The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An Island Luck affiliate has applied for Gaming Board approval to acquire a 65 per cent majority equity stake in the rival Bahama Dreams web shop chain.

An advertisement, confirming Tribune Business’s exclusive revelation of the pending deal, was quietly published in the newspapers last week.

It reveals that Playmark Entertainment, an entity jointly owned by Island Luck principal, Sebas Bastian, and Jeffrey Prescott Kerr, is seeking a ‘Certificate of Suitability’ from the Gaming Board to acquire a 65 per cent equity stake in Bahama Dreams Web Cafe.

Persons objecting to regulatory approval for the deal have until October 12 to submit their written reasons to the Gaming Board.

Tribune Business disclosed on September 15 that Island Luck was awaiting regulatory approval for the acquisition of Bahama Dreams, the first consolidation to occur in the newly-legalised web shop gaming industry.

Should the deal go through, it will give Mr Bastian and Island Luck increased market share, via the acquisition of Bahama Dreams’ customer portfolio, while also enabling it to take out a smaller competitor.

Anton Roker, Bahama Dreams’ principal, has not returned a series of messages left by this newspaper seeking comment on the pending purchase.

Tribune Business previously reported 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.

Tribune Business was told that Mr Roberts had himself planned to acquire a majority equity stake in Bahama Dreams, although he declined to comment when contacted by this newspaper, instead directing it to Mr Roker.

Mr Wilchcombe’s intervention seemingly scuppered the Super Value deal, forcing Bahama Dreams to seek a new partner, thereby and ‘pushing’ the web shop operator into the arms of Island Luck and Mr Bastian.

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.