The Tribune

EDITOR'S NOTE: This article was written before last night's announcement by the Prime Minister that the gambling referendum would be postponed until January 28 with the question of a national lottery restored to the ballot.

By LARRY SMITH

WELL, if social media, the press and personal conversations are any guide, there has been a noticeable turn away from the previously favourable or indifferent view towards the upcoming gambling referendum on the part of most non-evangelical Bahamians.

And playing the central role in this shift has been the confusing and contradictory statements from the prime minister who, if ZNS is anything to go by, spends all his time flitting around the country making portentous and convoluted statements on every issue under the sun, as he basks in his political glory.

But supporters of the measure still believe that a well-funded campaign will carry the day. And the promotional machine funded by the web shop operators is only just beginning to kick in. T-shirts and other paraphernalia urging a “yes” vote are being given away in all sorts of places, from PLP block parties to government offices, and a Facebook contest has been launched offering cash prizes for videos, songs, poems and dances promoting the legalisation of web shops.

The Vote Yes campaign's Facebook page has more than 2800 fans and says it represents "the thousands of Bahamians who believe the Bahamian gaming industry is worth fighting for." It argues that too much is at stake for indifference to prevail on this issue.

Unfortunately, the PLP's inept packaging of the gambling vote has turned off many who would otherwise have supported the measure as a matter of course, and the issue will likely be determined along crude political lines. This of course leaves aside those whose religious convictions won't allow them to support gambling under any circumstances.

It is certain there would be many more supporters if the matter had been handled in a more effective and transparent way – and if the proposal had included a national lottery, as the prime minister and the PLP had originally promised. Both the FNM and the PLP had this initiative on their agenda, and any party in office needs political cover to implement a policy that risks affronting church leaders and the voters they influence.

So a responsible bi-partisan approach on this issue above all others would have made perfect sense, and we could look forward to a new, pain-free revenue stream that would help to reduce the extra tax burden that by all accounts is just around the corner. But that, unfortunately, is not in the cards.

Perhaps the biggest problem is the legitimacy of the vote itself. In the prime minister's recent communication to parliament, he set the date for a "national referendum" that would determine only whether the web shops would be regularised. And he said the parliamentary commissioner's office would be handling this referendum.

However, the commissioner is responsible by law only for elections and constitutional referendums, which require a proclamation by the governor-general and an act of parliament stipulating the question to be asked and allocating funds for the vote. So Christie is now calling the December 3 exercise an "opinion poll", and presumably it will be funded by the web shops themselves – a special interest – since no public funds have been allocated.

Incredibly, the prime minister maintains that this informal polling will either initiate a new multi-million-dollar oligopoly for the benefit of selected web shop owners, or set in motion a massive police and judicial crackdown that will destabilise the industry and upset tens of thousands of Bahamian gamblers. Neither outcome seems at all rational or desirable.

When the previous government examined this issue, the web shop owners provided "comprehensive data" on their operations. The size of the business was put at $200 million annually, so a 20 per cent tax would have meant $40 million in revenue for the government (on top of license fees). However, the Christie administration is projecting tax revenues of less than $20 million, with no explanation for the discrepancy.

And other sources say the industry is much larger – on the order of $400 to $700 million a year. That does not include the $100 million annually that Bahamians are said to spend on the Florida lottery. At least six local companies operate scores of retail web shops on New Providence and Grand Bahama, and Paul Major, a spokesman for the Vote Yes campaign, has confirmed at least 150,000 individual gambling accounts at these web shops.

Accounts can be set up online in your own home, or by visiting any web shop. Deposits can be made electronically or in cash. Bets can be placed via the internet or in person, and winnings automatically appear in your online account, from where they can be withdrawn via proprietary automated teller machines, or applied to further betting.

In addition to this sophisticated infrastructure, there are many more vendors located at restaurants, bars and other establishments selling traditional numbers tickets to lower-income betters. Gambling is ubiquitous in the Bahamas, and the true scale of the industry may be discerned from the fact that, according to insiders, a single mid-level firm takes in $450,000 a day – or roughly $180 million a year.

As a result, the Numbers chiefs have more money than they know what to do with, and some say they have become the biggest lenders in town. In fact, the FML group gives active account holders a $100 bonus at the end of each year. And now, after decades of operating in a grey market subject to the whim of politicians and the shifting attention of police, they seek legitimacy – and the opportunity to further leverage their huge profits.

The Vote Yes campaign says that web shops support some 5,000 Bahamian jobs while contributing over $1 million a year to charity, arguing that a “no” vote would "threaten the financial health of our entire nation." Their quid pro quo for legitimacy is the transfer to the state of millions of dollars per year in the form of taxes and license fees.

Under the previous government, a draft law was prepared to legalise both internet gambling and gaming rooms, but following difficult talks with religious leaders, former Prime Minister Hubert Ingraham declined to proceed until after the May 2012 general election, to the dismay of the Numbers bosses. Ingraham said he would hold a referendum on the whole question of gambling – including Bahamian access to casinos – in his next term.

The issue of Bahamians not being allowed to gamble in casinos is a sore point with many. We are said to be virtually the only country that discriminates against its own citizens in this way – even Turks Islanders can gamble in their casinos. Our constitution prohibits discriminatory laws, except in specific instances. And one of those instances is "the granting of licenses or certificates permitting the conduct of a lottery, the keeping of a gaming house, or the carrying on of gambling in any of its forms."

This provision has enabled successive governments to maintain the absolute legal ban on Bahamian betting that has prevailed since the early 20th century, while still allowing the grant of a handful of exemptions to hotel casinos where only foreigners can gamble.

The Progressive Liberal Party also said it would hold a referendum on gambling after the election, but the proposal would be limited to the regularisation of web shops and/or the creation of a national lottery. A vote on the issue of Bahamians gambling in casinos was ruled out. But, as is well known, since the general election Prime Minister Christie has been flip-flopping on this initiative like a landed snapper.

First he assured Bahamians they would be fully informed well in advance of the referendum. Then he took the question of a national lottery off the table completely. Then he refused point blank to release the consultant recommendations that led him to do so. And we have yet to hear exactly what the referendum question will be – which is the most important part of the whole exercise.

On top of that, the government has failed to publish any background information on the industry or the relative consequences of the choices involved, or the proposed regulatory regime should regularisation be approved. The utter lack of transparency is stunning.

According to Opposition Leader Hubert Minnis, “There has been no analysis whatsoever by the government of the nature, practices, social or economic impact of web shops in the Bahamas. No analysis of international law regarding internet-based casino gambling operations. No reference to due diligence, know your customer or money laundering concerns.”

During a recent televised debate sponsored by the Vote Yes campaign, spokesman Paul Major claimed that an average 60 to 70 per cent of the web shop take goes back out in winnings, but when challenged to substantiate this he responded: “Trust me, trust me.” The prime minister is saying much the same thing, on a matter of great public importance.

What do you think? Send comments to larry@tribunemedia.net

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