The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Island Luck is awaiting regulatory approval for the acquisition of the rival Bahama Dreams web shop chain, Tribune Business can reveal, the first consolidation to occur in the newly-legalised industry.

Sources familiar with the deal confirmed yesterday that Island Luck, headed by Sebas Bastian, is purchasing a majority equity stake in its competitor, which it then plans to consolidate with its existing operations.

Island Luck officials were tight-lipped when contacted by Tribune Business yesterday, declining to comment on the deal amid “sensitivities” associated with the need to obtain the Gaming Board’s approval before the deal can close.

But one source close to developments told this newspaper “you’re very warm” when it asked whether Island Luck and its parent, Playtech Systems, were close to acquiring and consolidating Bahama Dreams.

Anton Roker, Bahama Dreams’ principal, did not return messages left by this newspaper seeking comment prior to press time yesterday.

However, Tribune Business was told that Bahama Dreams had been forced to seek a purchaser after its deal with Super Value’s owner and president, Rupert Roberts, to place web shop kiosks in the supermarket chain’s stores was blocked by the Minister of Tourism.

Obie Wilchcombe, who has ministerial responsibility for gaming, overrode the Gaming Board in forcing Bahama Dreams and Super Value to abandon their commercial tie-up, which was intended to lead to bigger things.

For Tribune Business was told that Mr Roberts planned to acquire a majority equity stake in Bahama Dreams, with one source confirming of the Super Value owner: “That’s true. He did make a bid for it [Bahama Dreams].”

Mr Wilchcombe’s intervention, though, also seems to have scuppered that deal, forcing Bahama Dreams to seek a new deal and ‘pushing’ the web shop operator into the arms of Island Luck and Mr Bastian.

Mr Roberts did not return Tribune Business’s message seeking comment before press time last night, with this newspaper told he was in a meeting when it contacted Super Value’s head office.

However, prior to Mr Wilchcombe’s actions, the Super Value owner earlier this year appeared enthusiastic about the economic benefits from the Bahama Dreams link.

“We’re going to sell it the way we sell Top-Up and everything else, “ he told Tribune Business then. “People don’t have to go sneaking around the corner now.

“Gas stations have it, convenience stores have it, it’s in most places. It’s legal and it’s very strictly controlled. Children are not going to be able to buy it. If there is a question, we’ll do what they do cashing cheques; ask for two forms for identification.”

“The ones that want it can buy it when they buy groceries. Today, web shop gaming is legal. After the industry became legal there was one, Island Luck, that moved next door to our Super Value store in the Prince Charles Shopping Centre, and Sunday night, the traffic there was similar to what the food store draws for Christmas.”

Having an active web shop kiosk in Super Value’s stores would likely have driven more consumer traffic - and more sales - to its stores, attracted by the convenience of purchasing groceries and ‘numbers’ at the same time.

The relationship would have made for a ‘win-win’ for both parties, and further legitimised the web shop gaming industry following its legalisation.

Island Luck’s move on Bahama Dreams is the first sign of consolidation among the players in the newly-legalised gaming industry, and is a development that will not surprise informed observers.

For legalisation has brought with it added costs through compliance and regulation, not to mention taxation, which requires web shops to pay the greater of 25 per cent of their operating income (EBITDA) or the 11 per cent gaming tax.

This will favour the larger players with deeper financial ‘war chests’, such as Island Luck and Craig Flowers’ FML Group of Companies, and it is possible further consolidations may follow Bahama Dreams.

The Government, via the Gaming Board, is also moving to enforce the zoning requirements related to web shops, which require that they not be near schools or places of worship. Some 200 locations are already said to have closed.

It is unclear what will happen to Bahama Dreams’ transitional web shop gaming licence should its sale to Island Luck close, although it will likely have to be relinquished and handed back to the Gaming Board.

While this may create an opening for Bet Vegas, the one applicant that was refused a web shop gaming licence, this appears unlikely.

The fact that the web shop industry has yet to move to its fully licensed phase, as opposed to being stuck in ‘transition’, is also thought to have complicated the Bahama Dreams purchase.

However, an end to the wait may soon be in sight. “If all things work out as they should, there’s no reason why the transition to full licensing should not be complete by the end of September,” one source said.