The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) has issued an ultimatum to Freeport-based web shops, after the Government allegedly “hijacked” and “ambushed” the trial to determine who is the industry’s primary regulator in that city.

Attorneys acting for Freeport’s quasi-governmental authority warned that it now plans to act against web shops “operating in breach” of their GBPA licenses, after the Government’s intervention delayed the matter’s resolution by the Supreme Court.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that this could amount to the GBPA cancelling the licenses held by all Freeport-based web shops, unless they agreed to amend them and pay significantly higher fees.

He added 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 only web shop chain currently exempt from the license cancellation threat is Jarol Investments, trading as Chances Games, which brought the Supreme Court case that produced the Government’s ‘11th hour’ intervention.

While the GBPA has withdrawn its earlier undertaking not to cancel Jarol’s license, the Supreme Court will now hear the web shop chain’s bid to obtain an injunction against such regulatory action on January 16, 2017.

While Jarol/Chances’ license is at least safe until then, all other web shops operating in Freeport are now potentially exposed to regulatory action that could force their operations to close (see other article on Page 1B).

The chain of events leading to this latest uncertainty for the Freeport web shop gaming industry was triggered after the Attorney General’s Office, acting on the Government’s behalf, intervened in Jarol’s case against the GBPA just three days before it was due to go to trial before the Supreme Court.

The Government defendants - the Gaming Board; its secretary, Verdant Scott; and minister with responsibility for gaming, Obie Wilchcombe - are calling on the Supreme Court to hold a trial on “the preliminary issues” before hearing Jarol’s case.

They identify these “issues” as determining “whether or not” the Gaming Board is the only regulator with the power to issue gaming licenses throughout the Bahamas - including in Freeport.

And they are also calling on the Supreme Court to determine if the GBPA has the authority to issue gaming licenses in the Port area.

Mr Scott, in an affidavit seeking to justify the Government’s demand for a determination of the “preliminary issue”, alleged: “The trial of this matter would be time consuming and costly, and would protract the proceedings.

“The determination of this preliminary issue would facilitate the proceedings, and save costs.”

Mr Smith and the GBPA, not surprisingly, disagree. The former told Tribune Business he argued before the Supreme Court last Thursday that the Government’s “preliminary issues” were the main points raised by Jarol/Chances for determination.

As a result, Mr Smith said that to have a hearing on wether there needed to be a ‘preliminary trial’, and to have such a trial itself, would only increase time and costs - the very thing Mr Scott alleged it would avoid.

However, the Supreme Court has now adjourned the matter until March 10, 2017, at which time it will either deal with the Government’s application for a ‘preliminary trial’, or hear Jarol’s case against the GBPA.

“The Attorney General, acting for the Gaming Board, the Minister of Tourism, Obie Wilchcombe, etc, ambushed us with a motion to have the issue determined by way of preliminary trial,” Mr Smith told Tribune Business, “as to whether the Gaming Board or the Port Authority have licensing jurisdiction in Freeport.

“The Port Authority and Jarol objected to late service, and this effectively voided the trial. That has now been adjourned to March 10, 2017, at which time the court will either hear the Government’s application for a preliminary trial or hear the trial itself.”

The Government’s intervention should come as little surprise, since the GBPA is effectively challenging the Gaming Board as the primary regulator for web shop gaming in Freeport.

In so doing, it is threatening to undermine the integrity of the national regulatory regime for all forms of Bahamas-based gambling that was established with the Gaming Act 2014.

Arguing that a ‘preliminary trial’ was unnecessary, Mr Smith said: “The Port Authority submitted that the case brought by Jarol was going to have that issue determined.

“That really is the central issue in this case, and to have a hearing on whether there ought to be a preliminary trial, and then to have that preliminary trial, is only going to delay these proceedings and involve more costs.

“It was the Port Authority’s position that we go into the trial, but the Government refused to withdraw their application.”

Mr Smith confirmed that the GBPA had now “withdrawn its undertaking not to cancel Jarol’s license pending determination of these matters”. Jarol is now seeking an injunction from the Supreme Court to prevent this on January 16, 2017.

Explaining why the GBPA had done this, Mr Smith told Tribune Business: “This delay only prejudices the Port Authority’s right to manage and control Freeport, and hold a licensee in breach of their license accountable.”

Jarol/Chances, and all other Freeport-based web shops, have been licensed by the GBPA as ‘Internet cafes’ rather than gaming houses, and the latter is seeking to rectify this.

It is seeking to levy fees on the web shops that are comparable to those charged for casino gaming, a maximum of $300,000 or 1 per cent of winnings - whichever is greater. This, Jarol has alleged, amounts to a 500 per cent increase in GBPA fees.

“The Port Authority’s position is that we want to be co-operative in determining this very important issue as to who has jurisdiction in the Port area,” Mr Smith said, “but this trial has been hijacked and delayed for an indefinite period by the Government’s motion.

“The Port Authority cannot allow a situation to continue where Jarol and other web shops conduct activities in breach of their license, and refuse to apply to amend their license and pay the Port Authority appropriate fees.

“The Port Authority regards itself as the exclusive licensor of entities and gaming operations in Freeport, and since it appears this matter is not going be determined for quite some time, the Port Authority will be taking action against businesses operating in breach of their license to try and bring some order to the situation.”