-Weekes’ judgment disclosed how Mr Culmer described Chances’ as “contributing significantly to the economy of Freeport and the quality of life of Bahamian citizens, especially its employees”.

Mr Culmer also alleged that Chances’ GBPA licenses were “for interactive gaming, which incorporates the use of computer software that allows customers to access games of chance”.

He also claimed, according to the judgment, that the GBPA was “aware of the services being provided to its customers, and at no time during the currency of the license did they invoke, complain, challenge or threaten [Chances] to ‘cease and desist’ or suffer sanctions for non-compliance”.

Mr Smith and the GBPA, though, pointed out that they had subsequently withdrawn the January 25, 2016, letter that formed the entire basis of Chances’ case.

Their August 31, 2016, letter clarified that the initial missive had incorrectly stated that the GBPA was acting under the Gaming Act. Instead, it was using the Hawksbill Creek Agreement as its lawful authority.

The GBPA’s second letter said it was seeking to place its relationship with Chances “on a proper footing”, given that the company was licensed as an Internet cafe, rather than a web shop gaming provider. Accordingly, it wanted Chances to amend its license and pay a higher fee because of its gaming activities.

Justice Hanna-Weekes said the second letter meant that the January 25, 2016, document “upon which [Chances] pegs its pleaded case has been completely overtaken by events”.

She added that the issue had now become whether Chances was breaching its license agreement with the GBPA, and if it needed to amend its license and pay a higher fee, as a result of its web shop gaming activities.

The dispute over whether the GBPA has any regulatory authority under the Gaming Act having fallen away, Justice Hanna-Weekes found: “By reason of the GBPA’s August 31, 2016, letter, any [issue] that may have existed between the plaintiff and GBPA as a result of the GBPA’s letter of January 25, 2016, was effectively extinguished.

“A party to an action is bound by his pleadings. The plaintiff’s action is grounded in the demands made by the [GBPA] in the letter to it dated January 25, 2016. There is no dispute between the parties that the letter was rescinded. The court must consider whether the matter ends there.”

Finding that it did, Justice Hanna-Weekes said that with the January 25, 2016, letter “having now fallen away”, there was no serious issue to be tried, and dismissed the injunction application.