The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A web shop operator is warning that 150 Bahamians will be made jobless if the Grand Bahama Port Authority (GBPA) makes good on its threat to cancel its Freeport license.

Raymond Culmer, principal of Chances Games, alleged in an April 7, 2017, affidavit that its three Freeport locations will “suffer irreparable prejudice and damage” should the GBPA take regulatory action following the web shop’s failed injunction bid.

The affidavit, filed with the Court of Appeal as part of Chances’ attempt to overturn the previous Supreme Court verdict, warned that any closure of its businesses would “contribute to the unemployment statistics of Freeport” - statistics that have recently been inflated by some 1,100 tourism sector redundancies.

Chances and its parent, Jarol Investments, had originally 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.

However, Justice Petra Hanna-Weekes refused to grant the injunction on the basis that Chances/Jarol had raised “no serious issue to be tried”, since the GBPA had already rescinded the letter upon which the web shop chain’s case was based.

Urging the Court of Appeal to protect his business, Mr Culmer, Jarol’s president and chief executive, said Justice Hanna-Weekes had replied “yes” when asked by his attorney, Carlson Shurland, whether her March 27 ruling meant the GBPA could close down Chances’ three Freeport locations.

“Due to the learned judge’s response, I verily believe that if the [GBPA] is not restrained, they will take positive steps to close the business’s down,” Mr Culmer fretted.

“That approximately 150 Bahamian citizens will be unemployed if the [GBPA] are not restrained from closing the appellants’ business establishment.”

Chances operates three Freeport-based web shops at Ruthhaven Plaza, Seahorse Plaza and Culmerville Plaza, and Mr Culmer argued that the Supreme Court had left all vulnerable to license cancellation and closure by “erring” in its injunction ruling.

“I verily believe that the [GBPA’s] threats to cancel and/or interfere with [Chances] business license pose a risk of injustice to persons legitimately employed by the appellant, who will possibly lose their jobs and consequently have an adverse effect on their quality of life,” Mr Culmer alleged.

“Any disruptions in the appellant’s business would adversely affect Bahamian citizens and contribute to the unemployment statistics of Freeport.

“If the respondents [GBPA] are allowed to interfere with the appellant’s license(s), it is more likely than not that the appellant’s business would suffer irreparable prejudice and damage,” Mr Culmer continued.

“If this court does not restrain the respondent, I verily believe that the threats stated in its letter dated January 25, 2016, will likely be in force.”

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 then 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.

The GBPA is also seeking to impose higher license fees on Freeport-based web shop, bringing these in line with what it charges casinos, namely $300,000 or 1 per cent of winnings - whichever is greater.

Jarol/Chances fears this amounts to a 500 per cent increase in GBPA license fees, and wants the Court of Appeal to overturn the injunction ruling so that its Freeport business is protected until the main issue between the two parties is determined.

That is who has who has regulatory authority for web shop gaming in Freeport - the GBPA, or the Government.

“The failure of the court to grant an injunction to prevent the closure of the appellants’ establishment is tantamount to determining that the respondents [GBPA] have jurisdiction and authority to grant provisional gaming licenses when the same has yet to be adjudicated by the court,” Mr Culmer alleged.

“I am informed by [Mr Shurland], and verily believe, that once the court weighs all the relevant factors in this case, the only clear conclusion is that the balance of convenience lies heavily in favour of the court protecting the appellant’s position, and ensuring the status quo remains the same, until the action is finally heard and the issues determined.”

Mr Smith and the GBPA successfully defeated the initial injunction bid by pointing out 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.

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.