The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government believes itself and the Grand Bahama Port Authority (GBPA) can “co-exist” on the licensing of Freeport-based web shops, provided the latter does not “usurp” the Gaming Board.

The Attorney General’s Office, in written submissions to support its call for a preliminary trial on who is Freeport’s gaming/web shop regulator, argued that both the Gaming Board and GBPA could issue separate licenses to sector operators.

While arguing that the Gaming Board was the industry’s primary regulator, and that Freeport-based web shops needed to be licensed by it first, the Government conceded that the GBPA could then issue its own licences to these operators.

It acknowledged that this right derived from the Hawksbill Creek Agreement, which gave the GBPA the right to manage and control the Port area. As a result, it could only issue licences to casinos and web shops by virtue of their location in Freeport.

“We submit that when it comes to gaming, the GBPA may offer licences to businesses in the Port area, but it was never the purpose of the Hawksbill Creek Agreement, or otherwise, that the GBPA issue gaming licences,” the Attorney General’s Office argued.

“In fact, as it pertains now and in the past, it has been the requirement of the GBPA to issue only licences to casinos in the Port area because the said casinos are doing business in that area.”

The Attorney General’s Office pointed to the precedent set by the Grand Lucayan resort’s casino, last managed by Treasure Bay, which was primarily licensed and regulated by the Gaming Board for the purpose of casino gambling.

It added that regulating this casino was “not within the purview of the GBPA”, with its history showing that the Gaming Board was the regulatory body for all Freeport-based gaming activities.

“The history of gaming in the Port area speaks to the fact that all casinos in the Bahamas, inclusive of the Port area, have to be licensed by the Gaming Board for gaming purposes,” the Attorney General’s Office argued.

“As pertains to the Treasure Bay casino, there has been from its inception in the Port area, and continues to be, a Heads of Agreement between the Government and itself, and its activities regulated by the Gaming Board of the Bahamas, rightly, as the gaming authority for the Commonwealth.”

The Government’s position, not surprisingly, supports the stance taken by web shop operator, Chances Games, and its parent, Jarol Investments, in whose Supreme Court action it has intervened.

However, it directly contradicts the GBPA’s stance, which is seeking a Supreme Court finding that the Hawksbill Creek Agreement exempts Freeport-based web shops from having to obtain a Gaming Board licence.

The case is now likely to revolve around which Hawksbill Creek Agreement clause the web shop industry falls under.

The GBPA is arguing that they fall under the purview of clause 2 (23) (b), and its ‘entertainment’ and ‘amusement’ definitions. As a result, it is alleging that the Gaming Act 2014 does not apply to Freeport-based web shops.

The Government and Chances, though, are alleging that web shops fall under the Hawksbill Creek Agreement’s clause 2 (23) (b).

Those in this category are undertaking business activities subject to national laws and regulations, which means they may first obtain the relevant permits from the Government - in this case, the Gaming Board.

“It is our submission that the plaintiff [Jarol/Chances] would obtain a licence from both the Gaming Board and the GBPA, first obtaining a licence from the Gaming Board pursuant to the said sub-clause 2 (23)(b),” the Attorney General’s Office said.

“It is our submission that a licensing authority, like the Gaming Board, historically licensed and/or collected fees from businesses in the Port area. Then licensees in the Port area would first seek to obtain such license and pay fees to that authority.”

The Government was forced to intervene in the court battle between Jarol/Chances and the GBPA due to the potential threat it poses to the objectives and integrity of the national regulatory regime created by the Gaming Act 2014.

Should the GBPA’s argument succeed, and the Supreme Court find that Freeport-based web shops do not require a gaming licence, then the city will effectively have “carved out a special place” that is exempt from the national regime.

The Attorney General’s Office, though, is arguing that gaming “regulatory functions are not within the purview of the GBPA”, either under the Gaming Act or its 1969 predecessor, the Lotteries and Gaming Act.

“In fact, the GBPA was not perceived by government to be a regulatory authority for gaming,” it said. “In fact, the Hawksbill Creek Agreement was entered into by government to encourage the development of the Port area, and thereby the GBPA was rather to perform functions usually associated with local government. Of which the regulation is not one such function.”

The Attorney General’s Office added that “only the Gaming Board” was able to perform the anti-money laundering functions specified in the Gaming Act 2014, not the GBPA.

“It is our submission that the GBPA are not the Gaming authority in the Port area, and may only issue, in respect of the gaming industry, licences in the Port area,” the Attorney General’s Office said.

“We further submit that this licence may not necessarily be a business licence - merely a licence which attaches itself to the agreement made between the GBPA and the Government of the Bahamas.

“In fact, we would go as far as to say that the licence issued by the GBPA is merely a licence paid to them as managers - for the time being - of that area of land known as the Port area.”