The Tribune

IT WAS April Fool’s Day, but Sebas Bastian, Island Luck’s CEO, was not playing an April Fool’s joke, he was gambling big time – and he was dead serious.

Without a gaming licence, he announced the grand opening of his newest web shop, brushing off his critics that he had jumped the starting gun, he boldly admitted that “this was a pure gamble”.

Government is not expected to grant gaming licences under the new Gaming Act before next month– or even later– but Mr Bastian, acknowledged that although there are no guarantees, it was a gamble he was willing to take at that “particular time to keep our rebranding and our vision for our company on course”.

And if he does not receive a licence? Well he even had a confident answer for that one: “This was a pure gamble. If we don’t receive a license this will be one beautiful place that will be for rent.”

We wonder how many business owners in this country could have got away with such a move before all regulatory business requirements were in place? But, of course, in The Bahamas money does seem to have a special voice.

Mr Bastian’s Island Luck is one of nine gaming companies applying to government for a licence. If all of their dreams come to fruition, New Providence will become a honky-tonk gambling town — of course, certain Family Islands have also been targeted.

Naturally, Mr Bastian has applied for the lion’s share of the licences — 21 for New Providence, five for Abaco, seven in Grand Bahama, four in Exuma, four in Andros, five in Eleuthera, and one each for Acklins, San Salvador, Mangrove Cay, the Berry Islands, Bimini, Harbour Island, Inagua, Cat Island, Long Island and Mayaguana.

We hope that with the current unemployment Bahamians’ itch for the dice will not take the food from their families’ tables and leave their infants without milk — as happened every Friday when horse racing and betting at Hobby Horse Hall was in full swing.

Gaming will certainly replace our main industries of tourism and finance. But, of course, Mr Bastian would also like to get into the banking business.

He agrees with Foreign Affairs Minister Fred Mitchell’s “plea to ask the Central Bank to consider promoting more financial institutions owned by Bahamians. It can no longer be ignored”.

Bahamians, he said, “are falling victims to the profit of these banks in a time when we need them the most. But they are too busy laying off Bahamians and finding false reasons why they should or should not do business with us (web shops) when the truth of the matter is it’s not really about the ‘what’ it’s all about the ‘who’.”

This is an untrue statement. The banks, like any business intent on surviving, are reacting to a shrinking economy and rising unemployment — despite the promises made by the PLP that our future would change if they were elected. The promised 10,000 immediate jobs did not materialise, instead unemployment increased.

What probably happened to the commercial banks is that during the boom years they were too liberal with their lending, failing to put aside enough reserves to cover the unpaid loans of a recession. One only has to look at the pages upon pages of newspaper advertisements of properties being advertised by the banks in an attempt to reclaim failed mortgages to understand the state of today’s economy. It is understood that banks have been left with about 150,000 bad loans. It is also estimated that in the Caribbean the banks are holding about half a billion in bad debts. To survive, they have to cut back. They are not firing Bahamians for the joy of firing Bahamians. They are being forced to consolidate to survive and save as many jobs as they can. As Bahamian Leon Williams, CEO of Bahamas Telecommunications, told unionists who were objecting to layoffs at BTC: “This is not about emotions or about politics. This is simply business. No bank, (or) Atlantis, (or) Baha Mar, is going to run it any differently. So let’s not get emotional about this. This is a business that we’ve got to run. And if we fold up, the Bahamian people lose 51 cents out of every dollar that BTC makes.”

The Canadian banks — Royal Bank of Canada (RBC), CIBC FirstCaribbean and Scotiabank – have said that worldwide guidelines have prevented them from accepting funds related to Internet gaming.

It is understood that the Christie government was depending on the banking industry opening its doors to web shop deposits once the gaming industry was legalised. But those doors remained tightly shut, and no matter the shouting by web shop owners, or pressure brought to bear on the Central Bank, international banks are still regarding the web shop industry as producing tainted money. As one Bahamian pointed out, these web shops — sprung from what until recently was known as the illegal numbers racket — are probably having difficulty satisfying the international banks’ KYC rules —know your customer. In other words, do they come to the table with clean hands? Unfortunately, some of these aspiring customers, as far as international banking is concerned, come with unwanted baggage. These owners, now with a new label, are finding it difficult to offload the past.

The Canadian banks have locked them out, and if one of its branches in the Bahamas, for example, opened its doors to them, such a bank would not be permitted to trade internationally.

As one Bahamian businessman put it: “If through our local banks we could not do business beyond our shores, how would we pay for the importation of our fuel, our food, all our supplies and necessities needed for our very existence. We would be totally cut off.”

As the Bahamian currency is pegged to the US dollar, the Bahamas has to deal through the American banking system. Should any of our banks break international rules, they would be banned from international trading.

In that situation, we would be cut off from the world, awash with useless gaming money and nowhere to turn to rid ourselves of it. So no matter how much the gamblers rail against the banks, and bang on their doors — these are doors against which such money has no bargaining power. These banks are too afraid of being cut off from the US banking system.

Bahamians might find that they have now bitten off more than they can digest. Mr Bastian might like the gamble, but will they?