The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government can use the fact that 75 per cent of the electorate failed to vote in Monday’s referendum as “a mandate” to legalise web shop gaming, a leading businessman said yesterday, although it is apparently willing to risk potential “turmoil” from shutting the sector down.

Arguing that the referendum’s outcome “solved nothing”, due to the low level of voter participation, Dionisio D’Aguilar told Tribune Business that the Christie administration would, in the long run, either regulate web shop gaming or “leave it is at is”.

With the economy still struggling, the Superwash president said shutting down the web shop industry and adding potentially 3,000 Bahamians to the employment line was the last thing the Government wanted to do - even though the Prime Minister last night demanded that web shop owners close down all their outlets, and cease operations (including Internet-based gaming) immediately.

“I personally think that the Government will make the case that 75 per cent of the population don’t care, and use that as a mandate to do what it is they want to do, which is to legalise this whole industry,” the former Bahamas Chamber of Commerce president told Tribune Business.

“If I was the Government, I would do what it is I was going to do, and do it quickly. I don’t think they have the desire to create the turmoil that would result from shutting the industry down, and throw all these individuals on to the street. They’re either going to regularise it or leave it as it is.”

Doing the latter, though, would go against what the Government previously pledged to do in the event of a ‘No’ vote, namely to enforce the existing laws and shut down web shop gaming in the Bahamas. The Christie administration’s announcement last night indicated it planned to make good on that pledge.

Mr D’Aguilar, though, said he would be surprised if hundreds of Royal Bahamas Police Force (RBPF) officers were used to “swoop” on 200-plus web shop outlets and shut them down.

To achieve a one-time closure of the sector, Mr D’Aguilar estimated that around 2,500 police officers would be required. He calculated this based on five-10 officers being required to close each outlet, arrest any patrons and employees, and seize computers and other evidence.

The economic consequences of the Government’s action last night, though, will potentially be severe. Web shop operators collectively say they employ 3,000 persons and, based on a 200,000 strong workforce, making all of them redundant could raise the national unemployment rate by between 1-2 percentage points.

That would likely total unemployment back to around 15.7-16.7 per cent. Apart from the damaging effects on web shop employees and their families, an industry shut down would also place a further major burden on the Government’s social security budget, and services such as education and health, forcing a spending increase at a time when the Christie administration can least afford it.

The ‘No’ vote may also have thrown off 2013-2014 Budget planning. Developing new revenue streams is a key component of its fiscal strategy, and it is likely to have been counting on raising between $20-$40 million from a legalised ‘numbers’ industry to help plug a fiscal deficit estimated at between $550-$700 million for this fiscal year.

A web shop industry ‘shut down’ would also have a sharply negative ‘multiplier’ effect, reducing the amount of money in circulation in the Bahamian economy.

Apart from web shop employees losing their incomes, their landlords will likely also lose precious rental income. Suppliers and service providers to the sector would also lose business, as would the Government - in the form of Business Licence fees, National Insurance Board (NIB) contributions, Bahamas Electricity Corporation (BEC) bills and the like.

Mr Christie’s message last night also contained a plea for web shop operators to maintain staff levels, and not sever ties with landlords, suppliers and utility providers.

Such an expectation is unrealistic, given that the web shop operators will have no obligations coming in to service payments due to creditors. That statement, though, might also indicate the shut down is temporary - given the Government time to work out how to legalise the industry, although there was no indication of that last night.

Still, the referendum vote only asked Bahamians whether they wanted to ‘tax and regulate’ the web shop gaming industry. This still leaves the door open for the Government to legalise it via an Act of Parliament, a route Mr D’Aguilar suggested it could take.

“The Government does not have the willpower, or the motivation, or the financial resources to deal with this issue,” he told Tribune Business.

“The time is upon us for the Government to make a decision as to what they to do.

“I’m not tied to a web shop, but Bahamians like games of chance. No matter how much regulation you put in place, they will keep doing it. Regulate it, tax it, like they do in the US, like they do in the UK, like they do in Canada. In almost every other country in the world, lotteries and games of chance are deemed acceptable.”

Mr D’Aguilar described the referendum as “a total waste” of government resources, adding that it was “stupid” for the Christie administration to put it to a vote as opposed to taking the lead and legislating itself.

Estimating that 15 per cent of the Bahamian electorate voted ‘No’ to regulating web shop gaming, and 10 per cent ‘Yes’, the businessman said the fact 75 per cent did not vote rendered the outcome meaningless.

And Mr D’Aguilar also blasted Bahamian politicians for constantly interfering and “screwing up” referendum processes.

Recalling the failed 2002 process, he bemoaned the failure of the major political parties to reach a consensus on the major issues, and accused them of “using the Bahamian people as pawns” to achieve their political objectives.

He was backed by Rick Lowe, an executive with the Nassau Institute think-tank, who said web shop gaming would “not go away” or be closed down by the Government.

“Gambling is not going to stop,” he added. “They need to move forward in a sensible and logical way. People will find ways to gamble if they want.”

Mr Lowe argued that applicants for web shop licences should be granted one if they met the criteria and were ‘fit and proper’ persons.

“I don’t see anything wrong with them providing a service and making money off it,” Mr Lowe said. “Where else is it [web shop gaming] banned? It’s people’s money. They deserve to do what they want to do with their money, as long as it’s not harmful to me or you.”