The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Attorneys on both sides of the Freeport gaming dispute yesterday urged other web shop operators to join their action, so that the issue of who is the sector’s regulator in that city and be “determined once and for all”.

Both Fred Smith QC and Carlson Shurland called on other web shops to join with Jarol Investments, the latter arguing that the Chances Games operator should “not be carrying the burden by itself” in seeking a verdict that will benefit the entire industry.

Jarol’s action, which both parties yesterday agreed should proceed as a private law action, rather than in its original Judicial Review form, wants the Supreme Court to determine whether it is the Grand Bahama Port Authority (GBPA) or the Gaming Board that has jurisdiction to licence, tax and regulate web shop gaming in Freeport.

Mr Smith, meanwhile, warned that his GBPA client may soon launch separate legal actions against other web shop companies, given that some were operating without a Business Licence from Freeport’s quasi-governmental authority.

This again illustrates the confusion and uncertainty over who is responsible for web shop gaming regulation in Freeport, although all procedural obstacles to hearing Jarol’s substantive case on December 2, 2016, have now been removed.

“I hope that the vehicle of this action can be used to deal with any and all other operators in Freeport,” Mr Smith, the Callenders & Co attorney and partner, told Tribune Business.

“Currently, they do not all pay license fees to the Grand Bahama Port Authority, but conduct their business using all the administrative, social, infrastructure and economic benefits that accrue to any business doing business in the Port area.”

Mr Smith said some web shops were still licensed as Internet cafes, which did not account for their gaming activities in terms of the license fees levied, while others were “not licensed at all”.

“It is the intention of the Port Authority to take out proceedings against all companies operating without a Port license,” he told Tribune Business. “None of them are paying license fees for the operation of their gaming activities. It all goes to the Gaming Board.

“It’s simply unfair that they should have the advantages of doing business with Freeport’s infrastructure, yet they’re not contributing by virtue of doing business to the upgrade and maintenance of the Port area through the payment of license fees.

“We hope that the other operators will consider joining the action so that all of them, the Attorney General and the Gaming Board, are before the court, and once a determination is made it is in respect of all.”

Mr Smith’s views were echoed by Mr Shurland, who told Tribune Business that the entire web shop gaming industry would benefit from a determination of the issues raised by his client, Jarol Investment.

“At the end of the day, this will give us some clarity, but ideally Chances should not be carrying this burden by itself,” he said.

“The other operators will benefit from what comes out of this. I would love for the other web shops to come on board as a team, and consolidate our resources in order to get focus on who we should be paying [license fees] to. There’s strength in numbers. We’d like to see them come together.”

Mr Smith, meanwhile, argued that there was no reason why web shop operators could not pay license fees to the GBPA, given that the operator of Grand Lucayan’s casino, Treasure Bay, paid such fees

Chances Games was one of at least two web shop chains who have launched separate legal challenges to the GBPA’s bid to issue gaming licences to them, and levy an associated 50-fold fee increase.

They were effectively arguing that the GBPA is trying to “usurp” the Gaming Board as the web shop industry’s regulator, and that the former has no power to issue provisional gaming licences - and charge associated fees - for their Freeport operations.

Chances Games is thus asking the Supreme Court to determine who is the appropriate regulator and licensor for its Freeport operations, and to whom it should pay related gaming taxes.

Its action was initially launched as a Judicial Review, but both Mr Smith and Mr Shurland confirmed that at yesterday’s Supreme Court hearing, they agreed it should proceed as a private law action by way of originating summons.

And the various government agencies, including the Gaming Board, minister of tourism (who has responsibility for gaming) and the Attorney General’s Office, will also be added as parties, enabling them to file evidence and make submissions to the Supreme Court.

The attorneys said yesterday’s hearing had removed obstacles to the hearing of Jarol’s substantive case on December 2. Apart from eliminating procedural matters, the switch to a private law case also removes the issue of whether the GBPA is a body that is “amenable” to Judicial Review.

The case may not be received well by either the Gaming Board or the Government, given their efforts to legalise and regulate the web shop gaming industry via the Gaming Act 2014.

It will especially irk the Christie administration, given that a key element of its recent Memorandum of Understanding (MoU) with the GBPA was designed to address the issue of regulatory conflicts in Freeport.

The MoU’s clause 1.18 commits the GBPA to ensuring its regulatory and quasi-governmental powers are ‘harmonised’ with national laws and government policies/regulations - something that Mr Smith’s suggestion appears to fly in the face of.

And the ‘harmonisation’ is supposed to occur via “existing independent regulators” such as the Utilities Regulation and Competition Authority (URCA) and the Gaming Board.

With the Grand Bahama Power Company already challenging URCA’s ability to regulate it, should Mr Smith’s suggestion be adopted, it would mean that the Supreme Court will be asked to rule on whether a second ‘national regulator’ has jurisdiction in Freeport.